Supply chain grunts keeping you waiting? The Port of Montreal has a location

Pent-up consumer demand after two years of supply chain disruptions has led to bottlenecks at major ports

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The head of Canada’s second-largest port has a supply chain sales pitch that few of his peers in the global shipping industry can match: no wait times at sea for container traffic.
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Martin Imbleau, general manager of the Montreal Port Authority, said the ability to dock and load efficiently there attracts new customers, even if it means traveling the St. Lawrence River, 1,000 kilometers away. inland from the Atlantic Ocean.
“A longer route, in some cases, becomes preferable if it provides reliability,” Imbleau said in an interview.
Pent-up consumer demand after two years of supply chain disruptions has resulted in bottlenecks at major ports. Wait times at Montreal’s main competitor on the East Coast of North America, the ports of New York and New Jersey, soared to 4.75 days at the end of 2021, compared to an average of 1.6 days over the whole year.
Shipping patterns change accordingly. For example, China now accounts for more than a quarter of all Port of Montreal traffic, compared to almost nothing five years ago, Imbleau said. Much of this new traffic enters the Atlantic Ocean through the Panama Canal, stopping in Montreal on the way to Europe.
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The shipping and logistics industry is also reorganizing. Imbleau said he expects to see consolidation as shipping providers, aware that they are only as reliable as their weakest partner, try to take control of more stages in the supply chain. ‘supply. French giant CMA CGM SA’s purchase of an auto freight business this month is the latest example of this trend, Imbleau said.
A longer route, in some cases, becomes preferable if it ensures reliability
Martin Imbleau
Rising interest rates will increase borrowing costs for inventory and shipping activities, Imbleau said. This is on top of the premium manufacturers have paid to transport their goods during the pandemic.
“Export and import prices are still very, very high,” Imbleau said. The cost of sending a container from Montreal to Asia has doubled since the start of the pandemic, he said, while the cost of bringing one from the same region has roughly tripled. .
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Delays and disruptions are prompting manufacturers to keep more components on hand, a reversal of the just-in-time lean inventory model that crumbled in the early months of the pandemic.
That means “buying stock not three weeks, not three months, but six months in advance and storing it somewhere,” Imbleau said, adding that he expects shipping lines and ports to consider add warehouses or distribution centers to their facilities.
Financing may be more expensive for goods in storage than for goods in transit due to the risk that demand for the goods may weaken while they are in storage. “Not all financial institutions like to finance inventory,” he said. “So cash flow management for some players could be a concern next year.”
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In addition to China, Imbleau expects to see more traffic from Indonesia and India passing through its port. He also said that BRP Inc., the recreational products subsidiary of Montreal aerospace manufacturer Bombardier Inc., is doing more and more business with Vietnam.
Canada’s main gateway to Asia is on the Pacific coast in Vancouver. The Port of Vancouver handles more than three times the container traffic of Montreal, and wait times exceed a week.
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Of course, New York remains an irresistible destination for so much freight. The Port of New York and New Jersey handled nearly seven times more container traffic in February than Montreal, despite long wait times.
“If you’re going to have a shipment and unload a cargo before continuing on to Europe, you want to maximize the potential consumers you can also ship to,” Bessma Momani, political economist and senior fellow at the Center for International Governance Innovation in Waterloo, Ontario, said by telephone. “You just can’t compare the roughly 40 million people in Canada to the nearly 400 million in the United States.
Yet Imbleau, a 49-year-old lawyer who joined the port as CEO in early 2021 after two decades as an energy industry executive, said: “We are perhaps a little more long, but certainly reliable – and no waiting time. whether in the St. Lawrence River, at the Port of Montreal. Nothing. There aren’t too many ports that can say that.
Bloomberg.com