Do three box ports for Nova Scotia make sense?

By: | at 07:00 PM | Channel(s): Ports & Terminals  

By Leo Ryan, AJOTDoes it make logistics/business sense for Nova Scotia, located far from inland markets in North America and with a small local market, to be the possible home by 2013 for two proposed new container terminals catering to the largest containerships deployed on the North Atlantic.
“In the end, cargo demand will decide,” carefully observes Mary Brooks, a well-known Canadian transportation analyst at Dalhousie University.
The question is all the more pertinent in light of the fact that the Port of Halifax, with its well-equipped Cerescorp and Halterm container terminals, is today operating at barely 40% capacity, handling under 400,000 TEUs. Like its potential regional competitors, Halifax has a deepwater harbour without depth constraints for mega-containerships in the 8,500 TEU-plus class.
But with the two projects presently in still limited stages of progress on financing and no actual construction underway, officials at the Halifax Port Authority (HPA) are pursuing their strategy of building on strengths to take advantage of rising global maritime trade with emerging markets, especially with Asia and the Indian Subcontinent via the Suez Canal. HPA president Karen Oldfield likes to point out that Halifax is 1840 nautical miles closer to India than Pacific Coast ports.
In the past year, new vessel strings and services, including most recently with Vietnam, have contributed to a strong recovery. Total Halifax container traffic in first half 2010 rose by 34% to 205,178 TEUs. Drawing attention last July was the arrival of the 6,350-TEU MOL Paramount as part of the SVE new all-water service between major Asian ports, Halifax and US east coast ports via the Suez Canal.
Meanwhile, backers of the projects at the small Port of Sydney and Melford International Terminal (MIT) at the Strait of Canso are basing their calculations on long-term forecasts of substantial shipments from Asia to North America’s industrial heartland transiting the Suez Canal and unloading cargo at East Coast ports rather than taking the direct route to the West Coast, thereby avoiding anticipated congestion especially at US gateways. Ongoing transatlantic traffic with Europe would also be a target, though less than the trade with Southeast Asia and India.
But on the occasion of this fall’s Port Days in Halifax, transportation consultant Steven Rothberg bluntly stated that the Strait of Canso and Sydney projects were “fundamentally premature – maybe by 10 to 15 years or maybe more.”
A partner with Mercator International LLC, Rothberg questioned the feasibility of developing Sydney as a hub port for mega container vessels where smaller feeder ships would then transport cargo up and down the East Coast. He suggested that container operators may just prefer to use smaller vessels to call directly where cargo was destined. Otherwise, additional costs are incurred by transferring containers from one ship to another.
The project of the Sydney Marine Group appears to be stalled since last summer when a delegation of Cape Breton politicians and business executives came away empty-handed from a trip to Ottawa to seek federal financial support of nearly $20 million – half the estimated cost of dredging an entrance channel to Sydney harbour. This would just be the initial phase before the start of terminal construction.
The MIT undertaking acquired greater international credibility last July, following a number of delays in finding financial backing, when it was announced that Maher Terminals will become a shareholder and operator of what will be known as Maher Melford Terminal.
Although the New Jersey-based terminal operator has taken an unspecified “meaningful equity stake” in the $350 million project with initial capacity of 1.5 million TEUs, its commitment has given the project a big boost.. The Strait of Canso facility would be a kind of East Coast version of the Maher terminal at Prince Rupert, northern British Columbia, which has worked well under its partnership with Canadian National R

Leo Ryan's avatar

American Journal of Transportation