Low water levels on St Lawrence River further raise shipping rates

To add to a global problem of spiralling shipping costs, falling water levels on the St Lawrence River in eastern Canada have caused marine shipping companies to impose additional fees on cargo, because the lower water levels reduce the maximum capacity of vessels carrying the cargo.

Hapag-Lloyd, MSC and CMA CGM were three of the carriers who have introduced low-water charges.

Wolfgang Schoch, Hapag-Lloyd managing director for Canada, said that if the demand was not there then it would be a different situation, but demand was currently high. “Demand is outstripping supply everywhere. For Hapag-Lloyd, all the ships we have are on the water somewhere in the world and it’s still not enough. It’s an extreme situation.”

Schoch explained that e ach fall of 10cm of water level in the St Lawrence channel meant that about 3,000mt had  to be removed from a freighter.

Hapag Lloyd said that it would apply a US$150 charge per 20ft container on two routes inbound to Montreal and warned it could increase that amount further. MSC said it would be charging an extra US$150 for every 20ft container and US$200 for every 40ft container on routes to Montreal from Northern Europe and five other points of origin. CMA CGM said that it would increase its existing low-water fees to US$150 on 20-footers and US$300 on 40-footers, from all origins except five in Asia.

Lake Ontario, the main source of water to the river, has seen its driest conditions since 1966 over the past 12 months, according to the International Lake Ontario-St.Lawrence River Board.