Nova Scotia and Atlantic Canadian seafood, especially lobster, is not just enjoyed by consumers around North America, but around the globe.
However, as you are aware, live lobsters don’t crawl to these foreign markets themselves. Part of the challenge for processors and buyers, notably for a live product such as lobster, is timely and efficient air cargo transportation.
Prior to the start of the COVID-19 pandemic in 2020, air shipments of live lobster from this region were on the increase to destinations in Asia and Europe. More and more cargo jets were leaving area airports, especially Halifax, loaded with fresh and live seafood, so much so, that a major cargo expansion project was announced for Halifax Stanfield International Airport. And despite the fallout of the pandemic, last year, this new intercontinental freight operation, which doubled airport cold storage capacity, opened.
The Air Cargo Logistics Park, a $36-million complex, includes a cargo terminal with cold storage, advanced cargo processing facilities and an apron to accommodate five freighter aircraft. Seafood accounts for 91 per cent of the airport’s exports and is dominated by live lobster.
While Halifax is now poised to be a seafood export leader in eastern Canada, globally, supply chains around the world continue to struggle to bounce back after the impact of COVID-19.
In fact, analysts are reporting that global airfreight weakness has worsened to start 2023 in the face of a global economic slowdown and the lack of a typical bounce around the Chinese New Year holiday.
The International Air Transport Association (IATA) recently reported that air shipment traffic slid eight per cent last year, from record highs in 2021 and was 1.6 per cent less than in 2019, a relatively weak year for the cargo sector. It predicted air cargo volumes will fall further this year to 5.6 per cent below 2019 levels.
According to industry analysts, since late January of this year, global tonnage has declined nearly 10 per cent on a sequential basis and is down 26 per cent compared to the equivalent period a year ago, led by a 47 per cent drop in volume out of Asia.
As well, lower consumer spending due to high inflation and interest rates, along with excess retail inventories, have resulted in export manufacturing contraction in many industrialized countries and slowed trade growth.
Freight professionals also say an earlier Lunar New Year and COVID-19 outbreaks in China, along with consumer belt-tightening in North America and Europe, helped derail the typical rush in airfreight bookings to get goods moved before factories close for the holiday. The official holiday period is now over, but many factories are expected to be closed for weeks because sluggish orders and the infection wave make it unnecessary to reopen quickly.
However, if you look beyond China, things are showing glimmers of improvement for international seafood supply chains.
Although the global economy is expected to be weaker this year, economists are increasingly confident that many countries can narrowly miss a recession or that any contraction will be short and mild.
One area where airfreight business is holding up is the Europe-North America corridor, where volumes increased six per cent in January from the prior year.
The International Monetary Fund said the global economic outlook for 2023 is less bad than feared several months ago, with estimated growth of 2.7 per cent. Inflation appears to have peaked in the U.S. and Europe and consumer spending is still relatively strong, with U.S. joblessness at historically low levels and natural gas prices in Europe falling 80 per cent since August. The reopening of China after COVID-19 isolation should also, over time, bolster the global economy.
So, overall, there seems to be a break in the economic fog that has encompassed global supply chains and important export routes. As more and more traditional importers of Atlantic Canadian seafood continue to rally from the catastrophic impacts of the global pandemic, consumers in these countries will begin to get back to normal buying practices — including enjoying a feed or two of tasty lobster.
Of course, this improvement is not going to happen overnight. But with the improved cargo shipment infrastructure in this region, combined with our reputation for producing some of the best seafood in the world, the bounce back here, which has already started, is sure to outpace that of some international competitors and that can only bode well for both harvesters and processors in this region.