MarketsFarm – Even though harvest in Canada is months away, major issues with shipping by container out of the country needs to be resolved, according to Greg Northey, vice-president of corporate affairs for Pulse Canada and the spokesperson for the Coalition to Fix the Container Crunch.
“The worry in the fall is if we have a crop that bounces back to normal size that we’re going to be facing really acute problems,” he stated.
During the COVID-19 pandemic, not only have shipping costs for exporting by container skyrocketed, but the containers themselves have become harder to come by, Northey said.
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Mark Hemmes, president of Quorum Corp., which tracks grain movement in Canada, said the federal government’s Shipping Conferences Exemption Act is at the root of the container issues in the country. He equated the shipping conferences to cartels.
“It goes without saying that the whole container issue is being a problem for everybody. Although prices have come down considerably, but nothing close to where they were pre-pandemic,” Hemmes commented.
The situation for Canada is likely to become worse, making its exports much less palatable to foreign customers, due to legislation passed by the United States. Northey said the U.S. recently approved the Ocean Shipping Reform Act, which is to allow regulators to investigate complaints regarding the lack of service and being refused service, along with issues pertaining to detention and demurrage costs.
“[The shipping lines] are making a lot of money providing very unreliable and quite poor service,” Northey charged.
In light of the legislative moves by the U.S. Congress and President Joe Biden, Northey suspects it won’t have any major positive effect on Canada.
“We will be at a significant competitive disadvantage just in getting service,” he warned.
That’s a massive obstacle for the Canadian pulse industry, as 40 per cent of all pulse exports are moved by container, Northey said. For lentils alone, he noted its 50 to 60 per cent.
“The bulk handling system is more geared towards wheat, canola and filling bulk vessels. Our customers for these pulse products do not desire a full bulk vessel,” Northey said.
Although the federal government formed a task force to look into the issues surrounding containers, there has yet to be anything said about effectively resolving those problems, according to Northey. However, he said the Competition Bureau of Canada has made some effort in investigating the situation.
“Any acknowledgement of this issue by the government is important as it can help drive shipping lines to provide a bit better service,” he stated.
Northey said the Coalition to Fix the Container Crunch has been pressing the Trudeau government to create and enact legislation very similar to that in the U.S. The coalition is comprised of 11 farm and business groups, including Pulse Canada.
