St. Lawrence Seaway shipments of grain, iron ore and coal slumped deeper this year, but cement and other construction materials are seeing a rebound after a mild winter that gave an early start to North American construction projects.
The amount of industrial goods also surged in the first two months of the shipping season, as aluminum from Sept-Îles destined for automotive plants in New York, Ohio and Detroit lifted general cargo volumes by 64 per cent, the Chamber of Marine Commerce said on Thursday.
“Businesses are responding to demand from the U.S. automotive and construction industries,” said Terence Bowles, head of the St. Lawrence Seaway Management Corp.
However, the shipping companies, mines and mills that trade on the 3,700-kilometre waterway cannot dodge the global slump in demand and prices for the dry bulk commodities that are the main cargo: iron ore, coal and grain.
Overall cargo volumes fell by 4 per cent, year-over-year, since the route opened on March 21, driven by a decline in steel and iron ore. Tonnage fell by 9 per cent in 2015, led by a 40-per-cent plunge in coal shipments.
A surplus of ships and slowing demand for industrial commodities in an economic slowdown have sent vessel rates plunging on the Seaway and global waters in the past year. Shipowners have responded by scrapping or selling vessels earlier than planned, and by merging or forming alliances with rivals to stay afloat.
French shipping giant CMA CGM recently joined the Ocean Alliance with China’s Cosco Group, Hong Kong’s Evergreen Line and Taiwan’s Orient Overseas Container Line. CMA is also pushing ahead with an attempted $2.4-billion (U.S.) takeover of Singapore’s Neptune Orient Lines. The chief executive officer of Neptune Orient said in a published report this week the carrier’s high costs and smaller size make it impossible to survive alone.
Last year, five of the world’s largest bulk shipping companies formed a group that pools their fleets of large carriers.
On the Great Lakes, Algoma Central and Canada Steamship Lines are scrapping older ships and buying vessels that are more fuel efficient and have self-unloading cargo holds amid a slump in the short-sea shipping business in North America.
Still, there are some positive signs.
Two major shipments of wind turbines, made by Enercon and Siemens at their respective plants in Southern Ontario, left Lake Ontario ports for Nova Scotia and overseas markets. And St. Marys Cement in Bowmanville, Ont., has been supplying its plants in Ohio and Detroit, which have seen a rise in demand from builders of housing and commercial buildings.
Better demand for cement, drywall material, gypsum and road salt lifted shipments of dry bulk cargo by 5 per cent.
Dry bulk cargo shipments, in the same period, totalled 1.9 million tonnes, up 5 per cent, with strong performances from cement, road salt and gypsum.
“The milder winter has led to a jump-start to the construction season. Last year, construction activity in the U.S. Great Lakes grew as the economy improved and, so far, we’re seeing that continue,” said Jim Reznik, logistics director for St. Marys owner Votorantim Cimentos. “With the Seaway opening earlier, we have been able to get extra vessel loads out to serve our customers.”
Source: The Globe and MailPrevious Next