OTTAWA: Maersk Line’s latest North America Trade Report, released last week, predicts that Canada’s imports and exports will grow by seven percent in 2018, higher than that of the U.S. which the company predicts will grow by up to four percent.
Canada is expected to benefit from its first full year of free trade with the European Union after securing the Comprehensive Economic and Trade Agreement (CETA) at the end of last September. Added to that, Canada is moving closer to signing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) involving 11 nations – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – accounting for 15.8 percent of the world’s GDP. The CPTPP accord involves eliminating more than 98 percent of tariff s across the 11 countries.
“The CPTPP will boost trade further, this time on the Pacific, adding to CETA’s positive impact on the Atlantic,” says Jack Mahoney, President for Maersk Line Canada. “We can expect gains to come through the West coast ports of Vancouver and Prince Rupert, the latter offering the shortest distance between North America and Asia. They are both growing as competitive gateways for West Coast North America volumes.”
Both the U.S. and Canada will benefit from an expected increase of more than three percent in global trade volumes this year. However, the U.S. and Canada, which have grown at similar accumulative rates of 8.7 percent and 8.3 percent from 2015 to 2017, have two very different tales to tell this year, says Maersk Line. For the U.S., gains will come from retail, chemicals, consumer electronics and grains sectors but the nation faces a number of homegrown issues as the import-to-export North America Trade Report gap continues to widen. The U.S. is facing a trucking crisis, terminal congestion and bunker fuel rises. Rail infrastructure needs to be updated, terminal competitiveness lags behind other countries and digital transformation is putting pressure on the way the U.S. does trade.
“The U.S. and Canada are growing, and yet they are in two very distinct moments. The U.S. is in digital disruption and transformation, putting pressure on the way the nation trades, so much so that the end-goal must change so that booking a container and moving it across continents becomes as easy as posting a parcel, helping U.S. business flourish locally and globally,” says Omar Shamsie, President for Maersk Line North America.
“It sounds far-fetched when you consider how the industry does business now, but the future of the whole supply chain needs to be discussed at the highest levels. U.S. competitiveness needs to come under a magnifying glass so the whole industry and authorities can address new ways of narrowing the ever increasing gap with imports and update itself in the face of digital disruption and increasing competition from Asia, Latin America and Europe.”
Parent company A.P. Moller-Maersk unveiled a joint venture with IBM earlier this year to create an industry-wide paperless platform that is aimed at speeding up trade transactions, boosting transparency for clients and ultimately saving billions of dollars.
In 2017, U.S. total maritime container imports and exports grew 4.7 percent, up from 3.9 percent in 2016, while Canadian total imports and exports expanded 6.9 percent, up from 1.4 percent in 2016. The U.S. accounts for 24 percent of all global container trade, which moves more than $4 trillion worth of goods a year. Maersk Line moves approximately one in five containers around the world.
