The terminal operator has joined a group of Nova Scotia business leaders and investment company Cyrus Capital Partners L.P. in plans to build 315-acre marine container terminal on the Strait of Canso.
Terminal operator SSA Marine has become an investor in Melford Atlantic Gateway, a planned container terminal in Nova Scotia.
Seattle-based SSA joins a group of Nova Scotia business leaders and the investment company Cyrus Capital Partners L.P. in seeking to build a 315-acre marine container terminal on the Strait of Canso, the waterway separating the Nova Scotia Peninsula from Cape Breton Island.
Planners of the Melford terminal, which has been promoted for about a decade, said it would be the closest North American port on the Great Circle Route to Europe and Asia via the Suez Canal and is being designed to accommodate ultra large container vessels.
With a sparse local population, it is envisioned nearly all the containers arriving at the terminal would be transferred to trains or feeder ships in Melford for delivery to their final destination, said Richie Mann, a former Nova Scotia minister of transportation, who is both an investor in Melford and spokesman for the project. There is potential for export cargo from Eastern Canada in the form of agricultural and forestry products as well as seafood.
SSA Conventional President Mark Knudsen said, “We have spent considerable effort over the years examining terminal opportunities on the East Coast of North America and we believe Melford, with its 20 meters of draft and the ability to reduce delivery time to US and Canadian markets by 2 to 6 days, via a local rail connection to the CN network, excellent workforce and private ownership combines all the beneficial attributes to quickly establish itself as the preeminent first port of call for North America.”
While the Melford terminal has been proposed for some time, he said SSA believes its time may be ripe because of the increasing size of vessels, alliance changes and the need for cost reductions by everybody in the industry.
Carriers might be able to pick up European cargo destined for the U.S. or Canada as they discharge Asian cargo in Europe or deliver cargo coming all the way from Asia to destinations in Eastern Canada or the Midwest.
Knudsen said the target is larger ships, as smaller ships serve Montreal quite well.
“But it is still a long-term deal,” he added. “It is a greenfield site, and there is at least two years of construction.” On top of that, there is additional design work and financing to arrange.
He said the decision to move forward with construction will depend on the partners assessment of the strength of the market.
“It is probably a little early to say whether we would build it on the market prospects or with a carrier commitment,” he said.
The terminal will eventually be able to have three berths, but construction would probably begin with building a single berth and a new rail link to connect the terminal with the Cape Breton and Central Nova Scotia Railway (part of Genesee and Wyoming), the short line that would connect the terminal with the Canadian National Railway. That would cost about $200 million plus or minus $50 million, he said. The cost of the terminal would depend, in part, on how many rail tracks were built on the terminal and whether the developers created fill for three berths and just paved one or just filled and paved one berth.
“We are part of the partnership that will be the terminal owner,” Knudsen said. “We also will be the terminal operator when the terminal opens. As part of the partnership we bring our expertise.
The terminal would be designed in collaboration with the railroads and steamship lines in order to assure that what is built and designed best matches the needs of the industry, he said.
Knudsen also added it would probably start out as a conventional terminal and that automation might be added as needed. “We see it as fairly simple, straightforward operation and we think we can do that with conventional equipment and operations,” he said. “We certainly would not exclude the ability to go to robotics later on, but the cost of starting off with a fully automated, robotic terminal is not justified in this case.”
The terminal is seen by many as an East Coast version of Prince Rupert, the British Columbia port that transships nearly all of its containerized imports by rail to the U.S. Midwest or Eastern Canada.
The comparison is particularly apt because the original operator and developer of Prince Rupert, Maher Terminals, also planned to be the operator of Melford. The project was actually known for years as the Maher Melford Terminal.
However, the Maher family sold its business, which is primarily the largest terminal in the Port of New York and New Jersey, to a Deutsche Bank investment fund in 2007. Last year, Deutsche Bank agreed to sell Maher’s Prince Rupert business to DP World, and just this April Deutsche Bank greed to sell the Maher terminal in Elizabeth, N.J. to a Macquarie Infrastructure Partners fund.
Mann said having SSA as a partner, a stevedoring company that has worked with many different shipping companies around the world, should help open doors for the Melford partners as they seek to find a liner company interested in making the Melford a port of call.
SSA Marine becomes investor in planned Canadian container terminal
