Rivalry heating up for Nova Scotia mega box terminal

By: | Issue #646 | at 08:43 AM | Channel(s): Ports & Terminals  Terminals  

The 9365-TEU CGM CMA Tage is the largest vessel to have called at Halterm terminal the Port of Halifax. (Photo: Steve Farmer)
The 9365-TEU CGM CMA Tage is the largest vessel to have called at Halterm terminal the Port of Halifax. (Photo: Steve Farmer)

With carrier consolidations and alliances heralding still-larger containerships coming to the East Coast of North America, the Port of Halifax has entered the fray in a serious way amidst rival bids in recent years for a mega terminal in Nova Scotia.
Since late last year, the port operating at half-capacity with box throughput of under 500,000 TEU has embarked on the elaboration of a master plan with a 10-year time frame aimed at preparing for the anticipated arrival of vessels in the over-10,000 TEU category. The port has been working with partners, including CN Railway and the Halifax Regional Municipality, to identify alternative means of reducing the volume of container truck traffic in downtown Halifax. Adding to the urgency of the exercise have been the efforts of such East Coast ports as NY/NJ, Savannah and Norfolk to be ready for the behemoth box ships.

Master Plan

“Hopefully, our master plan will be released within a matter of months following the discussions with the primary port users,” Lane Farguson, spokesperson for the Halifax Port Authority, told the American Journal of Transportation. “A key objective would be a terminal capable of handling two mega containerships simultaneously.”

Such a terminal would cost more than $1 billion, would likely receive substantial government funding support, and possibly involve a merger of Halifax’s two existing operators, Halterm and Ceres, analysts say. Its eventual location remains to be determined, but it would very likely avert shipping passages under either of the harbor’s two bridges.

Consultant Study Favors Halifax Support

Interestingly enough, a few months ago, a study commissioned by Nova Scotia’s Department of Transportation and the Atlantic Provinces Opportunities Agency(ACOA) concludes that the provincial government should focus on enhancing the competitiveness of the Port of Halifax rather than private-sector proposals for Novaporte at Sydney and Melford on the Strait of Canso. These two projects offering ample real estate space have yet to secure a long-term cargo commitment from a shipping line, although Melford at least signed an agreement with SSA Marine to operate a future facility.

“From the perspective of Nova Scotia’s marine gateways, we recommend that public policies, plans and investments prioritize improvements that support the competitiveness of the Port of Halifax as Nova Scotia’s and Atlantic Canada’s primary marine gateway for containerized trade,” says the study completed by CPCS, international infrastructure development consultants. “Certainly, we recommend against public investments in new or alternative marine gateways in Nova Scotia for container traffic.”

Backers of the two private projects have argued that lower development and operating costs as well as higher productivity could attract more container business through Nova Scotia.

The study acknowledges that both projects will not have the same land-based bottlenecks facing Halifax and will also benefit from low construction costs, competitive labor agreements and the most advanced technology.

Distance to Market

However, the study notes that both projects “have the disadvantage of greater distance to inland markets than existing ports.”

It also considers that Sydney’s plan to deploy shortsea shipping services after the mega vessels arrive at port would create “prohibitive” costs for shippers.

It further notes that a three-port strategy diluting the current volume of Halifax would send “conflicting signals” to the shipping industry about the province’s main port.

On the other hand, the study raises some red flags on the future of the Port of Halifax, including the fact that it is widely regarded as a “discretionary” port-of-call compared to Montreal and competitors on the US East Coast. Another is the lack of a large local market, so global carriers top-off their loads at Halifax before calling at much larger centers on the eastern seaboard.

However, the study says the expansion of the Suez Canal capacity means positive news for Halifax as more traffic flows to the East Coast of North America from southeast Asia.

Government Response to Study

Meanwhile, how has the Nova Scotia government reacted to the study?

There has been little in public declarations. But in a response to a query from AJOT, a statement from the Nova Scotia’s Department of Transportation, replied in these terms: “Shipping traffic plays a key economic role for the province. This was a jointly funded report between the province and ACOA to help inform the overall discussion for Nova Scotia.

“Any major investment in NS ports would be led by the private sector. We’ve shared the report with stakeholders and look forward to continuing to work together to create conditions for the success in Nova Scotia in all our sectors.”

Which basically suggests that the ball, or rather the boxes, are back in the courts of the Port of Halifax, Novaporte and Melford. More close monitoring in the future required before a final form of mega terminal emerges…

Leo Ryan's avatar

American Journal of Transportation