JUNE 2016, OVERVIEW OF THE CANADIAN MARITIME ENVIRONMENT

By 2015, a lower demand for natural resources has had a considerable impact on the volume of cargo handled at Canadian port authorities.  There is a slowdown in activities in almost all port sites. However, this decrease has been more pronounced for 2016.

To understand the differences and determine cause of the declines, we will present an analysis of the activities of three Canadian port authorities; those of Vancouver, Montreal and Quebec City. In this regard, a composite indices measuring the Canadian port activity have been developed. These indices are based on trends in the international trade of  over 50 products shipped to  Canada (see annex to this article) and reflect the handling of volumes of industry trends. They can be used for comparisons, forecasts and calculations of optimization under constraints. Graphics that accompany the text illustrate both indices obtained from the actual data in the annual reports of the port authorities, and forecasts of the indices that have been developed.

ANALYSIS OF PORT SITUATIONS

The port of Vancouver

Vancouver-indexThe port of metro Vancouver is the largest port in Canada and one a major exporter of coal, minerals and wood products. In 2011, handled products, (including containerized products) grew from 122 million metric tons (mt) to 138 mt. It is the third most important port in North America, after South Louisiana (242 mt) and Houston (216 mt). The port of Vancouver metro ranks higher than the port of New York (120 mt). 80% of handled volumes are exported compared to 20% for imports.

Other major shipments from the port of Vancouver are (10.8 mt) wheat, cereals including canola (6 mt), large quantities of sulphur (2.6 mt), potash (8.7 mt), coal (35 mt), crude oil (1.96 mt) and forest (23 mt) products.

The decline that is indicated by the index, between 2014 and 2015, can be explained by a decrease in exports of coal, petroleum (down 8% and 15%), and ore (down 9%) of which all products exported to Asia. There has been slight decrease of imported chemical products.

The port of Montreal
There has been a steady inMontreal-indexcrease since 2011. It is characterized by the balance between the loading and unloading. The distribution of the volume of international shipments is 46% from international unloads, or 54 per cent.  This balance may have an impact on the profitability of shipping lines.

The port’s activity is characterized by a significant increase in containerized content and merchandise. Montréal does not seem to follow the global trend of the industry, an indication of a possible displacement of the market to Montreal shares.  There is a strong increase of the handled volumes of petroleum products — from 8.5 mt to 9.4 mt, while Canadian and Quebec data indicate a decline in exports and imports between 2014 and 2015. In this regard, oil exports increased from 97 G$ 64 billion $ between 2014 and 2015. Imports increased from 23.8 to 16.7 G$ 2014-2015.

The port of Québec

The port of Québec has under gone,  from 2012,  a consecutive decline in  the volume of goods handled. This port is primarily specialized in transhipment of liquid and solid bulk. However, it is a major hub of international maritime trade in North America.

quebec-index

By 2015, the port of Québec handled 21 million tonnes dry bulk and liquid, including 17% of wheat, 17% of crude oil and 21% of the category ‘Other chemicals’ (see annual report).

The port of Québec is the last deep water port of the St. Lawrence before the access to the St. Lawrence Seaway. From 2015, its share of  trafficking transhipment has slowed down due to the fall of the (natural resources) commodity prices worldwide.

There has been a slowdown in certain traffic of goods, mainly those related to the steel industry and energy production. In the case of the steel industry, the slowdown in the Chinese economy  had an impact on the  demand for iron ore and its derivatives. The fall of coal prices and refined petroleum products has affected exports.

ANNEX TECHNIQUE: FOR A COMPOSITE MARITIME ACTIVITY INDEX

It will be possible from the indices to make forecasts on the Canadian maritime industry trends and analysis of optimization under constraints.  The following text gives the mathematical formula used to construct the indices. The example of Vancouver is essentially the same as that of the other Canadian port sites. In the coming weeks, the major Canadian ports will have their own indices, including those from Halifax and Sept-îles. These indices reflect the trends of growth of international commerce of more than 50 products or groups of products classified according to the HS codes.

 

Synthetic index for the port of Vancouver Metro

Capture2

Α = proportion of the volume of loading
(1-α) = proportion of the volume of landings
i = product according to the according to the HS classification
n = number of products
VCI = proportion by volume of a product loaded on the total volume of loading
EXI = export growth for a given year of a product (HS) compared with 2011
VDI = proportion by volume of a product unloaded on the total volume of unloading
II = growth of imports for a particular years of a product (HS) compared with 2011

Louis Bellemare
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