As the Canada-Europe free-trade deal comes into force, container-ship company Maersk Line is adding new service between Montreal and ports on the Mediterranean Sea in a bid to tap new flows of goods.
The Comprehensive Economic and Trade Agreement (CETA), which will be provisionally implemented in September ahead of ratification by all member countries, eliminates European tariffs on key Canadian exports while phasing in free-market access on other products.
"Our service is a reflection of our confidence in Canada's position amongst the world's trading countries," Jack Mahoney, president of Maersk Line Canada, said in an interview. "We're looking at CETA as supporting that initiative. We do want want to make it even easier for Canada to reach the world."
Maersk Line's new weekly container ship out of Montreal launches Sept. 30 and complements the Denmark-based company's ports of call at four major Canadian ports: Vancouver, Prince Rupert, British Columbia, Halifax and an existing Montreal service. From Mediterranean ports in Italy, Spain and France, shippers can reach markets in the Middle East, Pakistan, Sri Lanka and other destinations.
Mr. Mahoney said Maersk, the world's largest container-ship company, has seen its Canadian volumes grow by 15 per cent this year amid strong global demand for domestic grain, meat, wood and other domestic products. The bilateral trade deal between Canada and the massive 28-member European region should spur even greater growth, he said.
The International Monetary Fund in July said Canada's 2017 economic growth, driven by "buoyant domestic demand," will be the strongest of the G7 countries. The domestic economy will expand by 2.5 per cent this year and by 1.9 per cent in 2018, the IMF said, lagging global-growth forecasts of 3.5 per cent and 3.6 per cent, respectively, but outpacing U.S. expansion.
The IMF's quarterly update also highlighted "stronger momentum" in rising domestic demand in France, Germany, Italy and Spain, and said growth in global trade and industrial output is topping 2015-16 rates.
Maersk, Hapag-Lloyd and other shipping lines carry cargo boxes that move by ship, truck and rail, known as intermodal containers. Most consumer goods and a range of industrial materials are moved in the containers. Recently, the containers have been used to move such agricultural crops as peas and lentils.
Container volumes are a closely watched economic indicator.
The number of intermodal container carloads moving on North American railways is up by almost 5 per cent this year, compared with the same period in 2016, according to the Association of American Railroads.
At B.C.'s Prince Rupert port, container export tonnage rose by 23 per cent in the first six months of the year, compared with the year-earlier period. Imports rose by 10 per cent, according to the Prince Rupert Port Authority. Import volumes at major North American ports is also strong, up an average of 7 per cent this year.
Fadi Chamoun, a stock analyst with Bank of Montreal, attributes the rise in container shipments to strong international trade, stabilizing retail inventories and robust consumer demand.
The global shipping business, which moves 90 per cent of the world's goods, has endured several years of falling rates and bankruptcies amid an oversupply of vessels and weak economic demand.
Mr. Mahoney said the current balance of available ships and economic growth is the healthiest since 2010, and consolidation has stabilized the industry while offering predictability to importers and exporters.
Parent company A.P. Moller-Maersk AS last week posted a $264-million (U.S.) loss in the second quarter, mainly due to charges over lower tanker values and lost contracts at its APM Terminals division. The container shipping wing, Maersk Line, swung to a $339-million profit as shipping rates rose by 22 per cent.