The amount of cargo sailing on the St. Lawrence Seaway has sunk to the lowest levels in seven years amid a plunge in demand for coal and iron ore, two of waterway’s main commodities.
Total freight volumes for 2016 fell by 3 per cent to 35 million tonnes, led by 10-per-cent drops in coal and 14-per-cent declines in iron ore, according to the year-end figures released by the St. Lawrence Seaway Management Corp. on Monday morning.
The slowdown comes even as grain shipments continued their climb, and the 3,700-kilometre route enjoyed its longest shipping season since 2008, due to a mild spring that allowed ships to begin sailing on March 21.
Shipments of wheat, corn and other field crops rose by 4 per cent, highlighting the growing importance of agricultural exports to the seaway, which has seen grain volumes rise by 20 per cent since 2010.
The Port of Thunder Bay has become a major transit point for Western Canadian crops destined for foodmakers in Europe and Africa. The Lake Superior port reported its heaviest December since 1995, after a strong harvest was delayed by wet weather getting to the Prairie elevators. For the full season, grain volumes entering the seaway at U.S. ports in Duluth, Minn.-Superior, Wis., and Toledo, Ohio, rose by 21 per cent.
Helping drive the grain volumes is the recent addition of new crop elevators and flour mills at Lake Ontario’s Port of Hamilton, offering the region’s foodmakers access to Western grain while providing easier access to overseas markets for growers in Southwestern Ontario’s farm belt.
“Without a doubt, agricultural commodities have become increasingly important, and it’s rewarding to see the pace of new investment by grain companies in ports along our waterway,” said Terence Bowles, chief executive office of St. Lawrence Seaway Management, established by the government to operate the Canadian portion of the system, which includes 13 locks between Lake Erie and Montreal.
However, the rise of agricultural commodities has been outweighed by the decline of raw materials used in manufacturing.
Sales of ore, coal and other dry industrial commodities have plunged amid slower economic growth in North America and elsewhere, falling demand for steel and a broad-based switch by power generators to cleaner-burning and affordable natural gas. Since 2010, St. Lawrence Seaway shipments of coal and ore have fallen by about 40 per cent.
In the past several years, two of the three major steelmakers on the Great Lakes – Stelco Inc. and Essar Steel Algoma – have fallen into creditor protection and a handful of mines on the U.S. side of the Great Lakes have closed, reducing shipments for the ships and the railways that serve the mills.
The protectionist warnings of U.S. president-elect Donald Trump have cast doubt on the fortunes of Canada’s exporters, much of whom rely on buyers in the United States. Executives in many industries are waiting to see if Mr. Trump tries to renegotiate tariff deals or impose border taxes, hampering trade.
Pierre Gratton, chief executive officer of the Mining Association of Canada, said he is optimistic the commodities produced by the companies he represents will be spared any new tariffs. “They need what we mine,” he said in an interview from Ottawa.
“I don’t see mining products being in anybody’s crosshairs. So if anything happens at the negotiating table around [free trade], I would hope and also expect we would not be front and centre around any disputes,” he said, adding any loosening of environmental regulations under Mr. Trump would be good for miners.