Production of grain in Canada has a strong outlook for 2022, especially after a severe drought devastated last year’s harvest. Canola is Canada’s second biggest winter crop, and this season’s production is expected to be 46% higher than last year’s harvest.

A potential strike was averted last week as a last-minute deal was reached between U.S. railroads and 60,000 rail employees. The Biden administration helped to broker a tentative deal after 20 hours of intense talks, preventing a work stoppage that would have been a major hit to the U.S. economy already struggling with high inflation, a labour shortage, and supply-chain disruptions. The new contracts give rail employees a 24 percent wage increase between 2020 to 2024.

Sluggish global demand, market uncertainy from the Ukraine war, and Covid controls are creating challenges for China’s factories. As China’s economy struggles to recover, many factories in China’s manufacturing hub of Dongguan are scaling down or closing. In August, China’s exports to the United States fell for the first time in two years and manufacturers cut jobs for the fifth straight month, leaving many migrant workers unemployed.

The price of goods manufacturing in Canada has declined for three straight months, according to the Conference Board of Canada. The main reason is because both global shipping costs and delivery times declined in that time, meaning that long-lasting supply chain challenges through COVID-19 are finally starting to dissipate.

Halifax Stanfield Air Cargo Logistics Park (ACLP) has officially opened, making it Atlantic Canada’s largest air cargo processing facility. The $36 million project was funded by the Government of Canada’s National Trade Corridors Fund ($18 million), the Halifax International Airport Authority ($13 million), and the Government of Nova Scotia ($5 million).

According to IATA World Air Transport Statistics (WATS), overall global air cargo volume increased by 18.7% in 2021, after a decline of 10.6% in 2020 and an increase of 6.9% in the pre-Covid year of 2019.

Inland rail congestion in the United States is impacting the number of import containers moved by rail from Los Angeles-Long Beach. In 2019, 67.9% of imports to LA-LB were moved by rail. Between January to April this year, the number has dropped to 40.8%.

The merger between Canadian Pacific Railway Ltd. (CP) and Kansas City Southern (KCS) is one step closer to completion, as it recently received clearance from the U.S. Committee on Foreign Investment. The deal isn’t done yet, as it still requires approval from the U.S. Surface Transportation Board, which expects to complete its review in early 2023. Mexican regulators have already given their approval.

Weeks of inland congestion and rail car shortages, especially in Toronto and Montreal, is causing some shipping lines to make changes to their scheduled calls at the Port of Vancouver. The second largest shipping line in the world is sending some vessels to alternate US ports to temporarily discharge Vancouver rail cargo.  We anticipate that there will be some delays for import cargo coming into Canada.

Hapag-Lloyd recently launched a new weekly service that calls Hamburg, Germany and Antwerp, Belgium, before reaching Port Saint John in New Brunswick. From Port Saint John, containers can be transported via CP Rail to Toronto, Winnipeg, Regina, Calgary, Edmonton, and Vancouver in Canada, and Chicago, Detroit, and Minneapolis in the U.S.

Flight cancellations and disruptions in Europe have dominated the news, causing havoc not only for travelers, but also for shippers of air cargo. The issue is that airlines, airports, and ground-handling companies have chronic staff shortages, which has been caused by rising COVID-19 infections, a swell of travelers during the summer holidays, and higher cargo volumes after Shanghai and Hong Kong’s restrictions have lifted.

As part of #EVWeek in Canada, the Minister of Transport announced a four-year $550 million program to help businesses switch to zero-emission vehicles. The government’s goal is to “help reduce pollution, create more well-paying jobs, and build a cleaner world for generations to come.”

Of the estimated 125 container ships waiting off North American ports in early July, 64% were waiting off East and Gulf coasts, with only 36% off the West coast. That represents an estimated $40 billion in cargo, waiting an average of 8-10 days to dock on the West coast, and 11-13 days to dock on the East and Gulf coasts.

A possible economic recession, persistent port congestion in the US and Europe, and the impact of China’s recent pandemic shutdowns are causing breakbulk charter rates to start falling. The average daily rate for multipurpose/heavy-lift vessels dropped by 0.6% in June, with predictions of dropping another 4.9% by the end of the year.

Independent truck drivers started protesting last Monday, July 18, significantly hampering operations at the Port of Oakland. Truckers are upset at California’s new state law, known as AB5, which will force an estimated 70,000 independent truckers to find work as employee-drivers or pay more for insurance to stay independent.

Having navigated the effects of the COVID-19 pandemic, which saw significant drops in container volumes in 2020, carriers have shown a willingness to adjust capacity to demand, skipping sailings to keep utilisation and rates elevated. Port congestion and equipment shortages have also contributed to keeping rates up, with current spot rates from Asia to the US West Coast at $7,930, and trans-Atlantic rates from North Europe at $6,593, both figures up significantly from the previous year.

In a survey of 36 senior trucking industry executives, whose companies combined comprise over 39,000 trucks and 40,000 employees, fossil fuel reduction and concerns about labour shortages topped the list of anticipated changes in the coming 10 years.

An earlier-than-normal peak season is expected at the Port of Angeles as retailers build up inventory to meet the demands of consumer purchasing. The port handled 970,000 units of cargo in May, the third-busiest month on record for the United States’ busiest port; Asian imports to West Coast ports were up 60 percent in May and 57.1 percent in April.

On June 15, CN received 72-hour notice from the International Brotherhood of Electrical Workers of the union’s plan to strike, as signals and communications employees seek increases in wages and benefits. CN representatives say they are optimistic an agreement can be reached without disruption. Even as the strike began, the large transportation company says operations are not impacted and none are expected.

On June 15, South Korea’s unionized truckers ended their eight-day strike and returned to work, averting further disruption of shipments that included steel, autos, and cement. The cost of the nationwide strike, in lost output and unfilled deliveries, has been estimated at more than $1.2 billion.