BY THE NUMBERS
Ports encouraged to adapt to next trade era
Danielle Goldfarb, Director of the Conference Board of Canada's
Global Commerce Centre
The next trade era will be characterized by slower emerging market growth and innovative services, and Canada and its ports will need to examine different strategies in order to adapt.
This is what Danielle Goldfarb, Director of the Conference Board of Canada’s Global Commerce Centre, told the ACPA Annual Conference.
Canada will need to leverage U.S. markets and new markets. “It’s no longer about just the U.S. It’s no longer about just Asia,” Ms. Goldfarb said during a panel session entitled Growing the Pie: Strategies to Expand Maritime Trade in Canada. “We really have to be looking at where all the opportunities are across the world and picking our spots carefully. Canada has things that the world needs but we still haven’t fully tapped into the demand that is out there.”
In fact, demand will be more important than the state of the Canadian dollar in the next trade era. “Our research shows that the future driver of trade is going to be what’s happening with demand in different parts of the world and in different industries and will have less to do with the dollar,” Ms. Goldfarb said.
Canada also will need to look beyond natural resources for growth. “Demand in emerging markets has driven a lot of interest in Canada’s commodities,” Ms. Goldfarb said. “We’re not going to see that kind of demand to the same extent. We expect that to be a longer-term trend and we need to adapt to that reality. We can no longer ride the commodity super-cycle in Canada.”
Ms. Goldfarb encouraged ports to be technology leaders in order to boost their role in the global value chain. “Ports do not just ship products,” she said. “You are providers of high-level services and expertise, and you have the capacity to use technology and expertise to your advantage to make sure you are offering high value to the supply chain.”
Moreover, ports need to export their expertise and technology and leverage knowledge. “What is really going to drive the next trade era is people who are going to be able to take advantage of expertise and knowledge and provide high-value services. They are going to be able to trade more efficiently and effectively with each other,” Ms. Goldfarb said. “Companies typically selling products or being part of a product supply chain are actually now selling services and solutions. That’s a key part of their portfolio. It makes them much more stable and resilient.
“The tremendous expertise, technology and high-value services that ports and service providers to the ports have are actually exportable. These are things you can sell elsewhere.”
Ms. Goldfarb said ports need to develop their expertise in data analytics to “improve efficiency, timeliness and make sure we’re resilient,” and turn feedback into innovative services and practices. “There has to be an emphasis on innovation,” she said. “We interview a lot of companies. The most successful companies are always the ones that tell us that they have a relentless focus on customer feedback and turn that feedback into innovative new products and services. That advice applies to ports as well.”
Ms. Goldfarb said ports also should anticipate disruptive innovation, such as driverless trucks, and prepare to convert it into opportunities.
Moving forward, Ms. Goldfarb said that Canada needs to prepare for different growth in different regions of the world. Among Canada’s traditional trading partners, Japan and the Eurozone will experience weak growth (although there will be opportunities in different parts of Europe as the Comprehensive Economic and Trade Agreement – CETA – comes into play). The U.S. will see better economic growth than Canada, and Asia will still experience strong growth.
Emerging markets, meanwhile, are fast growing but cooling off a bit. “If you look further out, what is really apparent is that the emerging market growth that we’ve come to appreciate as really driving Canadian trade and global trade is going to be slowing down from the heights it achieved recently,” Ms. Goldfarb said.
Canada will need to look in particular at the opportunities that the ground-breaking CETA and Trans-Pacific Partnership (TPP) free-trade deals will bring. Some industries will see very important gains from the CETA tariff elimination immediately, Ms. Goldfarb said.