The Port of Montreal has plans for a new terminal in Contrecoeur, while DP World signed a lease in July to expand and operate the Rodney container terminal in Saint John, and new container terminals are proposed in Melford and Sydney.
Port of Montreal’s Maisonneuve terminal
Source: Port of Montreal
Container traffic moving in and out of Eastern Canada is predominantly handled by the ports of Montreal, Halifax, and Saint John, New Brunswick. In addition, new container terminals are proposed in Melford and Sydney, Nova Scotia, but with the shipping industry in the doldrums, it’s unclear whether the ambitions of those new port developers will be achieved, at least anytime soon.
Montreal. By far the largest of the Eastern Canadian seaports, Montreal handled 1,446,075 TEUs in 2015 compared with 418,359 TEUs at Halifax and 97,119 TEUs at Saint John, according to figures from the American Association of Port Authorities. Traffic at those three ports was up about 3 percent, 5 percent and 8 percent, respectively, compared with 2014.
By weight, containerized cargo amounted to 13.1 million metric tons of Montreal’s 32 million tons in 2015, while liquid bulk accounted for about 10 million tons, dry bulk 8.7 million tons, and breakbulk 225,189 tons.
Tony Boemi, vice president of growth and development at the Port of Montreal, said container volumes are expected to be flat in 2016. Throughput at the port was down 2.2 percent year-over-year through July 31.
But officials expect total volumes to be lifted by growth in the grain and petroleum segments. Grain producers are having a record harvest, and Boemi said an Enbridge pipeline was reversed to bring crude oil from Sarnia, Ontario to Montreal that is then loaded on tankers. That oil is taken to Lévis, on the south bank of the St. Lawrence River across from Quebec City.
With terminals nearing capacity, the port has undertaken a major expansion, increasing container capacity at Tremont Terminals from 550,000 TEUs to over 1.1 million TEUs, by adding about 600,000 TEUs capacity at Viau. By the end of this year, 350,000 TEUs of capacity will be added, and the remaining 250,000 TEUs is scheduled for completion at the end of 2017.
The port is also moving forward with plans to build a new terminal in Contrecoeur, located on the south bank of the St. Lawrence, about 25 miles downriver from its existing facilities. The port purchased that land, which is currently being used as a bulk terminal, 30 years ago.
Boemi said it could eventually handle about 3 million TEUs annually, but that the plan is to develop it in stages, the first phase being a 1.1 million-TEU terminal. He noted such projects usually take eight to 10 years to realize. The port is in year five and nearing completion of an environmental review.
“Then it’s really a question of going out publicly and making our case in terms of that this opportunity exists and, of course, looking for a business partner and so on,” he said.
Today the ships that call Montreal mostly have a capacity of between 3,500 TEUs and 4,000 TEUs, but Boemi said the government has given permission for post-Panamax vessels to call the port and the goal is to attract ships up to 6,000 TEUs. He said work is being done with electronic navigation to give ships a better reading of the river bed.
“We are not there yet, I’d say we can probably bring in the 4,800 to 5,000-TEU ships,” but they would have to load at about 15 percent below capacity, said Boemi. While they are smaller than many of the ships in other transatlantic strings, most of the vessels calling Montreal discharge all their cargo.
Services calling Montreal originate primarily in North Europe, the Mediterranean, and Caribbean, but about 18 percent of Montreal cargo is from Asia and 7 percent is from Latin America.
“These are very new markets for us that really didn’t exist for Montreal, let’s say as recently as 8 or 9 years ago, and all this is as the result of transshipment ports,” said Boemi. Cargo from Latin America is transshipped through Freeport, Bahamas and Asian cargo gets transshipped through the Mediterranean or Freeport.
The port has 40 million consumers reachable in eight hours of trucking, 110 million that can be reached in the U.S. and Canada by truck or the Canadian National and Canadian Pacific railways.
About 45 percent of the cargo moves in and out of the port by rail, and the split is about equal between the CP and CN. CSX has also opened a new intermodal terminal in Salaberry-de-Valleyfield, outside of Montreal.
Halifax. Nova Scotia’s port saw volumes in the first half of 2016 shoot up 19.6 percent from the previous year, though Port of Halifax spokesman Lane Farguson notes the comparison is partly due the fact that Northeast Canada and U.S. was hammered by storms in the first quarter of 2015, depressing volumes.
Currency exchange rates have been favorable for cargo, and he said “terminal operators here in Halifax, the CN, and labor have been doing an excellent job of demonstrating our supply chain value.” The port is served exclusively by CN, and about 70 percent of containers move in and out of the port by rail, with nearly all the rest by truck and a very small number on feeder ships, according to Farguson.
In the past decade, the port has invested about $250 million on projects such as lengthening and deepening berths, upgrading truck gates, and cargo marshalling areas.
“We have put a lot of focus and effort into preparing for the arrival of large vessels, and now, ultra-large ships,” said Farguson. “A little over a year ago we began seeing over 8,000-TEU ships calling Halifax…now we are seeing vessels in the 9,400-TEU range and we are getting ready for 10,000-TEU-plus.”
Both the Ocean3 and G6 alliances are operating large ships to Halifax from Asia via the Suez Canal, and Farguson said the port could eventually handle 12,000-TEU vessels.
In 2015, 49 percent of the port’s traffic moved to and from Asia, 38 percent with Europe, and most of the remainder with Caribbean ports.
The South End Container Terminal operated by Halterm does not have any air draft restrictions, but while ships calling the Fairview Cove Container Terminal operated by Ceres must pass under both the Angus L. MacDonald and A. Murray MacKay bridges, big ships can also call there by taking advantage of lower tides. Farguson noted the MacDonald bridge is being redecked, increasing the roadbed height, and both bridges are equipped with sensors to help ships determine clearance.
About $64 million was spent on improvements to the Richmond terminal, which handles breakbulk cargo and expects to benefit from increased work at the nearby Irving shipyard, where the next generation of Canadian warships is being built.
Saint John. This July, DP World signed a lease to expand and operate the Rodney container terminal in Saint John, New Brunswick, beginning on Jan. 1, 2017, with the lease continuing through 2051.
When a four-year expansion is completed, the port will have a 350-meter berth able to accommodate ships up to about 8,500 TEUs, said Matthew Hoag, operations and commercial director, Americas region for DP World. The company purchased two post-Panamax cranes from the Port of Charleston for the expansion.
Currently Saint John is served by smaller ships operated by Tropical Shipping and MSC with capacities ranging from about 1,100 to 3,000 TEUs, and Hoag said the goal will be for the port to attract new services, possibly from Europe and Latin America.
“We’re talking to lots of different carriers about the opportunities in Saint John and why it could be a good alternative to New York, Boston, and Halifax,” he said.
He believes the port is attractive because it is served by both CP and CN, and also has good access to New England. Exports from the Northeast Canada that might find Saint John attractive include forest products, potatoes, other vegetables, and even Saint John’s hometown brew, Moosehead Beer.
Meanwhile, two proposed greenfield terminals in Nova Scotia also announced new partners in the past year.
Sydney. The Harbor Port Development Partners in Sydney, Nova Scotia announced last December it had partnered with China Communications Construction Co. on its NovaPorte project, formerly known as Sydport.
Albert Barbusci, chief executive officer of NovaPorte, said it is “engaged with three or four carriers and operators,” and developers are “hoping to put a shovel in the ground in 2017.”
A commitment by carriers to move 250,000 TEUs annually through the port could green-light the first phase.
Barbusci said he believes the shipping industry is “close to having seen the bottom, and if we can see some of these rates increase or level off again, I think there’ll be some renewed interest.”
The port is looking to entice ultra-large container ships transiting the Suez Canal to extend Asia-Europe services across the Atlantic to Sydney, where cargo could be railed to the Midwest and Ohio Valley, or transloaded onto feeder ships to reach ports such as Montreal, Boston, New York, and Norfolk.
“We’ve designed this facility to be a semi-automated state-of-the-art next generation type facility,” he said.
The port is served by the Cape Breton & Nova Scotia Railway (CB&NS), a subsidiary of Genesee & Wyoming, which comes within a quarter mile of the proposed container terminal. CB&NS connects with the CN in Truro, Nova Scotia.
Located on the East Coast of Cape Breton Island, Sydney has naturally deep water, but Barbusci said developers plan to dredge an additional two feet—to 60 feet—so that ships of 16,000 TEUs to 22,000 TEUs can be accommodated.
The recent drop in oil prices means fuel has fallen from about a third of the operating cost of ships to between 20 percent and 22 percent, and if oil prices rebound, NovaPorte could become “extremely viable,” he said.
“Why would you want to have two, three, four direct calls when we can bring one across the pond?”
Developers hope the terminal and an adjacent 1,200-acre logistics park could help revitalize the economy around Sydney, which was once heavily dependent on the coal and steel industries.
Melford. Just this July, Seattle-based SSA Marine joined a group of Nova Scotia business leaders and Cyrus Capital Partners as an investor in the long-planned Melford International Terminal, a 315-acre container facility near Port Hawkesbury on the Strait of Canso, the waterway separating Cape Breton Island from the rest of Nova Scotia.
Mark Knudsen, the president of SSA Conventional, said the company is “working hard on the design and operating plan, and then coordinating with the railroad so we’ve got a good functional plan to be out approaching the commercial market with.” A spur of about 15 kilometers would have to be extended from the CB&NS to the new terminal. Like cargo moving from Sydney, shipments would transfer to the CN in Truro.
Knudsen says he recognizes the shipping industry is in turmoil, but with ship sizes increasing, “we think this is going to be a good opportunity for an economic gateway into Eastern Canada and the Midwest,” adding that Melford is a “greenfield project with a fair amount of risk, and we will be looking at ways to de-risk.”
While Sydney, Melford and Halifax all have the same basic geography, and similar ambitions to attract big ships from the Far East and move it by rail to population centers such as Quebec, Ontario, and the U.S. Midwest, he still thinks Melford has an edge over Sydney because of its location further to the west and an edge over Halifax because it is less congested and has room to handle large intermodal trains.
“Low cost and high efficiency are going to be the key,” said Knudsen. “From our point of view the Melford site has that advantage over the other guys.”
Jean-Paul Rodrique, a professor at Hofstra University and author of The Geography of Transport Systems, is skeptical of the efforts to develop new ports in the current low growth environment for shipping.
“Any transshipment activity will come at the expense of Halifax,” he said. “It’s a zero sum game. You ask yourself, why not Halifax,” instead of these other locations?
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Chris Dupin is Maritime and Intermodal Editor of American Shipper. He can be reached by email at cdupin@shippers.com.