By Brian Dunn
On April 25, 1925, Paul von Hindenburg was elected President of Germany. It also happened to be the same day Montreal Shipping Co. Ltd. (now Montship) began operations, as a result of which it is celebrating its 90th anniversary this year.
The company began as agents for vessels trading between Canada and the U.K. The primary cargo was coal from Britain and grain to Britain on the return voyage. Today, Montship is the largest liner agency in Canada, representing a large number of shipowners and liner services. The company is a wholly owned subsidiary of Trealmont Transport. Montship’s other sister companies include Trealmont Trade Lane, Trealship Services, and Prairie International Container and Dray Services. Trealmont Logistics was established in 1994 and merged in 2009 with Trade Lane Solutions of Vancouver. The division represents various shipper interests and offers logistics solutions and chartering services. Trealmont Logistics (U.S.A) was established in New Orleans in 2000 and supports the Canadian operation.
Trealship Services was established in 1998 in Halifax as a reefer container repair company and has since expanded to Montreal, Toronto and Winnipeg. Prairie International, a trucking entity specializing in container transport, is also based in Winnipeg.
During the 1940s, chartering became the main focus of business and after the war, the company purchased six surplus vessels from the Canadian government and chartered nine others. “But in the early ‘50s it became too expensive to operate Canadian flagged ships. We were losing out to European operators, so we gradually exited this end of our business. We were still involved with some vessel management and some brokering and we were also port agents,” explained Montship CEO Brian McDonald. “It was the most difficult period in our history.”
The company’s fortunes improved under new management, and when it took over representation of Mitsui Steamship Co. of Japan, a relationship that lasted 53 years, until Mitsui opened its own Canadian offices in 2013. Montship also acquired the agency for Hapag-Lloyd in the early ‘60s, which ended when Hapag-Lloyd entered the Trans-Pacific in 1992.
The opening of the Seaway also had a major impact on Monship’s tramp activities, with port calls more than doubling. The tramp owners included well-known names like Maple Shipping, (a joint venture of Canadian Pacific Steamship and Tatham, Bromage of London), Union Industrielle et Maritime of Paris and Van Ommeren of Rotterdam. The vessels primarily carried steel from Europe and returned with bulk grain.
Liner agency became the company’s mainstay in the 60’s, and has remained so ever since. Today, Montship’s line-up includes Hamburg Süd, China Navigation Co. (Swire Shipping), Bermuda Container Line, Great White Fleet, Hoegh Autoliners, United Arab Shipping Co. and World Logistics Service.
“The liner agency landscape has changed dramatically in the past 50 years. It was a crowded field back in the 1960s after the Seaway opened. There may have been 10 or 15 liner agencies then. Today, there are less than a handful because of consolidation and lines opening their own offices.”
While the liner agencies segment continues to be its core operation, Montship is looking to grow its logistics business in Vancouver and across the country. “We see it as a key growth area. Logistics has long been an important part of our portfolio, especially in the forest products sector. But there are other commodities to tap, and we want to expand our reach to eastern Canada as well. It’s a wide market, with lots of potential.”
Mr. McDonald sees more industry consolidation, which he partly attributes to the Lehman Brothers collapse in 2008, which put a tremendous focus on costs. “More than anything, it accelerated carriers’ focus on cost reduction. And the best way to reduce costs is through alliances, mergers or acquisitions. The whole key is getting slot costs down.”
The business does have allies in the form of a lower Loonie which enhances Canadian margins over U.S. margins for its logistics partners, and lower bunker fuel costs. “On the other hand, shipping rates are down, so you have a benefit on one hand which is taken away by the other. In terms of shipping, you need volume in both directions. Overall utilization has to be at a high level to get rates to sustainable levels, which is harder to do with larger ships, and more capacity.” The industry continues to face overcapacity as bigger ships get built, “because you’re always chasing scale.”
In terms of his own company, which he hopes will be around for another 90 years, Mr. McDonald believes the successful formula is to continue to evolve, “because complacency is a company killer. Over the years, the leadership has been quite anticipatory, always trying to stay ahead of the curve. The carrier – and agency – landscape is always changing, and you can’t sail in yesterday’s wind.
“Cost is only part of the equation. You have to differentiate. And low cost and differentiation are not mutually exclusive. The key for us is to offer a platform that is extremely cost competitive, while at the same time delivering higher margins through cargo optimization. It is very difficult to deliver superior service from an out-of-country competency centre. So you can give up margins by chasing cost savings. We will continue to offer economies of scale, risk reduction and differentiation.”
Mr. McDonald also gives a nod to Montship’s staff, which has impressed him with their professionalism and dedication since he joined the company in 1989. “Of the 100 people who work at Montship, I think at least 23 of them have been with the company for a quarter century. I am very proud to be associated with the team we have here and with the legacy my predecessors built.”