Canadian Shipping; Supply, Demand And Competition

Canadian Shipping; Supply, Demand And Competition

Canadian Shipping;
Demand, Supply and Competition

Executive Summary
Shipping or the carriage of goods by sea has played an important role in the economics of nations the world over. It has become an important link between nations creating a commercial relationship. Shipping is often the most economical way of transporting large quantities of goods over extended distances. Canada’s roots lie in the shipping trade but in 1949 when the Canadian government sold the last of the Canadian flagged ships our fleets have been limited to mostly domestic trade on the Great Lakes and coast lines. That isn’t to say that there is not still a large shipping industry in Canada. Foreign flagged ships plying our waters still require all manners of services.
The Chamber of Marine Commerce (2011) reports that every year the commercial marine industry here in Canada provides over $10 billion in economic activity, over 100,000 jobs, $117 billion in international trade and 97% of all non-U.S. international trade. The environmental advantages marine transportation will save congestion from thousands of trucks and save green house emissions from the previously mentioned trucks.
The factors that affect shipping are supply and demand which is one of the basic concepts of economics. Demand refers to how much of a product or service is required by buyers. Price is directly related to supply and demand. Although demand for our Canadian fleet has dwindled, shipping still plays a very pivotal role in our economy. Stats Canada (2011) has shown that the economic downturn in 2009 caused a drop in merchandised exports down 24.4% which resulted in a large change to the trade balance. We changed from a surplus of $45 billion in 2008 to a deficit of $4.7 billion in 2009. The global demand for merchandised exports dropped dramatically and affected our import/export economy greatly.
Canadian Shipping; Demand, Supply and Competition
Domestic shipping in Canada can be divided into three main...