Eastern Canada ports map growth strategy

As in other regions of the world, cargo patterns at ports in Eastern Canada, from the tip of the Great Lakes to the Atlantic Coast, are determined by prevailing and anticipated economic conditions at home and at leading trading partners. The overall impact remains limited from such geopolitical developments as the deepening crisis between Russia and Ukraine and the intensifying strife in the Middle East. The biggest current negative element for Canadian trade is this August’s Russian ban on imported food, which could cost Canadian pork producers some C$500 million in lost exports.

Otherwise, it’s mainly good news as the US economy is continuing to gather strength, though forecasts have been revised downwards to settle at under 2%. According to its latest world outlook, the International Monetary Fund predicted that Canada’s economy will advance by 2.2% this year and by 2.4% in 2015. Among the G7 nations, only Britain and the US will outstrip Canada next year, at 2.7% growth and 3% respectively. Signs of steady recovery are rising in the European Union, where Germany’s GDP is projected to grow by 1.9% this year and France by 0.7%. Amidst a less optimistic outlook for several emerging markets, the global economy is seen by the IMF as climbing by 3.4% this year, down from an earlier prediction of 3.6%. Despite some cooling down, China remains the fastest-growing economy at a current pace close to 7%. Robust Activity at Port of Montreal At the Port of Montreal, the strong expansion in recent years of Asia and emerging markets has generated a significant diversification in the business strategy of Canada’s top container gateway on the East Coast. The process was already in progress a decade ago. In 2000, nearly four-fifths of  Montreal’s container traffic came through Northern Europe. By 2013, this market accounted for only 44%, while Asia accounted for 14% and the Middle East 8%. Montreal port officials consider that with goods transshipped from mega vessels to smaller ships, via the Suez Canal, the Port of Montreal has become an alternative to West Coast ports for reaching the Pacific Basin. Last year, Montreal handled a total of 28 million metric tons of cargo and 1,345,810 TEUs (slightly above 2012). “ We are seeing solid growth in 2014, with total tonnage up 3% and container cargo up 4.3% at 611,720 TEUs in the period to end June,” indicated Tony Boemi, vice-president of growth and development for the Montreal Port Authority. “There’s a big jump in Mediterranean, Latin America and US Midwest shipments,” he told AJOT. “The European market is showing good signs of recovery.” Buttressing cargo activity was 2013’s record investment of C$55 million – notably used to boost container capacity by 13% and to redevelop an area of the petroleum products sector to be able to accommodate larger vessels. An important development, too, for the competitiveness of the Port of Montreal was the announcement in May by Montreal Gateway Terminals Partnership (MGT), the biggest cargo container operator at the port, and Navis, based in Oakland, CA. They announced the successful implementation of the Navis N4 terminal operating system at MGT. The new system, a global technology standard for managing cargo movement, helps MGT to optimize terminal productivity and empower further enhancement of service delivery, reinforcing its position as a leader in the industry. The implementation was a migration from Navis’s legacy software SPARCS and an internally developed data host system to N4, Navis’s latest generation terminal operating system. N4 allows customers to run their operations from a single terminal to multiple terminals spanning numerous geographic locations managed from one central location. Navis is part of Cargotec Corporation. “MGT’s migration to N4 demonstrates our focus on providing customers with the highest level of service,” says MGT chief executive Michael Fratianni. Another development of note was the decision by CanEst Transit Inc. to establish on port territory this year a facility specializing in the containerization of agricultural products destined for local and international markets. This is regarded as an added asset for increased maritime trade with Europe under a Canada-European free trade agreement (CETA) expected to be implemented by 2016 if the complex ratification process proceeds without undue delays. Intermodal Horizon for Port of Valleyfield Some 40 miles west of Montreal on the St. Lawrence waterway, Valport Marine Services and the expanding multimodal port of Valleyfield have emerged as a regional hub worth watching closely. What is described locally as Canada’s “largest small port” is well known as the chief staging ground for Canadian Arctic sealift services, also handling project cargo, general cargo, and liquid and dry bulk. Last year, cargo throughput at Valleyfield jumped by 15% to attain nearly one million tons. Instrumental in this growth has been recent direct access to new Autoroute 30 in addition to the existing CN, Canadian Pacific, and CSX rail networks stretching to many US markets. But the game-changer for the future will be the $100 million investment by US rail carrier CSX in an intermodal terminal slated to go on stream in October. Moreover, recent industry reports have identified Valleyfield as a potential port of call for the Cleveland-Europe Express container service launched this past spring. On the north shore of the St. Lawrence River, the Port of Sept-Iles is North America’s largest iron ore port, handling close to 28 million tons of cargo in 2013. In the first seven months of 2014, it handled 14.4 million tons – just slightly below the corresponding traffic level on 2013. Other St. Lawrence Ports Sept-Iles is destined for bigger things when a $220 million deep-water, multi-user terminal under construction is completed. The latter project is now expected to be finished by the end of this year following some delays. It will play a critical role in  shipping large volumes of iron ore to Asian markets in particular that could spur total port tonnage to a much higher summit. Worth recalling is the fact that in July of last year, Sept-Iles was the first port on the continent to handle a giant Chinamax bulk carrier. It loaded 300,000 tons of iron ore destined for a Chinese steelmaker. Assuming all planned mining projects in the Labrador Trough were carried through, port president and ceo Pierre Gagnon even suggested a few years ago that Sept-Iles annual cargo volume could approach 100 million metric tons within a decade. But due to financing issues and shifting global commodity trends, several projects have lately been scaled down. The Port of Quebec, which handled 27 million tons of mainly bulk cargo in 2013, invested approximately C$55 million with its partners in infrastructure improvements last year. And a similar amount is earmarked for this year. This fall, wood pellets, for the first time, will begin arriving by rail for transshipment to markets. Halifax & Saint John The Port of Halifax in 2013 posted a 9.3% decline in total cargo to 8.6 million metric tons as a result of fewer bulk cargo shipments and more rail shipments of agricultural products. Containerized tonnage was up 8.6%. Impacted, possibly more than other Canadian east coast ports, by the severe winter conditions affecting vessel schedules and intermodal services, the cargo numbers for the first six months of 2014 showed an 8% drop in TEUs to 206,125 units and a 14% decline in total volume at 3.9 million tons. However, port spokesman Lane Farguson stressed that with various infrastructure projects reaching completion, the Port of Halifax was “well-positioned” to take advantage in the future of the Canada-European free trade deal and multi-billion, Atlantic region mega energy projects. The CMA CGM group also this spring doubled its capacity out of Halifax for perishable cargoes. The Port of Saint John, NB handled 27.7 million metric tons of cargo in 2013 which proved to be a strong year for container throughput increasing by 60%. The upward container trend continued in the first six months of 2014, totaling nearly 45,000 TEUs, thanks to increased calls by Mediterranean Shipping Company and the north-south operations of longtime stakeholder Tropical Shipping.  Great Lakes/Seaway Highlights The harshest winter conditions in several decades had a severe impact on the Great Lakes/St.Lawrence Seaway System, except for grain which has been increasing dramatically since the Seaway opened in late March. According to Canada’s St. Lawrence Seaway Management Corporation, total traffic was down close to 4% but grain traffic had soared by 55% in the period to end July to more than 4 million metric tons. General cargo increased by 60% to 1.2 million tons versus a year ago. On the other hand, iron ore was down by 36%. On the tip of Lake Superior, the grain shipments at the Port of Thunder Bay were up 35% year-to-date at the end of June. A surge in calls by domestic and ocean vessels is clearing a huge grain backlog in the wake of the record harvest of 2013. The decline in iron ore cargo especially affects the Port of Hamilton, Canada’s largest on the Great Lakes. Traditionally dependent on the local steel industry, Hamilton handled some 10 million tons of total cargo in 2013. A bright spot was agricultural commodities doubling to 10% of overall output. And looking ahead at the 2014 outlook, port chief executive Bruce Wood is optimistic about demand from Ontario’s big manufacturing sector as the port continues to diversify its cargo mix and to increase capacity for agro-food goods.