Transcript China Speech

Canada-China Trade:
Impact on Canadian Road Transport
& Lessons Learned from
Trading with the “Other Giant”
David Bradley
CEO, Canadian Trucking Alliance
Beijing, September 26, 2005
China-Canada Relations

Norman Bethune
 Field

surgeon (1937-39)
Pierre Trudeau
 Diplomatic

Jean Chretien
6

relations (1970)
official visits (1993-2004)
People:
 Nearly
3 million Canadians of
Asian origin
 (35% of Vancouver & 28% of
Toronto’s population)
 China = Canada’s second
largest source of students
Canadian Trucking Industry

If you got it a truck brought it:
 90%
of all consumer products &
foodstuffs
 Two-thirds of Canada-US trade

Competitive service:
 $55
billion a year industry
 >10,000 for-hire companies
 170,000 Class 8 trucks

Major employer:
 400,000
+ employees
 Largest occupation (males) = truck
driver (265,000)
Canada: Trading Nation






Canada-US + world’s
largest trading partnership
Each other’s largest
trading partner
For how long?
US trade = 73% of
Canada’s trade with the
world
40% of Canada’s GDP
dependent on trade with
US
86% of CDN exports go to
US
US Top 5 Trading Partners
(US$ millions)
400000
350000
300000
250000
200000
150000
100000
50000
0
Canada Mexico
China
Japan Germany
Canada-China Trade


China is Canada’s:
 2nd largest trading partner
 2nd ($24 billion) in imports
 4th ($7 billion) in exports
1999-2004:
 Total China-Canada trade
aagr of 21%
However, Canada losing
share of exports to China
 Pattern of trade has
shifted in past 20 years
 1984 Canada exported 4 X
what it imported
 Balance of trade opposite
direction
Trade Partners
1.
2.
3.
13.
USA
Japan
South Korea
Canada
USA
China
Japan
1.
2.
3.
Composition of Exports (PRC/Can)
1. Electrical machinery
2. Boilers, appliances
3. Toys, sporting goods
4. Furniture, bedding, ,etc.
1. Wood pulp
2. Organ. chemicals
3. Electric machinery
4. Fertilizers
China-Canada Trade (1995-2004)
30000
25000
C$ millions

20000
Imports from China
15000
10000
5000
Exports to China
0
95
96
97
98
99
'00
'01
'02
'03
'04
North American Trucking:
#1 Challenge -- Capacity

Driver Shortage
 Oldest
workforce
 Few young workers
 225,000 truck drivers by 2008

Border Bottlenecks
 US

security measures
Infrastructure Gap
 Canada-US
bridge capacity
 Highway congestion
 Port congestion
China Factor

Capacity crunch:






Diesel fuel:


Impact on infrastructure & all modes
More containerization = more congestion
West Coast ports (3,000 containers/day;
40% of all goods move by truck)
Record TEU (2004), up 11% (2005)
Shifting traffic patterns (retail sector
through Panama)
Diesel more expensive than gasoline
Currency issues:

Nuan vs US dollar
Feeling the Strain

Rail:
 Shortage

of intermodal rail cars
Trucks:
 Shortage
of drivers & trucks
 Labour unrest at ports

Congestion:
 Ports
 Road

& border congestion
Service:
 Longer
waits impact JIT
Industry Response: The Perfect Storm



Opportunity:
 Best opportunity in 30 years
to raise trucking rates
 Accessorial charges
 Fuel surcharges
 Driver pay
Customer Relations:
 Increased co-operation
between carriers & shippers
 Shippers of preference
Government Relations:
 Waking up
Recent Statements from Government

“The rest of the world has not been standing still – far from
it. A booming China is changing the competitive landscape
and causing the reconfiguration of global supply chains
…NAFTA provided an important first step, now we must
take our game to the next level.”


“… emerging economies of China, India and Brazil
represent an increasing challenge, forcing our
transportation system to rapidly evolve and adjust to
economic globalization and integration.”


David Emerson, Minister of Industry Canada, June 2005
Jean-C. Lapierre, Minister of Transport Canada, May 2005
"Success in the 21st-century global economy demands
regional …regional integration and cooperation will be
necessary to ensure that North America remains
competitive in the global economy."

Carlos Guetierrez, US Secretary of Commerce, June 2005
Response: Governments

Security & Prosperity Partnership):
 US/Canada/Mexico
 300 point plan
 Eliminate barriers to trade
 Tyranny of small differences
 Tax/registration compacts

Key: Efficient flow of goods across US border:
 Essential to maintain Canadian route as key
corridor/gateway for Asia-US container traffic
 Security risk assessment
 Paperless border, ITS
 International bridge capacity

Infrastructure Investment:
 Port capacity expansion
 Highways
The New Reality

When economies grow, things
change – fast. When trade accounts
for a large part of that growth –
there’s going to be plenty of change
in transportation and logistics
services.


Countries that resist adaptation put
their economic future at risk.


Traffic World, May 2005
David Emerson, June 17, 2005
The future is not what it used to be.

Yogi Berra
Xie Xie