Exporters and shippers of live Canadian lobster are reporting a huge growth in the number of air cargo shipments to China, driven by the trade war between the United States and China.
The two countries have been dumping major tariffs on each other’s goods for weeks. Both the U.S. and China have tacked tariffs on about 5,000 goods coming from each other’s countries. Neither side seems prepared to back down either. Earlier this month, China announced a tariff hike on $60 billion worth of U.S. products.
All that fighting is proving to be a boon for the Nova Scotia lobster industry, which provides the lion’s share of the Canadian supply of live lobster. The steep tariffs on U.S. goods means Canadian lobster is a whole lot cheaper to buy in China than crustaceans from our American neighbours.
“Our market share is getting more and more for this July, August and September, much more than last year and the last couple of years,” said Yang Xue, general manager of Chinese-owned First Catch Fisheries, which now operates three charter flights a week carrying live lobster from Halifax to China.
Canadian exports to China immediately doubled
First Catch is part of a macro-economic event.
The first month China imposed a retaliatory 25 per cent tariff on lobster from the U.S., Canadian shipments nearly doubled compared to the year before.
Shipments to China went from 627,000 kilos in July, 2017 to over 1.25 million kilos in July 2018, according to Canadian government statistics. The value rose from $12 million to nearly $21 million.
Most of that is flown out of Halifax Stanfield International Airport on jumbo jets carrying about 80,000 kilograms of live lobster per trip.
‘Never imagined’ this much
“It’s pretty massive,” said Abbey MacDonald, operations manager at Flying Fresh Air Freight, a freight forwarding business. “We never would have imagined this amount of freight moving.”
This week, eight charter flights will carry live lobster – most of it from Nova Scotia – to Asia.
Six are direct flights to China. Two will go to Seoul.
The lift effort is extraordinary for late September – a time when the region has only one lobster fishery underway in the Northumberland Strait between New Brunswick and Prince Edward Island.
“Normally we have a lull in our workload at some point in the summer. This summer that lull never came,” MacDonald said.
Demand outstrips capacity Halifax airport
Shippers say Halifax is struggling to keep up with demand, with live lobster charters now being flown out of Moncton, N.B. The logistics hub in Halifax is also dispatching trucks to airports in Toronto and Montreal. Passenger aircraft also carry live lobster.
It’s still not enough, hence the chartered jumbo jets.
“I couldn’t even imagine what we could do if we had the capacity out of here,” said MacDonald. She credits Gateway Facilities, the company that does most of the ground handling for the freighters, with doing an exceptional job. “But there’s only so much space and so much runway for them to handle.”
Where is it all coming from?
Industry sources say live lobster inventories have been well drawn down by now.
There have been fears Maine lobster, which is effectively shut out of China, is being imported into Canada and then shipped out as Canadian lobster to avoid the Chinese tariffs.
It’s a concern expressed last week by Geoff Irvine, of the Lobster Council of Canada at a fishermen’s forum in Yarmouth, N.S.
“Some of our live shippers are worried it could erode the Canadian market. It would undercut our market advantage [in China] and the prices we have, and we don’t want that,” Irvine told CBC News.
Canadian lobster better quality than Maine
Yang Xue said Canadian hard shell lobster is clearly better than its soft shell counterparts from Maine.
The company added a charter to China after the tariff was imposed.
The key effect of the tariff, he sees. is to keep Maine lobster out of China and drive down price.
“The price is not being impacted by the U.S. lobster as last year and the year before. So what I see is Canadian lobster getting a better price and the only market.”