Achi news desk-
After a year of record numbers, the Port of Vancouver could see even more traffic following attacks on cargo ships in the Red Sea, the port’s CEO said.
“We know that the effects of the Red Sea have caused significant cargo redirection for shipping operators to all markets,” Peter Xotta, head of the Vancouver Fraser Port Authority, said in an interview Friday.
“I expect that could lead to an increase in the short term for cargo coming into the Port of Vancouver,” he said. “We’ve seen a boost in volume in early 2024 – some of that could be partially related to those events.”
Whether the trend continues depends on events closer to the Suez Canal, which container ships have largely avoided for months because of the ongoing conflict in the region.
Since December, maritime attacks by Iran-backed Houthi militants have pushed carriers to stay away from the Red Sea and reroute around Africa, adding weeks to the journey.
On March 6, fighters hit the bulk carrier True Confidence, killing three civilians. They were the first deaths since the militants began targeting ships linked to Israel, the US and the UK
A scattering of cargo ships have chosen to head east across the Pacific Ocean to North America from parts of Asia rather than make the long journey west around the Cape of Good Hope.
“Any of these things that create more volatility in the supply chain ultimately affects its performance and cost,” Xotta said. “So more stability is a good thing.”
Last year, an unprecedented 150.4 million tonnes of bulk, bulk and container cargo passed through the docks at Canada’s largest port, the Vancouver Fraser Port Authority said.
The surge indicated a six percent increase from 2022, despite a scattered global economy and a large drop in container loads.
Bulk exports – wheat, canola and petroleum, in particular – drove the increase, as did container exports and car imports.
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However, overstocked retail inventories and cooling demand dragged down container imports – and container shipments in general – the port authority said.
“It was a mixed year at the Port of Vancouver, with growth in some sectors and softening in others,” the federal agency said in a statement.
“With the pandemic early on, we saw very strong consumer buying driving container volumes,” Xotta said in the interview.
He also noted the subsequent reduction in spending on consumer items amid higher living costs and spending increasingly diverting towards services rather than products.
“One could predict that we will start to see a recovery during 2024 and certainly in early 2025,” he said. “At least that’s our hope.”
A big drop in household goods – the category that accounts for almost a third of containerized items in, from towels to televisions – led to a 12 per cent drop in container loads overall at the port.
About 79 percent of domestic products came from China, with Vietnam and South Korea second best. Fewer imported building materials and industrial and auto parts also fueled the drop in container figures.
The increase in container exports – particularly boxes loaded with wood pulp and specialty crops, such as pulses bound for India – helped offset the fall in.
An economic slowdown, a 13-day strike by B.C. dockworkers in July and ongoing disruptions along the Red Sea and Panama Canal trade routes all challenged smooth operations at the port, Xotta said.
Its 12 percent boost in overall exports to 142 countries despite those obstacles demonstrated the value of a diverse range of cargo types and national partners, he added.
Grain and crude oil – China and the US, respectively, got the most – drove the spike in bulk exports on the heels of a bumper crop and a record surge in oil output from Alberta. Fewer exports of forest products and fertilizers marred the figures.
Meanwhile, the number of vehicles entering Canada through the port rose 36 percent to more than 454,000, as manufacturers smoothed supply chains.
But for many shippers, the year was launched on stormy seas.
Drought in Central America led to more problems amid the Red Sea crisis. The dry spell has inundated the Panama Canal with water, which is used to raise and lower ships in a dozen locks, prompting officials to cut the number of boats they let through the waterway.
“I foresee people looking at the potential through Canadian supply chains as a result,” Xotta said.
However, routes between East Asia and the West Coast are generally less affected. While shipping rates on shipments to the western United States from East Asia have tripled over the past year, rates on cargo in the opposite direction have dropped 28 percent, according to freight analytics firm Xeneta.
On the Asia-Europe routes, rates have risen dramatically for cargo ships coming and going.
& copy 2024 The Canadian Press
