Trans-Atlantic - Changing features of Canada’s Atlantic trade

By: | at 08:00 PM | Channel(s): International Trade  Ports & Terminals  Liner Shipping  

By Leo Ryan, AJOTDespite the departure of some carriers and further rationalization, Canada’s trans-Atlantic trade remains relatively buoyant, with services between the Port of Montreal and northern Europe in particular continuing to spark growth in container cargo.
New challenges, on the other hand, are facing the Port of Halifax, which is seeking to rebound from the loss of a long-standing key customer, Maersk Sealand, by courting business from Asian shippers looking for alternatives to congested West Coast gateways in North America.
“There are a lot of changes going on in the North Atlantic trade,” summed up a senior executive with a ship agency in Montreal.
Fritz King, Managing Director of the Canadian offices of Atlantic Container Line (ACL), whose vessels call at Halifax, remarked, “A number of lines have found the returns wanting on the North Atlantic. The adjustment to capacity is not unexpected.”
“As far as ACL is concerned,” King recalled, “we recently completed a program to extend the life of our G-3 vessels.”
Impacting traffic trends is the slower economic growth in the European Union versus the United States and Canada, while the persistent strength of the Canadian dollar favors westbound movements.
In this connection, Adolf Adrion, CEO of Hapag-Lloyd, recently suggested that the westbound trans-Atlantic trade will see shortages of tonnage, “from May to nearly the end of the year.”
Ocean rates remain comparatively low, but higher average freight rates last year helped to boost revenues for the leading player, CP Ships, although actual profit on its core Montreal-Europe services fell to $25 million from the 2003 figure of $65 million. Over the past few months, the shipping line has reduced its overall capacity on the Atlantic market by introducing, on one of its service loops with Europe, three 1,600-teu containerships which have replaced 2,400-teu vessels re-deployed to the more lucrative Pacific trades.
Montreal holds 39.5% share of North Atlantic container market
Last year proved to be another banner year for the Port of Montreal, the market leader in purely North Atlantic trade, ahead of US rivals on the eastern seaboard, as containerized cargo advanced by almost 10% to 1.2 million teus from 1.1 million teus.
When the year began, port officials had anticipated a more moderate increase, in the four percent range. Several factors contributed to still higher growth, however, including the arrival of new container services and increasing “land bridge” shipments of Asian imports railed to the West Coast via Montreal, averting congested Vancouver terminals.
According the Dominic Taddeo, President and CEO of the Montreal Port Authority, Montreal currently holds a 39.5% share of the North Atlantic container market against 38.7% in 2003 - more than the Port of New York/New Jersey. More than half of Montreal’s container business originates from the US Midwest and Northeast.
The new services in 2004 included the Europe Canada Express by CMA CGM, Lloyd Triestino and Zim Israel Navigation, APL slot chartering on P&O Nedlloyd, Senator Lines and Maersk Sealand’s CANEX service. Senator Lines also added a Europe service.
The early months of 2005 witnessed several changes, with the decision to terminate the vessel-sharing arrangement between CMA CGM, Lloyd Triestino and Zim in mid-May. This was a tough blow for Logistec Corporation, joint operator of Termont Terminal, where the vessels of the three carriers have been calling.
Reports that CMA CGM would not abandon the Montreal gateway altogether were confirmed on April 11, when CP Ships and OOCL announced they would charter a fixed number of slots to CMA CGM on their St. Lawrence Coordinated Service connecting Montreal, Le Havre and Antwerp. The slots will be taken on the largest containerships sailing on the St. Lawrence River, each with nominal capacities exceeding 4,000 teus: the OOCL Montreal, the Canmar Spirit and the Canmar Venture.
“This will help supply and demand on the Montreal

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American Journal of Transportation