Growth and Renewal

Growth and Renewal

From his harbourfront office, Jim Quinn looks at the ships, heavy machinery at work, and hundreds of stacked shipping containers at the west side Rodney Container Terminal. “It’s really booming,” says the Port Saint John President and CEO.

So what made the terminal such a hub of activity? Three years ago, the Mediterranean Shipping Company (MSC) started making regular visits to serve New Brunswick companies looking to import goods, and export them to international markets. It began with bi-weekly visits in the spring of 2012 and moved to a weekly schedule later that fall. The Port is excited by this growth but recognizes its facilities are nearing capacity, so it’s developed a $205-million plan to modernize the terminal.

“You don’t want to have a growth line that flattens out because you don’t have the capacity to do more,” says Quinn. “We’re at that stage with the traffic we have now, and what we’re expecting to see this year.”

Weekly global services were a key addition to the weekly Florida-Caribbean container services provided by longstanding Port shipping line Tropical Shipping. Port Saint John convinced MSC to start coming here because the Board and management team saw an opportunity to provide shippers a more affordable alternative to get their products to global markets. Shipping from Saint John is a win-win for the Port and the province’s exporters, he says.

“We may be situated here in Saint John on the Bay of Fundy but this is an asset for the entire province,” says Quinn. “These weekly global container services now available in Saint John provide cost-reduction opportunities for manufacturers and producers throughout the province. A closer port, with the right services, reduces their inland transportation costs which makes them even more competitive in their respective industries.”

The province’s exporters quickly realized the advantages of Port Saint John and its new services. In the three years since MSC first arrived, the Port doubled its container traffic, from an average of 45,000 TEUs (the standard measure for container boxes) to almost 90,000 TEUs in 2014. The Port is projecting that number to reach over 100,000 TEUs this year.

That growth has been fueled by the many large and small businesses that are part of the export and import supply chain. Theriault & Hachey Peat Moss Ltd. (T&H), based in Baie Sainte- Anne, ships 60% of its product to overseas markets. Before 2012 only 5% of this cargo was shipped through Port Saint John. Today, 30% moves via New Brunswick’s container port, saving the company money and getting their products to market faster, says Director of Marketing Jody Williston.

The increased traffic to the Port is also benefiting the province’s trucking sector. Black’s Transfer owner, Dave Black, notes that, “Five years ago, the Port represented 30 to 40% of our business. Now it’s 75%. This has allowed us to do some modest expansion and improve our margins, which makes our business healthier.”

Quinn says Port Saint John’s enhanced shipping services lead to increased revenue and employment opportunities for the province’s exporters and importers. “Success for us is being seen as the facilitator for that growth in the province, and for those folks across the province to be in a position to become even busier,” says Quinn. “If they become busier, the real icing on the cake is if they start to hire more people in their plants.”

However, Quinn says, the Port currently has limited growth potential because it eventually won’t be able to receive the ships that are getting bigger. “The ships have gotten so large now that when they come into port there’s a deluge of containers,” he says.

The modernization plan that will allow the Port to receive larger vessels has two phases to make the terminal deeper, stronger and more efficient. First, they will deepen the harbour in the main channel and alongside the container terminal. This will increase the depth at high water in the main channel from 16.9 metres to 18.5 metres. Meanwhile the depth alongside the container terminal will go from 12.2 metres at low tide to 15.2. metres.

Second, the container handling yard and pier structures will be strengthened and lengthened. The area currently has a handling capacity of 125,000 TEUs per year; under the plan, it will have a handling capacity of 320,000 TEUs. A new intermodal yard will not only increase truck and rail handling capacity but will also provide a safer and more efficient operation.

J.D. Irving, Limited (JDI) is encouraged by the growing import and export opportunities through the Port. JDI currently ships over 70,000 metric tonnes of pulp and paper products to 30 countries each year. JDI’s Cavendish Farms is the single largest refrigerated cargo exporter from Port Saint John, shipping in excess of 6,000 TEUs.

“Port Saint John is a valued part of the supply chain of incoming materials to support the industrial manufacturing centre of Atlantic Canada – and the thousands of related jobs,” says Mary Keith, Vice President of Communications, J.D. Irving Ltd. “The Port is also a primary connection to world markets for the products we make. Added service offerings by companies like MSC, for example, are providing opportunities to grow export markets. The Port is connected inland by quality road and rail links that provide global access to customers.”

The planned seven-year expansion project will provide better service and more opportunities. Quinn says it will create more than 1,400 person years of direct and indirect jobs during the construction phase. He also says it will create jobs in the long-term – doubling direct and indirect jobs attributable to the container sector from 500 to more than 1,000.

MSC supports the proposed expansion that could well lead to increased traffic in the region, says Sokat Shaikh, President, Mediterranean Shipping Company (Canada) Inc.

“We are especially happy to hear about the planned infrastructure growth at Port Saint John,” says Mr. Shaikh. “MSC has invested in our ship capacity in the region and will continue to do so as regional business demands increase, aligning our growth with the expansion of Canadian trade, and allowing our partners in business to plan their growth for the future.”

Cruise industry will also benefit from upgrades
Over the past 25 years Port Saint John has seen tremendous growth in its cruise sector, reaching key milestones such as its two-millionth cruise guest in 2013 and 1,000th cruise ship visit in 2014. Throughout this period the cruise industry has been established as a mainstay of the tourism sector in Southern New Brunswick.

Amidst these successes also came some challenges, including downturns in the economy after 2008 and industry adaptation to regulatory changes, both of which have affected the number of cruise ships coming to the region.

However, Betty MacMillan, Manager of Cruise Development for Port Saint John, says the industry is growing again, and there are a number of positive developments – on the near and far horizons. Along with a cruise season that will stretch from May to November, for the first time this summer an expedition-class cruise ship will “homeport” in Saint John. That means guests will join the ship in Saint John whereas traditional cruise guest visit length has been on average eight hours during “port of call” visits. Homeporting means guests will spend more time in the region before or after their cruise. There will be two cruises this year organized by Blount Small Ship Adventures, and MacMillan hopes it’s just the beginning for an industry that could really boost the local tourism economy.

MacMillan also says the modernization project slated for the West Side cargo terminals will have a positive impact on cruise ships. Deepening the main channel will provide a wider operational window to allow larger cruise ships to enter the harbour at all stages of the tide.

Future growth opportunities
If the Port is to grow its container sector to 200,000 TEUs, Quinn says it must develop the import side of its operations. “The magic is in achieving balanced trade,” he says.

Quinn says the Port is well-positioned to do this. Large eastern seaboard ports are expanding and modernizing, but still won’t be able to efficiently handle expected increases in container traffic. Saint John is well-positioned to become a “secondary” port of call, he says, especially for bringing in fresh products from Florida and the Caribbean on shipping lines like Tropical Shipping.

“We feel there’s a real opportunity, in a ‘niche way’,” says Quinn. “Saint John is not going to take over the distribution of fresh products for Canada, but there’s an opportunity given our close proximity to major cities.”

Quinn says Port Saint John is already growing its import business. Coccamp, a Brazilian coffee company, is now shipping beans through MSC to Saint John and is looking at other imported agricultural products. Local coffee roaster and retailer Java Moose says this import opportunity through the port is a “game-changer” for them. Ordinarily, the coffee from that part of the world would come in through another port and then travel here by truck, creating additional costs for Java Moose.

“This is a real success story,” says Quinn. “It’s just scratching the surface of our import potential. But it’s evidence that this will work here. And there is no doubt that we have to continue to work hard to help grow our provincial economy”

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