Leo Ryan, AJOT
Although the project cargo sector in Canada was affected by industry-financing and other issues during the recessionary period in 2008 and 2009, there is growing evidence that a recovery phase is underway.
With mining, infrastructure and energy-related projects springing up across the country in recent years, Canada emerged as a promising market for heavy lift carriers and project forwarding enterprises.
The Alberta oil sands have been a major magnet. Wind farm components especially have been a familiar sight at the docks of ports on the east and west coasts thanks to calls by vessels of such niche carriers as Big Lift, Jumbo Shipping, Beluga Shipping and BBC Chartering.
Up until late 2008, Canada was the scene of unprecedented activity in the project cargo arena. Massive reactors were imported from Asia for use in the Alberta oil sands. Giant windmill components were imported from Europe. And mining equipment came in from all over the globe.
A resurgence in oil sands project movements is generally expected in the latter half of this year as world oil prices have been holding steady in the $72 to $75 a barrel range from lows of under $40 a barrel in early 2009.
Observers feel that the comportment of Chinese companies will bear close watching. Indeed, they have been spending billions of dollars in Canadian oil and gas properties, including investments in oil sands producers.
“It will also be interesting to see if the huge BP oil spill in the Gulf of Mexico changes the dynamics of where oil exploration takes place,” commented one analyst.
The Canadian ports most active in project cargo include Port Metro Vancouver, Thunder Bay, Hamilton, Windsor, Toronto, Montreal, Bécancour, Halifax, St. John’s and Saint John.
For the Port of Thunder Bay, project cargo became a significant new business several years ago after CN launched a direct, competitive routing to Fort McMurray in the heart of the Alberta oil sands.
“Project cargo destined for Western Canada so far this year has been wind turbine components, and we are awaiting the resurgence of oil sands project movements,” said Tim Heney, President of the Thunder Bay Port Authority.
At the Port of Toronto, some of the heavier cargoes passing through include wind turbines, power plant components (imported) and Canadian-made locomotives for export.
During 2009, the Port of Windsor received four shipments of windmills. They were off-loaded at Morterm Ltd. and were destined for wind energy farms in the Essex and Kent Counties.
“With several new projects planned in the region, the Windsor Port Authority is forecasting that this cargo will continue to be an important one for the port in the next 5 to 10 years,” said David Cree, President and CEO.
Growth of project cargo volume has become one of the key priorities of the St. Lawrence Seaway, which is underlining its direct access to the industrial heartland of North America.
“We are very optimistic as we have seen, for instance, some good activity going on in such ports as Detroit and Burns Harbour,” said Bruce Hodgson, Director, Market Development for the St. Lawrence Seaway Management Corporation.
In an interview, Ross Fletcher, broker in Montreal for BBC Chartering, was bullish in particular about the present outlook for wind energy components in Quebec.
“Components are picking up again, with the Quebec government pushing ‘green energy’ in Gaspé and other regions,” he said. “Over the past few years, we have been carrying wind turbines into the ports of Gaspé and Matane, and loading tower sections at Bécancour.”
At the same time, Mr. Fletcher singled out a growing trend in Quebec of encouraging more local production of components, for example, at Trois-Rivières and Cap de la Madeleine. “This could change trade patterns somewhat.”
Meanwhile, rising investments into new and existing mining properties in Canada are creating demand for project cargo movements from offshore manufacturing plants for mining, crushing, conveying and proc
Project cargo outlook perking up in Canada
Leo Ryan, AJOT