With the possibility of a free trade agreement with Europe on the horizon, the Port of Montreal is preparing for future growth.
With its strong emphasis on general cargo, the Port of Montreal has managed to be largely shielded from the plunge in global commodity markets that has sharply hit such bulk-dominant St. Lawrence River ports as Quebec and Sept-Iles. Indeed, Montreal has gained traction, surging to second place among Canadian ports after Vancouver for total cargo and maintaining its market share with NY/NJ and other competing U.S. East Coast ports for North Atlantic container business. In this regard, Tony Boemi, vice-president, growth and development of the Montreal Port Authority, notes that Montreal posted record performances for total and container traffic in 2015.
The port completed 2015 with 32 million metric tons of cargo, an increase of 5.2% over the previous year.
“Specifically, we saw an increase of 4.1% in container tonnage, 7.8% in liquid bulk, 4% for dry bulk, including grain.
“We continue to attract cargo from emerging markets, specifically Asia and Latin America, which accounted for 17% and 5% respectively of the port’s total throughput of 1.45 million TEUs.”
According to Boemi, this pattern “is the result of business models which carriers are now employing with the mega vessels. It has been very challenging for ports on both coasts to handle the large vessels without service disruptions. This is in part causing carriers to transload containers at transshipment hubs and offering direct sailings to Montreal.”
Known for its fluid operation, excellent intermodal links and geographic location in proximity to major consumer markets in North America, Boemi points out that 17% of the total container cargo transiting through Montreal is for the U.S. Midwest market.
Similarly bullish was Michael Fratianni, chief executive of Montreal Gateway Terminals Partnership (MGT). The largest terminal operator at the port with its Racine and Cast container facilities, MGT recently adopted a new operating software system to optimize efficiency, heighten security and enhance customer service. “Despite the threatening undercurrents and the transformational cycle our industry is in, given our strategic geographical location, the consistency, predictability and reliability of our services and our congestion-free facilities, we remain optimistic regarding growth in 2016,” Fratianni told AJOT.
“On March 5th,” he recalled, “MGT marked its first year under a new local ownership group (Fiera Axium Infrastructure) that is engaged in growing and investing in the business to make certain we take advantage of opportunities and sustain our efficient operation. As a truly independent (no carrier ownership), common-user container terminal, we remain committed to adding value to the supply chain and maintaining our leadership position in the area of service by continued collaboration with all stakeholders.”
Free Trade with Europe on Horizon
Fratianni also reiterated the favorable views of many stakeholders at the Port of Montreal on the potential benefits of a free trade agreement between Canada and the European union. The ratification process of the accord had been delayed pending a compromise on the sensitive investment-state regime issue. The two sides found a compromise in late February, paving the way for implementation next year.
“Most analysts will agree that the Canada-European Union Comprehensive Economic and Trade Agreement will be net positive on jobs and trade, and both are fundamental to sustained growth in our industry,” said Fratianni. “Our natural deep inland location and superior hinterland connections auger well for us to capitalize on the increased trade when the remaining tariffs between Canada and the EU, with its 500 million plus people and colossal annual economic activity are further reduced and eliminated.”
Meanwhile, with the inauguration in 2014 of the CanEst Transit facility (for containerizing agricultural products), modernization of Logistec’s Contrecoeur terminal last year and the federal government’s $43.7 million allocation for the Viau container terminal project, the Port of Montreal is certainly in an expansion mode.
Commissioning of the Viau terminal (expanding the existing Termont terminal of Logistec) will boost Montreal’s total container capacity to 2.1 million TEUs upon completion. The project has prompted the initiation of an eighth international container service with MSC between Montreal and the Mediterranean. Hapag-Lloyd has added a fourth vessel on the AT2 service linking Montreal to North Europe.
“These added capacities promise growth for our containerized sector,” stressed Sylvie Vachon, president and CEO of the Montreal Port Authority.
Another significant development has been the ambitious C$5 billion Maritime Strategy launched in June 2015 by the Quebec government, a key goal being to build up Montreal as a continental gateway of choice for North Atlantic trade.
In this regard, the Port of Montreal welcomed the Quebec government’s recent announcement of a C$300 million investment in the development of industrial port areas throughout the province.
As Greater Montreal’s freight transportation hub, the Port of Montreal plans to fully participate in this undertaking (still awaiting details), alongside its many partners, such as CargoM, the logistics and transportation cluster created at the end of 2012.