TRANS-ATLANTIC TRADE - Canada’s Atlantic trade remains buoyant

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

Leo Ryan, AJOT The evidence so far suggests that the major carrier-rationalization developments have had little impact on container service capacity at Canada’s trans-Atlantic gateways of Montreal and Halifax. It’s not precisely the same trend as on the US eastern seaboard. Rather, several new Atlantic services have been recently introduced between Northern Europe and Canada.
Canadian shippers, however, have not welcomed the latest attempts to raise freight rates. “Our members have not shown great alarm over the carrier realignments, but they don’t like the increased rates,” says Robert Ballantyne, President of the Canadian Industrial Transportation Association, referring to the general rate increases implemented on April 1 of US$160 per teu and US$200 per feu and per temperature-controlled container by the members of the Canadian-North Atlantic shipping conferences.
Additional rate increases, as yet undetermined, are slated for next October. Carriers involved are Orient Overseas Container Line (OOCL), Hapag-Lloyd and CP Ships (recently acquired by Hapag-Lloyd).
There is also concern in some quarters that inland flow of goods on the East Coast, where infrastructure weaknesses are emerging, could be delayed as Asian shippers resort more and more to the Suez route as an alternative to capacity-stretched Pacific gateways for getting goods into North America’s industrial heartland.
Interestingly enough, for Canadian importers and exporters, the foreign exchange gyrations provoked by Canada’s rampaging “petrodollar” at various highs versus the US greenback, the British pound and the euro, have not resulted in any significant decline in North Atlantic trade. Rather, the opposite has occurred with the leading European trading partners, even on the export front.
According to Statistics Canada, Canadian exports to the United Kingdom rose from C$7.74 billion in 2004 to C$8.18 billion in 2005. Imports from the U.K. over this period increased to C$10.4 billion from C$9.66 billion. With Germany, Canadian exports totaled $3.2 billion in 2005 compared with $2.67 billion in 2004. Imports from Germany, for their part, climbed quite substantially from $9.42 billion in 2004 to $10.25 billion in 2005.
These numbers hardly match Canada’s exploding imports from China ($29.5 billion in 2005 as against $24 billion in 2004), but they do confirm a stable, Atlantic trading relationship that has reached maturity.
Commenting on the implications of the Hapag-Lloyd takeover of CP Ships and of Maersk’s further dominance of global container shipping by absorbing P&O Nedlloyd, George Kuhn, Executive Director of the Canadian International Freight Forwarders Association (CIFFA), offers a mainly positive assessment.
“It’s almost a non-event,” he suggests. “Everything has gone pretty smoothly through consolidation. There are increased efficiencies in many ways. We have not yet observed shipping capacity problems, and service levels still look good.
“We do, nevertheless, have certain concerns over East Coast ports today taking on more cargo from Asia, and we remain very vigilant about CN living up to its commitments to maintain adequate railcar supplies to Halifax.”
Fritz King, manager director of Canadian operations for Atlantic Container Line, feels that a current liner shipping emphasis on revenues will evolve towards volume requirements in the near future. “New objectives will surface in 2007 as all the restructuring takes full hold.”
Steve Godsmark, traffic specialist for Volkswagen Canada, based in Ajax, Ontario, notes that while the great bulk of Volkswagen vehicles and parts arrive in North America via the Port of NY/New Jersey (about 10 containers a day), there are also shipments to Halifax/Dartmouth that are subsequently railed to central Canada.
“The total number of sailings on the Atlantic lane have decreased, as carriers have pulled off ships from this lane to the Far East,” notes Godsmark, adding, “We are not happy with the increase in freight rates, or the reduction in capacit

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American Journal of Transportation