Shifting trade routes present a challenge to seaports whose strategies and investments in infrastructure and services are shaped by trade flows
* By Lori Musser*
History has been made by trade. In earlier times, gaining access to silk, spices, tea, salt and other precious commodities triggered rebellion, kindled colonization and created fortunes.
The aggregation of products by origin, waypoint and destination and their shipment from mode to mode along a predetermined path creates critical trade routes, every last one of which is temporary.
Trade routes shift. Constantly. That presents a challenge to seaports whose strategies and investments in infrastructure and services are shaped by trade flows.
Seaports carefully study myriad, often subtle, drivers of trade. Sometimes two neighboring ports find their business on similar trades moving inversely because of the vagaries of service, consumption, geography, pricing, weather and many other factors.
Robert Morris, communications director for Georgia Ports Authority (GPA), said, “Sometimes, it just isn’t possible to explain peaks and troughs in cargo throughput. There are many factors at play.” So ports prepare as best they can.
The Alpha Shifts
Joshua Hurwitz, with global infrastructure firm Moffatt & Nichol, described dominant trade route trends impacting North America. “The Asia-North America trade lane is now the largest single trade lane in the world, surpassing Asia-Europe in 2013. Its growth is due to a combination of a robust U.S. economy and the rapid development of Asia,” said Hurwitz.
On the Canada East Coast-Europe trade lane, the new Comprehensive Economic and Trade Agreement has helped reel in three consecutive years of strong growth. “The Port of Montreal TEU volume increased 9% last year alone and appears on track to end 2019 with 20% higher volumes than before the trade agreement,” said Hurwitz.