The amount of freight moving on the St. Lawrence Seaway is up by 20 per cent this year, driven by a sharp rise in iron ore and grain shipments.
Shipments hit 12 million tonnes as of June 30, a sign the North American economy is gaining speed after a trough that dampened trade in the waterway's main commodities.
"Cargo volumes have improved in almost every category from iron ore and grain to road salt and construction materials compared to last spring," said Terence Bowles, chief executive officer of the St. Lawrence Seaway Management Corp., which manages the Canadian portion of the 3,700-kilometre route that connects North America's farmers, mills and factories with global markets.
Shipments of Canadian wheat, canola and other grain increased by 14 per cent compared with the same period a year ago, as traders moved leftover stockpiles from the 2016 harvest to the terminals on the north shore of the St. Lawrence River.
Joining the movement of crops this year is a G3 Canada Ltd. vessel, which shipped the first load of grain from the company's new terminal in Hamilton, Ont. G3, a partnership between the U.S. and Saudi Arabian buyers of the Canadian Wheat Board, ships Ontario and prairie crops to its terminals in Quebec and Trois-Rivieres, where they are loaded onto so-called salties for foreign markets.
Similarly, iron ore pellets loaded on ships at Minnesota's Port of Duluth are carried to the Port of Quebec before being transferred to ocean-going vessels. Demand from steel makers in China and Japan sent iron ore volumes up by 65 per cent, the Chamber of Marine Commerce said on Wednesday.
The economies of Canada and the United States have posted better – though low single-digit – rates of growth this year. On the St. Lawrence Seaway, this is playing out in the form of a 29-per-cent rise in shipments of general cargo, including steel and aluminum used in auto making and construction.
The Port of Thunder Bay's potash shipments almost tripled over last year to 252 tonnes, including direct transport to buyers in Brazil and Europe.
The rise in volumes is a positive sign for the ports, mills and terminals on the Great Lakes and St. Lawrence Seaway, which have been swept up in the global shipping crisis.
Ocean charter rates touched 30-year lows recently, amid an oversupply of ships and sluggish demand for industrial commodities. Although prices to move cargo have rebounded this year, several global shipowners have gone bankrupt, merged or formed alliances with rivals to cut costs. They have also sent a rising number of ships to the scrapyard rather than pay to moor them.
Two domestic ship companies, Algoma Central Corp. and Canada Steamship Lines Inc., have retired vessels and replaced them with more fuel-efficient ships that operate at lower costs.
On the oceans, demand for dry-bulk shipping cooled in the second quarter as Chinese stockpiles of iron ore grew, said Noah Parquette, an analyst with JPMorgan. The tempered demand offers hope shipowners will not resume ordering new ships, a move that would depress charter prices.
"At this point, every day that doesn't see material vessel orders is hopefully another day of good rates in 2019," Mr. Parquette said.