12

FREIGHT TRANSPORTATION

Marine Transportation

Marine freight traffic in Canada has three categories: domestic flows,Note 3 transborder trade with the United States, and "other" international (deep-sea or overseas) traffic.Note 4 Marine freight traffic totalled 334 million tonnesNote 5 in 1999, a 1.9 per cent increase from 1998. Domestic flows, or coasting trade, accounted for 52.9 million tonnes, 9.5 per cent more than the 48.3 million tonnes moved in 1998. Canadian-flag vessels carried 51.5 million tonnes, or 97 per cent, of this total, which left foreign ships handling just three per cent of Canada's domestic marine shipping activities in 1999.

Canada-US traffic totalled 101.9 million tonnes, a 1.8 per cent increase over 1998 volumes. Canadian-flag vessels were active in the transborder trade, carrying 56.2 million tonnes, or 55.2 per cent of the total traffic. Overseas traffic decreased by 0.1 per cent in 1999 to 179.2 million tonnes, with Canadian-flag vessels carrying only 0.1 per cent of this traffic.

Total marine flows between 1989 and 1999 fluctuated year to year but showed a slightly increasing trend overall. Domestic traffic flows declined from a high of 70 million tonnes in 1988 to 52.9 million tonnes in 1999, a 24 per cent decline. This decline was primarily due to a shift in grain traffic from Thunder Bay to West Coast ports. In 1999, transborder traffic between Canada and the United States exceeded the previous high recorded in 1998 by almost two per cent. Since 1988, transborder tonnage increased by 22 per cent. Overseas (other international) traffic grew eight per cent between 1988 and 1999. Overseas volumes were 0.1 per cent lower in 1999 than in 1998.

Table 12-10 shows trends in Canada's marine traffic, by sector, from 1986 to 1999, while Table 12-11 shows the Canadian flag share of Canadian waterborne trade in 1999.

Domestic Freight Traffic

Domestic cargo is loaded and unloaded at Canadian ports and therefore handled twice by the port system. Domestic cargo rose 9.5 per cent in 1999 to 105.8 million tonnes. A significant decline in woodpulp and canola shipments was offset by increased shipments of crude petroleum, pulpwood, logs, bolts, and stone and limestone. Domestic marine cargo has been steadily decreasing since its peak in 1988, when ports handled 139.9 million tonnes. This was due in part to a change in the direction of Canada's international trade. Throughout the 1980s, many commodities were carried as domestic cargo via the Great Lakes-St. Lawrence Seaway system and then transferred at Canada's eastern ports for shipment overseas. More and more, these commodities are now being carried by rail to Canada's western ports for shipment overseas.

Table 12-12 shows flows of domestic marine traffic by region in 1999.

Most domestic traffic is centred in the Great Lakes-St. Lawrence Seaway system. These ports handled 57.5 million tonnes (loadings and unloadings) in 1999, or 54.3 per cent of the total domestic tonnage. The Pacific region was the second busiest, handling 29.5 million tonnes, or 27.9 per cent of the total. The bulk of domestic cargo handled by Pacific ports (99.7 per cent) stayed within that region. Pacific coast ports handled 4.8 million tonnes more cargo in 1999 than in 1998. Atlantic region ports handled 18.8 million tonnes of domestic cargo in 1999, or 41 per cent more than in 1998. Crude petroleum shipments to the shore-based storage reservoir at Whiffenhead, Newfoundland, drove this increase as the oil field on the Grand Banks (Hibernia) increased its production.

The most significant contributors to the increase in domestic traffic within Canada were petroleum products, with 22.0 per cent of the volume, and stone and limestone, with 22.4 per cent.

In 1999, the primary commodities handled in the domestic trade across Canada were:

• iron ore and concentrates (14.2 million tonnes, up 1.5 per cent from 1998)
• pulpwood and chips (14.1 million tonnes,
  up 13.9 per cent)
• fuel oil (9.9 million tonnes, up 1.7 per cent)
• stone and limestone (11.3 million tonnes, up 22.4 per cent)
• wheat (9.0 million tonnes, up 0.4 per cent)
• crude petroleum (5.8 million tonnes, up 169 per cent).

Together, these commodities accounted for 60.1 per cent of all domestic tonnage handled at Canadian ports in 1999.

In 1999, nearly 2.6 per cent of Canada's domestic marine traffic was handled by foreign-flag ships, up from 2.1 per cent in 1998.

Historically, foreign-flag vessels have accounted for less than two per cent of the total domestic traffic. During 2000, the Canada Customs and Revenue Agency received a total of 110 applications for a coasting trade licence, down slightly from the 117 received in 1999. Of these, four were denied, while another seven were withdrawn by the applicant. US-flagged ships made up the greatest proportion of the applications with 35.

In 2000, offshore oil and gas production and exploration remained an area of high activity, particularly on the East Coast. As in the previous year, there were a significant number of coasting trade applications related to this activity, including 26 for the use of foreign-registered tankers and 11 for seismic research. Applications for tug and barge combinations were next at 20, followed by passenger vessels, including cruises, at 14.

Table 12-13 indicates the actual tonnage and percentage of total cargo tonnage carried by foreign-registered ships involved in Canadian domestic shipping from 1988 to 1999.

Figure 12-5 indicates the percentage of total cargo carried by foreign-registered ships involved in Canadian domestic shipping from 1988 to 1999.

International Freight Traffic

In 1999, the volume of international cargo handled was 281.1 million tonnes, up 0.6 per cent from the quantity handled during 1998. Of all the international tonnage handled at Canadian ports, 63.9 per cent is export-oriented (including in-transit and re-export traffic). Canada's main deep-sea trading partners, excluding the United States, include Japan, China, South Korea, the United Kingdom and other western European nations. Combined, they accounted for over 61 per cent of total Canadian international marine traffic (exports and imports) in 1999.

The value of Canadian international marine trade in 1999 was around $83 billion (excluding shipments via US ports), or 4.5 per cent higher than in 1998. Marine imports were valued at $42.8 billion and exports at $40.2 billion. While the value of exports decreased by one per cent, imports increased by 10.3 per cent, due to increased cargoes inbound from western Europe and Asia.

Table 12-14 shows the value of the marine share of Canada's international trade in 1999.

Conference/Non-conference Market Shares

If it offers scheduled liner services, a shipping line can operate either as a member line of a shipping conference or as an independent (non-conference) line. Non-conference traffic has grown consistently in recent years, both in absolute terms and as a percentage of total liner traffic. As shown in Table 12-15, conference traffic was relatively static from 1994 to 1997, but was down somewhat in 1998. The Asia North America Eastbound Rate Agreement (ANERA) dissolved late in 1996. Several other conferences have been dissolved during 1999, including the Canada Westbound Rate Agreement (see Chapter 11 for further detail). The decline in conference power on many routes has resulted in independent lines increasing their market share substantially, particularly from 1998 on. If non-conference US origin/destination transshipped traffic is taken into account, the non-conference share would be even more dominant.Note 6

As shown in Table 12-16, liner traffic by foreign region of origin/destination helps illustrate the relative shares of conference and non-conference operators on different routes. The drop in conference traffic in 1999 is due largely to the weakening of conference carryings in the Asian trades.

Marine Traffic by Commodity

As in past years, in terms of the type of cargo carried, conference operators tend to concentrate almost solely on containerized traffic, with eight million tonnes of the total of 8.1 million tonnes they carried moving in containers. Non-conference traffic is also characterized by an increasingly large percentage of cargo in containers (78 per cent), but includes significant amounts of general cargo and neo-bulk traffic as well.

Canada-US Transborder Freight Traffic

Spurred by both exports and imports, Canada's marine traffic with the United States increased by 22 per cent between 1988 and 1999. Transborder traffic reached a peak of 101.9 million tonnes in 1999, up 1.8 per cent from the year before. Exports (loadings to US destinations)Note 7 led the slight growth of 1.4 per cent in marine traffic between the two nations. Imports (unloadings) increased by 2.4 per cent to 42.2 million tonnes in 1999, compared with 41.2 million tonnes over the same period in 1998.

Table 12-17 shows Canada's maritime trade with the United States from 1986 to 1999.

Fuelled by exports of $6.9 billion, marine traffic with the United States was valued at $9.8 billion in 1999. This value, however, represented only two per cent of total Canada-US trade, as the majority of the traffic was handled by surface transport modes, such as trucking and rail.

See Chapter 8 "Transportation and Trade" for more detailed information on Canada's trade with the United States.

Exports

Loadings at Canadian ports destined for the United States totalled 59.7 million tonnes in 1999, up 1.4 per cent from 1998. Seven commodities accounted for 74 per cent of marine export volumes. These were (in million tonnes) crude petroleum (9.2), iron ore (8.4), gypsum (6.9), stone and limestone (6.5), fuel oil (5.4), gasoline (4.3) and salt (3.7).

In 1999, volumes of major commodities exported to the United States changed substantially from those exported in 1998. Gypsum exports jumped by 11 per cent and crude petroleum and stone and limestone increased by 6.8 and 8.6 per cent, respectively. In contrast, iron ore and salt exports decreased by 14.3 and 11.4 per cent, respectively.

There were two main trade flow corridors in 1999: the Canadian Atlantic to the US Atlantic route, with 27.5 million tonnes, or 46 per cent of total loadings to the US and from the Canadian Great Lakes to US Great Lakes ports, with 12.5 million tonnes, or 21 per cent of total loadings.

Table 12-18 details traffic flows from Canada to the United States in 1999.

Imports

Unloadings of shipments at Canadian ports originating in the United States rose from 41.2 million tonnes in 1998 to 42.2 million tonnes in 1999, a two per cent increase. Significant commodities, in terms of volume, included (in million tonnes) coal (18.6), iron ore (6.3), stone and limestone (3.0), fuel oil (2.1), corn (1.9), other petroleum products (1.7) and soybeans (1.5). Together, these seven commodities accounted for 83 per cent of all marine imports from the United States.

As with exports, there was considerable instability in the volumes of marine imports from the United States compared with 1998 volumes. Imports of corn and coal were up 64.1 and 4.9 per cent, respectively. Fuel oil showed a 12 per cent drop. Volumes of stone/limestone and iron ore decreased by 0.2 and 0.5 per cent, respectively.

The bulk of all marine imports from the United States, 77 per cent of the total volume, originated at ports on the Great Lakes. Ports along the US Atlantic and the Gulf of Mexico accounted for 16.6 per cent, with US Pacific ports making up the remaining 6.4 per cent.

Table 12-19 shows the traffic flow from the US to Canadian ports in 1999.

Overseas Freight Traffic

Canadian marine trade with overseas countries (excluding the United States) totalled 179.2 million tonnes in 1999, down 0.1 per cent from the 1998 total of 179.4 million tonnes. Over the last 10 years, this trade has been strongly export-oriented, with the loading share going back and forth between 67 and 79 per cent. The majority of total loadings to overseas countries (about 61 per cent) took place at West Coast ports, while 89 per cent of overseas imports were unloaded at Canada's East Coast ports.

Table 12-20 shows Canada's maritime overseas trade from 1986 to 1999.

In 1999, the Canadian marine trade with overseas countries (excluding the United States) was valued at $73.2 billion. Of this, exports made up an estimated $33.2 billion and imports $40.0 billion. Marine transport accounted for 48 per cent of all overseas trade and was the dominant mode for shipping overseas freight.

For more detailed information concerning Canada's offshore trade, see Chapter 8, "Transportation and Trade."

Exports

Canadian marine loadings destined for non-US countries in 1999 generated 119.9 million tonnes of traffic, down 0.2 per cent from 1998 levels. The major commodities shipped from Canada were (in million tonnes) coal (31.7), iron ore (19.7), wheat (13.9), containerized freight (12.9), woodpulp (7.2), sulphur (5.4) and potash (4.3). Of outbound loadings, 11 per cent were containerized.

Some of the major commodities loaded in 1999 showed a significant decline over 1998. Coal shipments were down by 3.1 per cent, iron ore by 6.5 per cent, and wheat by 1.4 per cent. Containerized freight and sulphur volumes increased by 13.6 and 3.8 per cent, respectively.

Approximately 61 per cent of Canadian loadings for overseas destinations came from western Canadian ports in 1999, while ports along the St. Lawrence Seaway system handled most of the eastern share. Not surprisingly, the direction of trade was highly polarized, with the western ports dominating (69 per cent) the Asia and Oceania trade routes, and the Eastern ports handling 65 per cent of tonnage shipped to Europe.

Table 12-21 shows Canada's maritime traffic to overseas destinations in 1999.

Imports

Marine shipments from overseas origins unloaded at Canadian ports totalled 59.3 million tonnes in 1999, a 0.2 per cent increase over 1998. Crude petroleumNote 8 dominated imports at 28.4 million tonnes, or 48 per cent of all tonnage unloaded from offshore origins. Other major commodities unloaded included (in million tonnes) alumina and bauxite (5.2), containerized freight (9.0), iron and steel (3.2), fuel oil (1.8), coal (1.8) and gasoline (1.6). Of the inbound traffic, more than 15 per cent was containerized.

Eastern Canadian ports unloaded more than 89 per cent of inbound overseas shipments. Overseas cargo originated mainly in Europe and South and Central America.

Table 12-22 shows Canada's maritime traffic from overseas markets in 1999.

FREIGHT TRANSPORTATION

Rail Transportation

Trucking Transportation

Marine Transportation

Air Transportation

NOTES:

3 Maritime traffic that originates from and is destined to a Canadian port; flows count traffic volume only once, in contrast to port loadings and unloadings, for which, in the case of domestic traffic, the same volumes get counted twice.

4 Traffic to and from foreign countries other than the United States.

5 Based on traffic flows rather than tonnage handled at Canadian ports (domestic volumes are not double counted).

6 It is important to note that the data in Tables 12-15 and 12-16 are not adjusted for US transshipments moving through Canadian ports. Much of this traffic moves on conference vessels but at non-conference rates. The route that is likely most affected is that between Europe and Canada. The Port of Montreal estimates that around 50 per cent of its liner traffic originates in, or is destined for, the US. The Port of Halifax is also handling growing amounts of US Midwest traffic. This would, of course, affect the balance between conference/non-conference traffic further in favour of independent operators.

7 Including in-transit and transshipment cargo.

8 Including transshipment of North Sea crude petroleum