Canadian ports maintain growth amidst challenging trends

By: | Issue #656 | at 07:57 AM | Channel(s): Ports & Terminals  Ports  

With Canada’s economy growing, the nation’s ports are expanding to keep pace.

DP World’s completed expansion of Fairview Container Terminal has significantly boosted box capacity at the Port of Prince Rupert. (photo: Prince Rupert Port Authority)
DP World’s completed expansion of Fairview Container Terminal has significantly boosted box capacity at the Port of Prince Rupert. (photo: Prince Rupert Port Authority)

Ocean shipping lines continue to grapple with low freight rates and overcapacity, but Canadian port officials note the outlook remains positive for international trade as economic trends improve or remain robust in Europe and Asia. Against this background, managers of key Canadian ports are charting strategic plans for the future while recording rising cargo numbers. They are investing in new infrastructures to enhance competitiveness, to meet rising demand and generally to deliver sustainable growth. And the positive trend is continuing in 2017, aided by more stable commodity prices.
Moreover, what is no longer an open secret is the fact that current indicators show Canada leading the industrialized states in economic growth, despite some persistent risk elements such as the potential impact of a stronger Canadian dollar on exports. Some analysts consider that the energy sector has largely adjusted to lower oil prices. There has been an uptick in business investment.

In its latest global forecast, the International Monetary Fund (IMF) says Canada’s economic growth will outpace the United States and lead the G7 this year thanks especially to “buoyant consumer demand.”

The IMF sees Canada’s GDP advancing by 2.5% in 2017, up 0.6 percentage points from its April forecast. In 2018, growth could slow down to around 2% on expectations that interest rate hikes will dampen housing and debt-financed consumer spending. Impressively enough, latest statistics show the Canadian economy growing at a blistering 4.5% pace in the second quarter of this year, blowing past the most bullish estimates.

East Coast Ports

Among gateways on the East Coast, the Port of Montreal handled a record volume of goods in 2016 - 35.4 million metric tons, representing a 10.4% increase. Celebrating its 50th anniversary of container shipping this year, Montreal handled 1.45 million TEUs in 2016.

Tony Boemi, Vice-President Growth and Development, reported that another banner year was in progress in 2017, with total tonnage recently up by 12.4% and container traffic up by nearly 11% - “largely attributed to the Mediterranean services.”

The Port of Montreal’s strategic position is attracting new services seeking to benefit from the Canada-European Union free trade agreement.
The Port of Montreal’s strategic position is attracting new services seeking to benefit from the Canada-European Union free trade agreement.

In this connection, Maersk Line announced that as of September 30 it will launch a new shipping route between the Mediterranean region and Montreal – an initiative welcomed by Canada’s second largest port ahead of the coming into force on September 21 of the free trade agreement (CETA) between Canada and the European Union. The service is a slot purchase agreement on the existing MED-Canada service. Sylvie Vachon, president and CEO of the Montreal Port Authority, stated: “Thanks to this additional route, the MPA will improve its service offering to Canadian and U.S. Northeast and Midwest companies.”

Otherwise, sharply-rising Asia-related business is complementing the port’s traditional strong position in the North Atlantic trade. Last year, container volumes between Montreal, Asia, the Med and the Middle East accounted for half of total box traffic.

The new Viau international container terminal inaugurated in 2016 will increase Montreal’s total handling capacity to 2.1 million TEUs upon completion.

To increase port productivity and competitiveness, the Government of Quebec this spring announced funding of C$40 million to upgrade infrastructures at the Port of Montreal. Shippers stand to benefit from gains in terminal capacity and fluidity in movements.

For the Port of Halifax, strong tailwinds since last year have been driving container cargo recovery. Year-over-year containerized cargo growth in 2016 came in at 15% with over 480,000 TEUs and the forward momentum was continuing in the first half of 2017 with container traffic up 17%. A recent highlight was the visit in June of the 10,062-TEU Zim Antwerp, the biggest containership to date to call at the Nova Scotia port.

Halifax Port Authority president & CEO Karen Oldfield comments: “New services and expanded services are contributing to cargo growth through Halifax and we are working shoulder-to-shoulder with our stakeholders to build on that positive momentum.”

The Zim Antwerp is the biggest containership to call at the Port of Halifax. (Photo by Steve Farmer)
The Zim Antwerp is the biggest containership to call at the Port of Halifax. (Photo by Steve Farmer)

As for infrastructure developments, last year and this year focused on long term master planning with aggressive timelines to ready Halifax for the next 15 years and beyond. The master plan aims to prepare for the arrival of ‘ultra-class’ containerized vessels of over 10,000 TEUs, large scale industrial mega projects and how the Halifax Seaport District can complement the urban growth and revitalization currently underway in downtown Halifax and Dartmouth. The HPA is working with partners including Halifax Regional Municipality and CN to identify alternative ways of reducing container truck traffic downtown. At the Port of Saint John, New Brunswick, construction of the $205 million West Side Modernization Project for the port’s container terminal will soon become a reality. The coming years are expected to see a marked increase in container activity beyond the current level of under 100,000 TEUs, with CMA-CGM and Saudi Arabia’s Bahri recently joining MSC on the Bay of Fundy port’s shipping roster.

West Coast Ports Map Expansion Plans

With continued strong growth anticipated in maritime trade with Asia, ports in British Columbia are jockeying for position to increase market share. Various projects are underway or on the radar screen for capacity expansions in such key sectors as container and breakbulk facilities.

The Vancouver Fraser Port Authority recently reported that overall volume at Canada’s largest port in 2016 decreased slightly to 136 million metric tons of total cargo. There was a small drop in container cargo to under 3 million TEUs. But the trend is definitely on the upswing this year, with trade to the end of June climbing by 4% to 69 million tons sparked by mid-year records in containers and bulk grain. Container throughput in the first six months surged by 9.6% to a record 1.6 million TEUs – attributed to a strengthening economy as well as global demand for Canadian products shipped in containers.

“The long-term outlook for Canadian trade is one of growth and the Port of Vancouver is working hard to ensure we will be ready to handle increased volumes through Canada’s West Coast,” commented Robin Silvester, president and CEO of the Vancouver Fraser Port Authority.

In this regard, the Port of Vancouver regards Terminal 2 as a critical undertaking in order to compete for market share with other West Coast ports, including US ports, to accommodate the mega box ships now being deployed on the Transpacific trades with Asia. A three-berth terminal at Roberts Bank would add 2.4 million TEUs to the capacity of Canada’s largest port. However, one environmental lobby group especially, called Against Port Expansion in the Fraser Estuary (APE), has opposed the project vigorously on the grounds of severe potential damage to the area’s unique marine ecosystem encompassing some half a million birds passing through.

The port’s environmental assessment statement comprises numerous mitigation measures. A federal government-appointed independent three-member panel is expected to produce a report this fall.

Prince Rupert Continues Rapid Rise

Since undergoing major transformation and revival in the past decade, the long-dormant and bulk-oriented Port of Prince Rupert has arguably become the fast-growing container port on the continent.

Earlier this year, Don Krusel, president and CEO, made this prediction: “Today, we are the third largest container port in the country and before the next 10 years, we will overtake Montreal as the second largest container port in the country.”

In 2016, Prince Rupert handled 736,000 TEUs, roughly half of Montreal’s throughput, and total cargo of 19 million tons.

Last December, the port and DP World announced a significant milestone in the ongoing expansion of Fairview Container Terminal. Phase ll of the C$300 million project is now complete following the arrival this past spring of three Malacca-max dock gantry cranes. This has boosted annual capacity from 850,000 TEUs to 1.35 million TEUs. Eventually, the terminal served by CN’s network reaching major markets in Canada and the United States is designed to handle 2.5 million TEUs.

In another major initiative, this spring, the Port of Prince Rupert announced an expansion project for containerized cargo on Ridley Island that will help crops from the Canadian agricultural industry reach international markets while broadening intermodal logistics capacities. Ray-Mont Logistics is also developing an integrated logistics and container loading operation – slated for completion this coming fall - at the south end of the Ridley Island Industrial Site on the recently-constructed Road, Rail and Utility Corridor.

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American Journal of Transportation