One sign that the next few months will be marked by a slowdown in the economy is activity in the Port of Montreal.
• Also read: Port of Montreal: Activity on the up after two years of decline
After a chaotic 2022 marked by congestion, the Port of Montreal has regained momentum due to a drop in the number of containers passing through it, of the order of 2% to 5%.
“I like to say that we are a predictive indicator: if things slow down here, economic activity will slow down in all regions of Quebec and Ontario,” observes CEO Martin Imbleau.
Photo provided by the Port of Montreal
Martin Imbleau
However, another factor explains the decline in the flow of goods in the port. Supply chains have been so disrupted during the pandemic that companies have become very prescient and have had to build up large inventories to ensure they can meet demand.
“Big traders and industries now have very high inventories. When consumer demand slows and inventories fill up, they stop buying. It’s not dramatic, but we can see it,” says Mr Imbleau.
“Our logistics and trading partners tell us that they expect a return to normality and a reasonable increase from the summer. We are six months behind Europe,” he continues.
$850 million project
Despite the economic turmoil, Montreal’s port facilities are threatening to reach full capacity within five years.
“Our expansion project in Contrecœur is therefore necessary and urgent,” says the CEO. It is the largest project in history on the Saint Lawrence River. We will increase containerization capacity by 50% to serve the Quebec and Ontario regions. »
Bidding for the $850 million project started internationally in 2021. Three finalists were selected last year and in the coming months the Port of Montreal will announce the consortium selected to build and operate the terminal.
Certain approvals remain to be obtained and the financial package finalized. The Port Authority hopes to start work in the fall. The construction period is three years with expected commissioning at the end of 2026 or beginning of 2027.
India overtakes Germany
To the great surprise of the Montreal Port Authority, India overtook Germany as its most important trading partner last year, while trade with this country was still marginal a few years ago.
“We are seeing a geopolitical and strategic repositioning of the Canadian economy towards India,” said Mr. Imbleau, noting that China nonetheless remains a key partner.
The Indo-Pacific region will bring together two-thirds of the world’s middle class by 2030 and trade with this region is expected to increase.
The Philippines, Indonesia and Vietnam are also becoming important partners for the Port of Montreal.
“There are now strategic commodities traded with Vietnam, such as electronic components and engine parts,” Mr Imbleau said, illustrating the changes underway as several companies seek to reduce their reliance on China.
Congestion issues affecting all of Quebec
When unveiling its Towards 2035 strategic plan earlier this year, the Port of Quebec did not rule out increasing its container handling capacity in the coming years.
Could this be a solution to the difficulties faced by companies with import, export and transport, recently documented by the Greater Lévis Chamber of Commerce and Industry (CCIGL)? The latter consulted more than 50 companies on the south coast between Drummondville and Bas-Saint-Laurent and uncovered problems with costs and access to goods.
lack of space
“Companies are struggling to access warehouse space in Montreal, they are experiencing delivery delays and many carriers no longer want to serve the island of Montreal,” said Isabelle Lavallée, director of communications at CCIGL.
Traffic congestion in Montreal hurts businesses in other regions because airlines refuse to go to the island or charge very high fares. Searching for available containers is also a problem. And all of this is reflected in consumer prices.
“There may be local solutions that could help, by train, port or even airport,” Ms Lavallée said.
The Quebec Port Authority is listening.
Photo Stevens LeBlanc
Mario Girard, Port of Quebec.
“We will meet with the Lévis Chamber of Commerce because that is part of our mission. We will listen to their problems and see if we can find solutions,” Port of Quebec CEO Mario Girard replied when asked.
strategic alliance
Since last summer, the Port of Quebec has been working with the ports of Trois-Rivières and Montreal on specific issues, an unprecedented alliance aimed at making the Saint Lawrence River more competitive.
The connection between the ports and the transport networks is also a concern of the alliance, which is keen to solve problems in the supply chain.
The CEO of the Port of Montreal recognizes a lack of transhipment and storage centers in Quebec and wants to take initiatives in this direction in parallel with the Contrecœur expansion project on the south coast.
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