St. Lawrence Se­away opens af­ter worst cargo sea­son in years

The Niagara Falls Review - - NATIONAL -

ROSS MAROWITS

THE CANA­DIAN PRESS

MON­TREAL — Af­ter the worst cargo sea­son in years, ship­pers travers­ing the Great Lakes are ex­pect­ing a rise in vol­umes this sea­son as the St. Lawrence Se­away opened Mon­day, but not enough to give them cause to cel­e­brate.

The ship­ping in­dus­try is fac­ing a global eco­nomic slow­down that will take a cou­ple of years be­fore sus­tained growth re­sumes, says the in­com­ing CEO of Canada Steamship Lines in Mon­treal.

“I don’t see any­thing that’s go­ing to be a game changer very quickly,” says Louis Mar­tel, who takes over one of the largest ship­pers on the Great Lakes next month.

“We need an­other China or an In­dia or some­thing like this to re­ally get us back to a very, very up­beat ship­ping world.”

To­tal cargo pass­ing through the se­away fell to a seven-year low last year, with ton­nage slip­ping 3.4 per cent to 35 mil­lion tonnes, ac­cord­ing to the St. Lawrence Se­away Man­age­ment Corp. An in­crease in grains and liq­uid bulk vol­umes failed to off­set a 13 per cent drop in iron ore and nearly 10 per cent de­creases in coal and dry bulk goods.

Slow­ing growth in China has cur­tailed in­ter­na­tional cargo de­mand, The Sea Keeper which hasn’t been able to keep up with a surge in the num­ber of ves­sels that were the re­sult of a ship­build­ing boom be­tween 2002 and 2008.

Mar­tel says vol­umes through the Great Lakes are look­ing to be up slightly this year amid im­proved com­mod­ity prices and higher hopes for grain ship­ments, some of which have been left over from last year’s bumper crop. That could al­low ships to op­er­ate for the en­tire nav­i­ga­tional sea­son, un­like last year when some didn’t leave port.

Fu­elled by higher prices, iron ore vol­umes are ex­pected to be up as Cana­dian pro­duc­ers ex­port more to Asia and sup­ply an an­tic­i­pated boom in in­fras­truc­ture in North Amer­ica, in­clud­ing US$1 tril­lion in promised spend­ing by U.S. Pres­i­dent Don­ald Trump. Still, Mar­tel es­ti­mates Cana­dian Steamship Lines will ship a quar­ter of the iron ore it did com­pared with its peaks years of 2012 and 2013.

Se­away CEO Ter­ence Bowles ex­pects traf­fic will in­crease in line with the two to 2.5 per cent GDP growth fore­cast by economists, but that won’t be strong enough to re­turn to the yearly av­er­age of 40 mil­lion tonnes.

“The se­away is the bell­weather for the econ­omy so ba­si­cally if the economies im­prove we’re go­ing to im­prove, it’s as sim­ple as that,” he said fol­low­ing the se­away’s of­fi­cial open­ing.

Peter Wink­ley, chief fi­nan­cial of­fi­cer­forAl­go­maCen­tralCorp.,says he is op­ti­mistic busi­ness will pick up this year af­ter the St. Catharines, Ont.-based ship­per saw vol­umes fall 19 per cent in 2016.

“Com­pared to where we were at this time last year, it’s cer­tainly look­ing a lot bet­ter,” Wink­ley says.

While up­heaval in the ocean ship­ping­busi­nesshasled­tothe­bankrupt­cies of large play­ers such as South Korea’s Han­jin, Cana­dian ship­ping on the Great Lakes is on a more solid foot­ing, says Wil­liam Ben­nett, se­nior an­a­lyst with London-based con­sul­tancy Ves­sels Value.

He says ship­ping in the St. Lawrence Se­away is a spe­cial­ized, niche sec­tor, giv­ing it a de­gree of in­su­la­tion from the eco­nomic forces hit­ting the high seas busi­ness. Ship­pers of dry bulk on the Great Lakes, for in­stance, are likely to have a bet­ter sea­son than their ocean-go­ing coun­ter­parts.

“It’s not very dif­fi­cult for the market to come up from where it is now, given how low it is,” he says.

“Ev­ery­one is so des­per­ate to see some sort of light at the end of the tun­nel, (but) there’s a lot of very, very big un­cer­tain­ties un­der­pin­ning the market at the mo­ment.”

PAUL CHIASSON/THE CANA­DIAN PRESS

A woman takes a pho­to­graph of the the CSL St-Lau­rent dur­ing the of­fi­cial open­ing of the nav­i­ga­tion sea­son Mon­day in Mon­treal. A group of artists painted the mu­ral on the ship en­ti­tled de­pict­ing a Canada goose in flight.

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