By Brian Dunn
In her book, “Ninety Percent of Everything,” author Rose George notes that we live in postindustrial economies, where we no longer produce but buy. We buy, so we must ship. Without shipping there would be no clothes, food, paper, or fuel in what she refers to as the “invisible industry” to most people outside the shipping world.
“Nobody realizes the importance of our industry, but it’s becoming more and more part of the conversation in the media,” said Najim Shaikh, Vice-President Commercial Import, MSC Mediterranean Shipping Company (Canada) Inc. Certainly MSC realizes the importance of shipping and why it continues to grow its Canadian operations from one weekly service in 2004 to eight today, including five dedicated services.
Its latest offering, in response to the collapse of South Korea’s Hanjin Shipping, is the launch of MSC’s Maple service between Yantian, China, and Vancouver with calls at Shanghai, Bussan and Long Beach. It was originally part of its 2M alliance with Maersk Line, but Maersk had a change of heart and decided to postpone its participation in the new service which will add an additional 6,000-plus TEUs of capacity, said Mr. Shaikh. “We never really had a large presence on the West Coast (of Canada) and we could add more capacity throughout our network, depending what everybody else does,” (in response to the Hanjin void).
Most goods exported from Vancouver are region-specific such as lumber, pulp and agribusiness. Inbound goods are largely destined for retailers in Quebec and Ontario, as an alternative service to the East Coast. “If there are winter delays due to weather, customers can bounce between the East and West Coast, whatever makes the most sense.”
MSC’s Saint John, NB service began in 2012 as a bi-weekly service and now is weekly, primarily for the export market, but the company is trying to increase the import side, said Mr. Shaikh. “We’ve added Mexico to our rotation on both East and West Coasts, connecting Freeport, Montreal and Saint John with a Houston option and Vancouver is part of our California Express service. Service from Mexico used to go through the spine of North America via rail.”
Service out of Prince Rupert began about a year ago and primarily serves inland locations such as Calgary, Edmonton and Winnipeg via a rail link into the interior.
“A lot of terminals are investing hundreds of millions of dollars on upgrades, including Deltaport (Vancouver) which will be completed in 2017 with a rail and port expansion,” said Mr. Shaikh. “Prince Rupert has already reached capacity at its Fairview Container Terminal of 750,000 TEUs and a new expansion expected to be completed sometime in 2017 will add an additional 550,000 TEUs. And here in Montreal, the first phase of Termont’s Viau Terminal expansion was scheduled to be completed by the end of November, adding 300,000 TEUs.”
Asked about initiatives to have more cargo go through Montreal instead of U.S. ports for destinations such as Toronto, Mr. Shaikh said it’s an industry-wide responsibility. `The minute you load or unload cargo at a U.S. port, that’s helping the U.S. economy. We’re working with our Canadian carriers and CargoM to bring awareness of the advantages of shipping through Montreal. We’re the only one that has a north-south service between Montreal and South America.”
While the shipping industry as a whole is growing in terms of cargo flow, supply and demand is a point of contention and how it affects freight rates, Mr. Shaikh pointed out. “At the end of the day, how do you reduce costs when freight rates aren’t growing? Alliances help, but you can’t mobilize a large fleet in a week and you also have to be more cost-conscious. There is no simple answer how to continue to cut costs. It depends on each company’s structure and on which trade lanes they operate. We have good trade lanes. Far East to Europe and Far East to North America are very volatile. North-south routes traditionally have had better rates.”
The Canadian economy has been growing for the last 15 years which has been reflected in MSC’s growth across the country. It expects the Canadian containerized industry will grow between 3-5 per cent in 2017, or roughly an increase of 150,000 to 250,000 TEUs. “We wouldn’t invest in Canada if we didn’t see growth. We’ve created a separate reefer team under Steve Campbell and we’ve created an import group, because the nature of imports and exports is very different. We’ve created new opportunities like Latin America to Montreal and Montreal to the Gulf. We have a Europe to West Coast of Canada service as an all water alternative for our customers. That’s how we’re growing.
Are there markets that we’re not traditionally operating in? Absolutely. But if a customer says they’d like to see more Mediterranean options, we’ll look at it to see if it makes sense.