‘Transit Cargo’ Moving to U.S. Important to Canadian Economy

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Photo by: Jon Benjamin Photography

There is a need for Canada to be a transit country, supporting goods flowing to and from the United States, Canadian International Freight Forwarders Association (CIFFA) Executive Director Ruth Snowden said.

Speaking at the Cargo Logistics Canada exposition and conference in Vancouver, British Columbia on Wednesday, Snowden told her audience that Canada needs to position itself as a country of choice for cargo, whether it is moving through West Coast ports, such as Prince Rupert and Vancouver, or East Coast ports, such as Halifax and Montreal.

Earlier this week, Statistics Canada released the latest census numbers, showing Canada has a population of 35 million.

“Because we have such a small market here, we really have to build. We need the carriers to call here. We need to have all of those jobs the transit cargo is creating,” Snowden said. “We need to have the carrier options. We need to have the port options,” she added. “Thirty-five million people and 3 percent of the world’s GDP is not going to give us those options. That is why we are very concerned about having cargo, so the freight forwarders have more options to provide their shippers.”

In addition, Snowden emphasized the need for improved border processes and transparency.

She also raised the question of how easily cargo will move to the U.S. under the Trump administration.

In the past, cargo moving between overseas destinations through Canadian ports has been a hot button political issue.

In 2011, U.S. Senators Patty Murray and Maria Cantwell of Washington state asked the U.S. Federal Maritime Commission (FMC) to investigate the extent to which the federal Harbor Maintenance Tax (HMT) and “other factors” are causing U.S.-bound cargo to be routed through ports in Canada and Mexico.

A report released by the FMC the following year found that:

  • Carriers shipping cargo through Canadian and Mexican ports do not violate any U.S. law, treaty, agreement or FMC regulation;
  • Numerous factors account for why shippers elect to use ports in Canada and Mexico, including overall shipment savings, risk mitigation through port diversification, perceived transit time benefits, avoidance of the HMT, and rail rate disparities;
  • And there are many options available to Congress, should it decide to revise or replace the current HMT structure.

The study confirmed previous estimates that a significant amount of containerized cargo imports moving through the ports of Oakland, Seattle, Tacoma and Portland on the U.S. West Coast may be vulnerable to Canadian routing.

Speakers from the Canadian ports of Prince Rupert, Montreal and Halifax said Wednesday that sizeable portions of cargo moving across their docks is bound for or originates in the U.S.

Shaun Stevenson, Port of Prince Rupert vice president of trade development and public affairs, said about 65-70 percent of the port’s cargo is destined for the U.S. Stevenson noted that an added benefit of empty containers returning to Prince Rupert from the U.S. is they can be reloaded with Canadian exports.

Tony Boemi, Port of Montreal vice president of growth and development, said about 22 percent of the port’s cargo moves to or from the U.S. That’s actually down from 35-40 percent because of an increase in Asian cargo bound for Montreal, some of which is transshipped through Mediterranean ports.

Rob McInnes, Port of Halifax manager of business development, said a similar percentage moves through Halifax. “We would not have 480,000-TEU throughput if we were only in business to serve Atlantic Canada,” McInnes said. “The vast majority of our customers are in central Canada as well as the U.S. Midwest.”

Read full article: American Shipper, February 9, 2017

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