“If you have a cargo with any of the shipping lines, they are ending the journey at a destination that is not on your bill of lading,” said Tala Mobayen, director of Victoria Pulse Trading Corporation.

“They are very, very hefty at this point in time,” she said.

As a result, there is no business being conducted in that market.

“I don’t see anyone buying new cargo because they’re just worried about their safety,” said Mobayen.

Mideast accounts for $769M in pulse sales

The Middle East and North Africa (MENA) region bought 801,000 tonnes of Canadian pulses worth $769 million in 2025, according to Pulse Canada.

Roughly 78 per cent of that business was lentils, with chickpeas chipping in another nine per cent.

Shippers face $2,000-per-container surcharges

Saleh Reda, vice-president of GEDKO Global Trading Partners, said shippers with product on the water heading to the Middle East are being slammed with a US$2,000 per container, or $80 per tonne, surcharge.

They are also being forced to pay an $800 per container, or $32 per tonne, rerouting charge with their cargo being dropped off at the nearest safe port.

“It is for the importer to figure out how to get it from that safe port to their own destination,” he said.

GEDKO ships Canadian pulses primarily to the MENA region, although it services other markets around the world as well.

Reda said further sales to the Middle East market are “frozen” because freight forwarders are telling buyers they must pay a $200 per container emergency conflict surcharge a $500 per container rate restoration initiative fee and a $150 per container emergency fuel surcharge.

“The long and short of it is, I don’t think anybody is really having the stomach to make a sale to that region,” he said.

Algeria adds to regional trade complications

Business was already slow in the MENA region even before war broke out. Liquidity has dried up in the pulse industry due to U.S. President Donald Trump’s tariffs and ensuing market uncertainty.

Reda had been anticipating brisk sales due to vastly reduced pulse prices in 2025-26, but if anything, business has been slower than the previous year.

“The demand was lousy and now it’s lousier,” he said.

Exporters are used to encountering unexpected problems in the MENA region.

For instance, Algeria recently announced that only the Algerian government is allowed to import pulses as of January 2026.

Port closures block access to key distribution hub

In the past, a couple dozen Canadian exporters would ship product to a couple dozen Algerian importers.

“It’s now pretty much going to be just one or two exporters from Canada (shipping) to that one Algerian importer,” said Reda.

“That’s one unfortunate event that has happened recently.”

However, the war in Iran is affecting multiple markets at once. Shippers can no longer access ports such as Jebel Ali located near Dubai in the United Arab Emirates.

It is an important hub that services many other countries in the region.

“As an exporting nation, we need every single market out there to be open for us,” he said.

Red lentil prices slip as markets close

Reda believes the sudden loss of many vital markets in the Middle East will hurt pulse prices in Canada.

Red lentil prices were about $0.23 per pound as of March 16, according to Stat Publishing. That compares to about $0.25 before the onset of the conflict in Iran.

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“What (this) is really saying is that in the next 10 years, our industry is going to grow,” Bill Beisal, transportation co-ordinator for Alberta Milk, said at the organization’s recent fall producer meeting in Lethbridge.

The number of producers has decreased from 843 to 470 in 2023-24, routes have increased from 126 to 175, receiving bays have decreased from 24 to 12 and B-trains went from zero in 2002 to nine in 2023 and a dozen in the last couple of years.

WHY IT MATTERS: Transportation efficiencies are needed for cost savings in Western Canada’s dairy sector.

Beisal said there are 65 milk trucks on the road every day in Alberta, and two million litres of milk are moved every week between provinces.

“I will admit, at times we have to pay more, because logistically, we can’t do it the way that we want to do it, real efficient,” he said.

“When I talk about moving your milk out of province, we’ve got all these loads lined up, and it goes out and hauling companies are lining up their drivers. The days we can stop on a dime and turn everything around like we could 20 years ago are over, but we can still do that once in a while. But the hauling companies really don’t like it because they lose drivers,” said Beisal.

The transportation committees of the western Canadian milk groups meet every Thursday, projecting movement from six months to a year in advance. Each province has its own body, but they have to be on the same page for transportation efficiencies.

Interprovincial milk movement has increased from 33 million litres in 2016-17 to 127 million litres in 2024-25.

“We have a pretty good idea of what we’re going to do and how we’re going to do it,” he said.

“As each week comes up, orders can change easily by one million, two million.”

For example, the week before Alberta Milk’s fall meeting saw an 800,000 litre increase in the Western Milk Pool.

Unfortunately, at times there is the need to “dump” milk for a variety of reasons: milk production exceeding quotas in supply management, market fluctuations for demand such as the COVID-19 pandemic in 2020, supply chain disruptions and the perishable nature of milk. All of these are factored into transportation costs.

“Why does Alberta dump all the milk? I know that’s a swear word here, but there’s a process,” Beisal said.

“Why would we keep moving milk all the way to Manitoba out of Alberta? Why then would we have Manitoba dispose of whole milk? If we have to dispose of whole milk, let’s not move it. Let’s not spend that transportation money. Let’s dispose of it where it’s the most economical. We hate that, but that’s the absolute last thing that happens with your milk, when we have no home for it.”

The western provinces cost share and pool provincial and interprovincial transportation costs.

Alberta and British Columbia each pay 35 per cent of transportation costs and Saskatchewan and Manitoba pay roughly 17 and 13 per cent.

He said it costs approximately $1 million a month to export milk out of Alberta using a transportation rate formula that takes into account hours and kilometres involved.

Alberta and Manitoba have multiple haulers (12 to 13) that deliver to multiple plants. Saskatchewan has one hauler and one plant, while B.C. has one hauler to deliver to multiple smaller plants.

“A lot of that is to give the industry, not only just the producers, but processors as well, the confidence that we can cost share … we can do this together. It’s just going to take a little bit of work,” said Beisal.

The opening of Dairy Innovation West this year in central Alberta is expected to be a game changer for milk transportation.

Raw milk volumes are projected to increase from 43 million litres in July 2026 to 321 million in 2030, which is expected to bring logistical cost savings.

Beisal said Alberta Milk’s success has forced it to pivot in the last 10 years as production grew by 30 per cent.

“Now we’re starting to deal with more and more constraints — time constraints, volume constraints, equipment constraints, a lot of things in your transportation system that needs some improvement.

“We need to find out how to make it better. We’re looking at policy. We’re going to talk with with the processors. We’re going to see how is there anything that they have for us? What can we do for them? What can the haulers do to make this a better network and asset optimization. How can we do that less expensive?”

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That is the backdrop for this week’s S&P Global TPM container shipping and supply chain conference in Long Beach, California, an annual event that marks the start of container shipping contract negotiating season.

Attendees this year include industry heavyweights like container carriers MSC, Maersk and Hapag-Lloyd, marquee customers including Walmart, and major logistics firms including DSV and DHL.

Why it matters: Canadian agricultural goods are shipped all around the world, and Canada is at a freight disadvantage in many markets compared to some competitors

These companies will be grappling with the ripple effects of increased protectionism, which could reduce international trade while weakening the negotiating position of massive container ship owners that have drawn robust profits and for years held the upper hand in pricing.

Trump has already slapped an additional 10 per cent tariff on goods from China, the world’s largest exporter, and has proposed million-dollar port entry fees for Chinese-built ships.

As early as Tuesday, the U.S. could impose 25 per cent tariffs on familiar goods like avocados and tequila from Mexico, and beef, lumber and oil from Canada.

Trump has threatened to levy an additional 10 per cent tariff on Chinese goods. His administration also plans new or higher tariffs on steel and aluminum and has floated 25 per cent duties on products from the European Union.

“Unprecedented uncertainty is all around,” said Peter Sand, chief analyst at transportation pricing platform Xeneta.

The world’s biggest importer’s shift away from free trade hits as global supply chains are managing higher costs from global warming-fueled severe weather and routing ships away from the Suez Canal to avoid attacks by Iran-backed Houthi militants in support of Palestinians in Gaza.

U.S. container imports of everything from plastic toys to machine parts have surged, in part due to early purchases to avoid tariffs. But trade experts warn that a pullback is likely once new import taxes kick in, targeted nations retaliate, and inflation-weary shoppers absorb the brunt of tariff-related cost increases – something that could pressure shipping demand and prices.

The Drewry World Container Index’s spot rate for a 40-foot container was (US) $2,629 as of Thursday, 75 per cent below the pandemic peak of $10,377 in September 2021 and lowest since May 2024.

“The geopolitical landscape has of course become more complex which could lead to wild swings for freight rates in either direction, but our base case is for a moderation throughout 2025,” Jefferies analysts said in a recent note.

In another move that has set off alarms around the globe, the U.S. Trade Representative on Feb. 21 proposed hefty fees on Chinese-built vessels entering U.S. ports under a union-supported plan to spur U.S. shipbuilding.

Under the proposal, a vessel owned by Chinese maritime transport operators including state-owned COSCO would pay a port entrance fee of up to $1 million per vessel. The fee for other operators using Chinese-built ships could top out at $1.5 million.

The change could benefit Taiwanese and South Korean liner operators. Still, experts warn it will have a major impact on container carriers and could translate into steeper consumer prices for goods from toys and clothing to food and fuel.

“The economic burden on U.S. exporters and importers will be huge,” container shipping expert Lars Jensen said on LinkedIn.

“The actions taken by the U.S. administration over the past four weeks are unprecedented in scope and scale.”

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The strike blocks everything from food to automobile shipments across dozens of ports from Maine to Texas, a disruption analysts warned will cost the economy billions of dollars a day, threaten jobs and potentially stoke inflation.

Still, President Joe Biden’s administration has indicated it will not use federal powers to end the strike, and on Tuesday pressured dockworker employers to bump up their contract offer to land a deal.

The International Longshoremen’s Association union, which represents 45,000 port workers, had been negotiating with the United States Maritime Alliance (USMX) employer group for a new six-year contract ahead of a midnight Monday deadline.

The ILA said in a statement it shut down all ports from Maine to Texas at 12:01 a.m. ET after rejecting USMX’s final proposal, adding the offer fell “far short of the demands of its members to ratify a new contract”.

The ILA’s leader, Harold Daggett, has said employers such as container ship operator Maersk and its APM Terminals North America have not offered appropriate pay increases or agreed to demands to stop port automation projects that threaten jobs.

“We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve,” Daggett said on Tuesday.

USMX said in a statement that: “Our current offer of a nearly 50 per cent wage increase exceeds every other recent union settlement, while addressing inflation and recognizing the ILA’s hard work to keep the global economy running.”

Daggett said the union is pushing for more, including a $5 per hour (C$6.75) raise for each year of the new six-year contract.

The White House weighed in, saying it was time for the USMX to negotiate a fair contract for workers.

“Shippers have made record profits since the pandemic, and in some case, have seen profits grow in excess of 800 per cent,” White House press secretary Karine Jean-Pierre said, referring to the COVID-19 pandemic that led to a boom in shipping demand.

“It’s only fair that workers who put themselves at risk during the pandemic to keep ports open see a meaningful increase in their wages, as well.”

Acting Secretary of Labour Julie Su said the employer group has “refused to put an offer on the table that reflects workers’ sacrifice and contributions to their employer’s profits.”

“The parties need to get back to the negotiating table, and that must begin with these giant shipping magnates acknowledging that if they can make record profits, their workers should share in that economic success,” she said.

The strike, the ILA’s first major stoppage since 1977, is worrying businesses that rely on ocean shipping to export their wares or secure crucial imports. It affects 36 ports – including New York, Baltimore and Houston – that handle a range of containerized goods from bananas to clothing to cars.

The walkout could cost the American economy roughly $5 billion a day (C$6.75 billion), JP Morgan analysts estimate.

French shipping group CMA CGM, the world’s third-largest container shipper, on Tuesday issued a force majeure notice over the strike, and said it may charge additional shipping fees for delayed vessels.

The National Retail Federation called on President Joe Biden’s administration to use its federal authority to halt the strike, saying the walkout could have “devastating consequences” for the economy.

Biden officials have repeatedly said the Democratic president will not do so.

The dispute is wedging labour-friendly Biden into a virtual no-win position, with Vice President Kamala Harris in a razor-thin race for the White House with Republican former President Donald Trump.

The U.S. Department of Agriculture said on Tuesday it does not expect significant changes to food prices or availability in the near term.

Grocery chain owner Ahold Delhaize also said it expected minimal short-term impact on its supply chain.

Backup plans

Hundreds of dockworkers demonstrated on Tuesday at a New York City area shipping terminal in Elizabeth, New Jersey, carrying signs and shouting slogans as music blared and vendors hawked food. Daggett arrived to rally them with cheers of “ILA all the way!”

“Everything that comes in this country comes from the containers off these ships that my men work. And I want the world to know it. Don’t come after us saying we’re greedy. Go after those greedy bastards that own these companies in Europe,” Daggett told reporters.

Retailers accounting for about half of all container shipping volume, along with other shippers, have been busily implementing backup plans to minimize the impact of the strike as they head into the winter holiday sales season.

Many of the big players rushed in Halloween and Christmas merchandise early to avoid any strike-related disruptions, incurring extra costs to ship and store those goods.

Retail behemoth Walmart, the largest U.S. container shipper, and membership warehouse club operator Costco say they are doing everything they can to mitigate any impact.

Danish drugmaker Novo Nordisk, meanwhile, said it has workaround plans in place to minimize or prevent any disruption to its production, including by using air freight, CNBC reported on Tuesday, citing a company spokesperson.

Lars Jensen, CEO of shipping consultancy Vespucci Maritime, said the strike is unlikely to lead to any critical shortages, but could raise costs for consumers if it is prolonged.

“At the end of the day, the only one who’s going to end up paying the bill for this is the U.S. consumer, simple as that, because import costs are going to rise and those costs are going to be passed on to all the imported products,” he said.

More than 38 container vessels were waiting at anchor near U.S. ports by Tuesday, compared with just three on Sunday, according to Everstream Analytics.

—Additional reporting for Reuters by Gursimran Kaur, Nilutpal Timsina, Shivani Tanna and Shubham Kalia in Bengaluru, David Shepardson in Washington, Stine Jacobsen in Copenhagen, and Gianluca Lo Nostro in Gdansk.

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Shipping capacity continues to be hampered by ongoing unrest around the Red Sea, wrote FCC senior economist Leigh Anderson in a July 17 article on the lender’s website.

As recently as July 15, Houthi fighters claimed to have targeted three vessels in the Red and Mediterranean seas with ballistic missiles, drones and booby-trapped boats, Reuters reported on July 16.

Since November, the Houthis have sunk two vessels and seized another. This has led to ships avoiding the shortcut of the Suez Canal and rerouting around the horn of Africa.

The much longer journey has negatively affected shipping times and port scheduling, leading to congestion in Asian ports, Anderson wrote. Low water levels in the Panama Canal, bad weather and labour issues in key ports have exacerbated the issue.

This has doubled the Baltic dry index, a global measure of dry bulk freight prices, and more than tripled the world container index, Anderson said—though shipping is still cheaper than in 2021.

Detours around Africa aren’t expected to end soon, said Anderson, but there are signs global port congestion will ease.

Shipping companies are adapting schedules to the new operating environment, with some redirecting to larger Asian ports, unloading shipments, and reloading onto smaller ships to continue to final destinations.

Water levels in the Panama Canal are returning to normal faster than expected due to recent rainfall. Daily transits are increasing and should be near the historic average by August.

“Fuel prices remain a wildcard considing they tend to respond to changes in oil prices and also to changes in inventory, which can be volatile,” wrote Anderson.

In July, U.S. crude oil inventories were down 19 per cent compared to the same month over the last five years. While this could support oil prices, “we’re not anticipating a surge any time soon,” Anderson said.

For Canadian agriculture, the possibility of domestic railway strikes remains the biggest threat to transportation costs, he added.

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About 7 million metric tons per month of grain cargoes usually transit the Suez Canal into the Red, but that has dropped significantly as Iran-backed Houthi militants have continued attacks on shipping despite U.S.-led air strikes on Houthi positions in Yemen.

“We calculate that another 12 vessels were diverted away from the Red Sea this week, carrying a total of about 700,000 metric tons of grain,” said Ishan Bhanu, lead agricultural commodities analyst at data provider and analyst Kpler.

“A total of about 4.5 to 4.6 million tons of grains cargo has avoided the Red Sea since December. We also saw more wheat being shipped from France and the Black Sea to Asia diverting away from the Red Sea.”

Many bulk carriers are still transporting grain through the region, however.

“A lot of vessels originating in the Black Sea are still taking the Red Sea route,” Bhanu said. “Diversion is more expensive for these vessels compared with those sailing from Europe or the United States.”

Commodity traders said it has become more difficult but not impossible to book ships for Red Sea sailings.

“It is hard but you can still find ships,” said one European grain trader involved in booking vessels for cereal exports to Asia. “Freight costs have risen and not all want to sail through the Red Sea even with a premium, but some will.”

One German shipping analyst said that some ship owners already operating in war-torn Ukraine are more willing to take the risk of traversing the Red Sea.

“Some vessels carrying Ukrainian grain exports to Asia are still transiting the Red Sea,” the analyst said. “These owners were already willing to accept the high risk to their ships and crews by loading in Ukraine.”

–Reporting for Reuters by Michael Hogan.

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Bearish production estimates for corn and soybeans from the United States Department of Agriculture’s (USDA) monthly supply/demand report released on Jan. 12 had major effects on prices, according to Jack Scoville from The Price Futures Group in Chicago.

“They increased yields for corn and soybeans in a rather significant way,” Scoville said. “The USDA really did increase demand, especially on the corn side, because of the increased production, but they didn’t increase demand as much as they increased production. That caught the market by surprise.”

While last week’s USDA report caused much of the weakness on the markets, improved weather conditions in Brazil put additional pressure on corn and soybean prices, according to Scoville. U.S. soybean and wheat exports are also less than what they were last year.

“There’s a lot of talk around Chinese demand for soybeans being 20 per cent less this year due to reduced hog herd sizes. That’s also hurting the soybeans,” he said.

Scoville added that wheat futures were also down due to lower prices for wheat exports from the Black Sea region. However, added shipping costs due to vessels re-routing away from the Red Sea amid recent missile attacks are also affecting markets.

“It’s something that we’re watching and we’re hoping that it’s figured out very soon, but so far, the Houthis continue to bomb very indiscriminately,” Scoville said.

He hopes for an uptick in demand in the coming weeks, while also paying attention to weather conditions in the U.S. and South America.

“If the weather becomes problematic in Brazil, it will be positive for prices and we have a whole growing season ahead of us,” he added. “Last year, we had a dry year and all sorts of problems. Those supported prices, as well. Mostly weather and demand are things to keep an eye on.”

March corn dropped to US$4.40 per bushel on Jan. 17, while March soybeans fell to US$12.03/bu. on Jan. 12. March spring wheat in Minneapolis also reached a new contract low of US$6.80/bu. on Jan. 17, while March Chicago and Kansas City wheat contracts were below US$5.80 and US$6/bu., respectively, for the first time since late November.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man. 

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The BDI settled at 1,360 points on Jan. 15, dropping 59 per cent off the high of 3,346 points hit on Dec. 4, 2023, to trade at its lowest level in four months.

The BDI is compiled by the London-based Baltic Exchange and provides an assessment of the price of moving major raw materials by sea. The overall BDI includes sub-sectors for the different classes of ocean vessels – including capesize, panamax and supramax. It is often seen as a leading indicator of global economic activity.

A seasonal slowdown, reduced congestion at Brazilian ports and cancelations of some vessels headed from China to North America were all said to be contributing to the declining rates.

While bulk rates have fallen over the past month, container rates have shot higher. Drewry’s World Container Index (WCI), which tracks container rates, was at US$3,072 per 40-foot container on Jan. 11, 2024 – roughly double where rates stood at the beginning of December.

With more and more vessels diverting away from the Red Sea and taking lengthy detours there were reports of some shipping companies quoting rates as high as US$10,000 per 40-foot container from Shanghai to the United Kingdom, roughly quadruple levels only a week earlier.

Canada is at a freight disadvantage compared to its competitors exporting grains and oilseeds into many markets, with lower freight rates helping counter that disadvantage.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg. 

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Houthi forces in Yemen struck the U.S.-owned and operated dry bulk ship Gibraltar Eagle with an anti-ship ballistic missile, U.S Central Command said on Monday, although there were no reports of injuries or significant damage.

Dry bulk carriers are often used to transport grains although in this case the Gibraltar Eagle was carrying a cargo of steel products.

“This week’s attack is certainly viewed as an escalation by bulk carriers and owners. There is a great deal more concern, and I’m fairly sure it will divert much greater volumes, including grains, to other routes,” the head of the bulk shipping department at a German trade house said.

He was speaking before reports emerged of an empty Malta-flagged, Greek-owned bulk carrier also being hit by a missile on Tuesday while northbound in the Red Sea. There were no injuries.

Ishan Bhanu, Lead Agricultural Commodities Analyst at Kpler, said about seven million tons of grains moves through the Suez Canal in an average month but now about 20 per cent of the cargoes were being diverted around the Cape of Good Hope.

“This number was closer to 10 per cent ten days ago, but we have seen more diversion decisions being made in the last few days. Soybeans from the U.S., wheat from Europe and rapeseed from Australia are mainly affected,” he said.

A senior grain trader at a German trade house dealing with Asia said they were still shipping through the Red Sea but were watching the situation closely.

“There has been no impact for us yet. But I say yet.”

Rerouting appeared to be affecting a large program of French wheat exports to China that started in December.

Among 12 wheat cargoes to have left France for China since last month, five had travelled through the Suez Canal and Red Sea while seven were taking the longer route around Africa, including two that had turned back in the Mediterranean, LSEG shipping data showed.

France is the European Union’s largest wheat exporter and China has become a major destination in recent seasons, particularly as France has lost market share in Algeria.

–Reporting for Reuters by Nigel Hunt in London, Michael Hogan in Hamburg and Gus Trompiz in Paris.

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In a decision handed down yesterday, the Canadian Transportation Agency ruled that the Canadian National Railway Company (CN) exceeded its maximum grain revenue of  entitlements in crop year 2022-23 by nearly $3.5 million. Its limit is $1.08 billion, the CTA said in a news release.

The Canadian Pacific Kansas City Railway Company (CPKC) exceeded it’s revenue limit by almost $3.4 million. Its revenue is capped at $940.5 million.

CN and CPKC have 30 days to pay the overage, plus a five per cent penalty.

By regulation, these payments go to the Western Grains Research Foundation, the news release added.

The railways moved some 60 per cent more grain this year than last year, with over 45.3 million tonnes freighted across the country. Last year, the trains moved 28.4 million tonnes.

The increase can mainly be attributed to recovery after the droughty 2021-22 season, CTA said.

In the last season, both railway firms also exceeded their revenue caps, chipping in $5.7 million to grain research.

Over the 2022-23 season, the bulk of grain moved went to Vancouver, with CN carrying a bit more than 15.1 million tonnes, and CPKC moving just over 15.4 million, according to the CTA’s written decision.

CN brought 4.8 million tonnes to Prince Rupert, just over 1.5 million to eastern Canada, totallying 24.2 million tonnes with an exchange switching adjustment.

CPKC brought 4.6 million tonnes to Thunder Bay, and nearly 861,000 tonnes to Eastern Canada with a total of 21.1 million tonnes moved, including the exchange switching adjustment.

—Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

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