DULUTH – Several Great Lakes ships are being sidelined for the rest of the season due to pandemic-related declines in business, putting 94 Duluth-based Key Lakes workers out of a job as of Friday.
"The bottom line is the pandemic," said Mitch Koslow, vice president of Pennsylvania-based parent company Keystone Shipping Co. "Three of our vessels are being laid up due to economic conditions."
The Edgar B. Speer, Roger Blough and Philip R. Clarke will be taken out of commission for the rest of the year, though Koslow said the company is planning to put them back into full service next spring. If conditions improve, some shipboard employees could return this year.
That will largely depend on steel demand from automakers, which has fallen in recent months and along with it the demand for the Minnesota taconite pellets used to create it. That has also caused a drop in shipping volumes.
"Our biggest customer is U.S. Steel, so it's based on their plans," Koslow said. "We'll keep our fingers crossed."
More than 1,700 workers have been laid off from Iron Range mines this summer, though some are starting to return to work at U.S. Steel's Minntac mine in Mountain Iron earlier than expected this month.
As of May, shipments through the Port of Duluth-Superior are down nearly one-third compared with 2019.
In a letter to the city last week, Key Lakes' senior accounting officer Timothy Callahan said the company was "unable to provide a greater amount of advance notice of these layoffs" because of economic uncertainty created by the pandemic."
Job losses have been heavy in Duluth in recent months and have cut across industries, from restaurants, bars and hotels to the closure of the Verso paper mill, aircraft repair facility AAR Corp. and mass layoffs at Essentia Health. As of May, unemployment in Duluth sat at 11.6%, the city's highest rate since at least 1990, according to state figures.