Special delivery

Special delivery

Approximately 90 per cent of the world’s goods move by sea. That provides a host of economic opportunities for Atlantic Canada: it is strategically positioned as an entrance for goods from around the globe for dissemination across North America — and as a departure point for international exports. More than $30 billion in merchandise was shipped through Atlantic Canada in 2014, according to Transport Canada, and that number has no doubt increased each year since.

As ocean traffic increases and container vessels increase in size, local ports and transportation companies are working together to read the trends, modernize, and reap the benefits of moving goods quickly and efficiently.

Why by sea?
“Ocean transport is by far the most economical way to move things around the world,” says Oceanex executive chair Captain Sid Hynes. “In terms of cost, it’s the cheaper method of transportation — over truck, and certainly over air — and the environmental impact is much less.” Hynes says the environmental footprint per container mile (the amount of emissions created to move a container one mile) on the road is about seven times that of a vessel.

Marine transport is also faster than many might think. An Oceanex vessel leaving Montreal, for example, can be in St. John’s 60 hours later, comparable to the time required for a truck to make the trip. It’s why Oceanex has lately focused on the “reefer” (refrigerated or temperature-controlled cargo) business, and currently brings in about 100 containers a week of perishable food items, accounting for 30 per cent of Newfoundland’s perishable food imports. Overall, Oceanex dispatches about half of all cargo brought into the province.

“Our on-time performance is 99 per cent — it’s unbelievable, really — taking into account weather delays and everything,” says Hynes. “That takes the right equipment, the right people, and the right plan.” It’s also crucial to business survival: as a privately-owned company,” says Hynes, “if we don’t go, it hurts.”

Successful marine transport relies on a network of highways and/or railways to meet it at the other side. It’s why most ports in this region have easy access to land transportation, and Oceanex, though primarily known as a shipping company, also offers intermodal transportation services (door-to-door and pier-to-pier) between Newfoundland and Labrador and the rest of North America.

The Port of Belledune, in northern New Brunswick, is ice-free year-round with both rail and highway access, making it a great alternative to the St. Lawrence Seaway’s inaccessibility during the winter months. It’s other strategic advantage? Space — it has over 1,600 acres of undeveloped property.

While Hynes says the volume and value of cargo coming into St. John’s decreased in 2016 thanks to a dip in Newfoundland and Labrador’s fortunes, he recognizes the crucial link his company and its predecessors play to the residents of the province — and have, since 1909.

“We focus on providing good service to our customers and their satisfaction levels are high. We have an experienced team with over 1,000 direct and indirect employees. Locally, we play a key role in the economy. As an example, over 75 per cent of the Port of St. John’s’ revenue comes from our operations.”

Hynes has hit on another important point: historically, many of Atlantic Canada’s centres were built around their ports and they are still vital to a city’s culture and, importantly, economy.

Safe harbour
The Port of Belledune in northern New Brunswick is a bright light in an area hit hard by the slowdown in the mining sector. Responsible for almost 2,000 direct and indirect jobs, that port, though “underutilized,” has turned a profit in each of the past 10 years, and is successfully developing its niche.

“We are a specialized port,” says Belledune Port Authority president and CEO Denis Caron. The port has limited infrastructure to welcome containerized cargo; instead, it is well equipped for bulk and breakbulk materials, such as coal, wood chips, wood pellets, diesel, concentrates, and salt.

Unlike most other large ports, the Port of Belledune is not located in a city centre. Its key competitive advantage is space: no congestion or urban constraints, and over 1,600 acres of undeveloped land. In operation since 1968, the port also boasts a positive relationship with the nearby community (“I call our brand ‘locally well-accepted,’” says Caron), and over $1 billion in infrastructure.

“We’re at about 25 per cent capacity, so we have plenty of room to grow,” says Caron. “We have the assets here and we are underutilized. We have to optimize what we do and develop our market.” Efforts are already working: 2015 tonnage was up seven per cent over the previous year.

Anticipating growth opportunities with regards to container shipping, the Port of Saint John is undergoing a $205-million modernization of its container terminal. Photo provided by Port of Saint John

For ships coming to or from the Saint Lawrence Seaway, Belledune is a natural stop, and transshipment is integral to the port’s future. “We can handle large volumes,” notes Caron. “We can receive product, store it, and ship it off through the St. Lawrence and Great Lakes in smaller volumes, or vice versa.” When the St. Lawrence is inaccessible in winter, the ice-free Port of Belledune will still be open, with strategic access to CN Rail and highways.

Bigger, stronger, deeper
With the Irving Oil Refinery practically next door, the import and export of petroleum products will always be a major source of activity for the Port of Saint John. While it has long been well equipped for bulk and breakbulk cargoes, however, the port was on the verge of missing out on another major opportunity.

“We realized five or six years ago that we weren’t ready for the future with regards to container shipping,” says Andrew Dixon, senior vice-president of trade and business development at the Port of Saint John.

“Even though we have a deep harbour, deep is relative. Ships are getting larger and cranes are getting larger and require more pier strength.” About a year ago, the Port announced a $205-million modernization of its container terminal, to be completed in five to seven years.

The project will increase the port’s maximum low-tide pier depth from 12.2 to 15.2 metres, and the pier strength from 200 pounds/square foot to 2,000 pounds/square foot. An intermodal rail yard able to accommodate a 12,000-foot train will also be constructed. The Port team, led by Dixon, are also in negotiations with a worldwide terminal operator to provide new generation cranes and equipment for the container terminal.

“We’ll be ready for larger ships and longer trains and bigger cargoes and a greater amount of activity,” says Dixon. “The whole container terminal, the acreage will be tremendously expanded.”

Saint John is the only port in Atlantic Canada to be served by two competing rail lines: CP and CN. It is also, says Dixon, the closest ice-free east-coast port to the inland market. “There’s nothing but opportunities,” he says, referring to those opened by the EU-Canada trade deal.

“While we can connect with Europe right now, from the standpoint of transit time we’re not as competitive as we need to be. We’re very interested in expanding our container shipping services specifically to have better connections to Europe.”

Shipping is important to the local economy, he says, but also a part of the bigger national picture.

“It’s important that Canada be well equipped with ports able to take part in worldwide trade,” he says. “We’re delighted that we’re going to be, with this modernization, in an excellent position to do so, and with our geographic location, and competitive rail connections, we are planning to grow and prosper.”

Dual advantage
Not surprisingly, Lane Farguson (communications advisor for the Halifax Port Authority) is incredibly articulate when describing the port’s competitive position. “Halifax is a deep-water [16 metres], ice free-port with the capacity to grow,” he says. “We focus on what we do well, which is accommodate the big ships that are now starting to call on the east coast of North America, and work with our partners to grow the container business in Halifax and, by extension, the economy of Atlantic Canada and eastern Canada.”

The Halifax Port Authority oversees the ports of Halifax and Sheet Harbour, separated by just over 100 kilometres of Nova Scotia shoreline. The two are complementary operations: while both are equipped to on-and off-load breakbulk cargo, Halifax welcomes cruise lines and the most modern container ships, while Sheet Harbour is the destination port for oversized and specialized cargo (think wind turbines, sheet metal, and fabrication modules) not easily moved through a busy city.

The ports of Halifax and Sheet Harbour are complementary operations. Halifax welcomes cruise lines and the most modern container ships, while Sheet Harbour is the destination port for oversized and specialized cargo such as wind turbines and fabrication modules. Photos provided by Halifax Port Authority

At the Port of Halifax, the Authority is the landlord, administering 260 acres of crown land, including two container terminals and a long list of real estate properties; at Sheet Harbour, it is the operator, on behalf of the provincial government. Having both ports working together is just part of the Authority’s mandate of cooperation in readying for the next generation of cargo ships.

“Partnerships are very important for us,” says Farguson. He highlights strong relationships between carriers, terminal operators, CN Rail, pilots, tug companies, and organized labour, which are making “operations more efficient, thus creating value across our port platform strengths of logistics, intermodal connectivity, and terminal handling velocity. Supply chain efficiency is paramount in the global economy.”

Containerized cargo volume through the Port of Halifax was up 19.6 per cent in the first half of 2016 over the same period last year. This is encouraging, says Farguson, indicating Halifax is keeping up with the major shipping industry transitions: not only are container ships getting considerably larger and requiring more dockside depth, but travel between continents is becoming more efficient and cost-effective.

The recent expansion of the Suez Canal opens a direct route for goods to move to/from China to Halifax, and throughout North America. Enhancements to the Panama Canal also open opportunities for Halifax from the other direction.

“Everyone thinks Europe is our prime partner,” says Farguson. “Europe remains a key market, but we’re also seeing considerable growth from China and Southeast Asia via the Suez Canal.… Sixty-six per cent of what arrives in Halifax is intermodal, taken off the ship and trucked or trained into Montreal, Toronto, the Midwestern U.S., Chicago. And then in reverse, we’re getting a lot of product from those areas that goes through Halifax before shipping out to the rest of the world.”

Although containerized traffic through the Port of Halifax could triple with no significant changes to infrastructure, there is work ahead to make the most of this capacity.

Marine Atlantic is considered an extension of the TransCanada Highway, connecting Newfoundland and Labrador to Nova Scotia. Approximately 100,000 commercial vehicles make the crossing each year.

“We’ve seen over a quarter billion dollars in investment over the last 10 years into facilities in Halifax to make sure that we are big-ship ready and that we can be ahead of the industry. This includes our investment as a port authority, federal funding, and investment by terminal operators including new cranes to accommodate these ultra-large vessels. Everyone is working together to make sure the pieces are in place.”

The floating highway
Although Marine Atlantic is known as a provider of passenger and commercial ferry services, it is perhaps more accurate to think of its route across the Gulf of Saint Lawrence between Nova Scotia and Newfoundland and Labrador as an extension of the Trans-Canada Highway.

“We’re a hybrid service,” says Don Barnes, Marine Atlantic’s vice-president of customer experience. “The terms of union [between Newfoundland and Canada] in 1949 say that there is to be a freight and passenger ferry service; when the Trans-Canada Highway was finished, it needed to be able to carry vehicles. Before that, it was railcars that came to Port aux Basques … eventually the railway went away and our focus became trucks.”

Because Marine Atlantic’s operations are considered a “lifeline service” committed to in the Terms of Union, it is subsidized by the federal government.

Today, Barnes says, about 50 per cent of the goods that travel to and from the island of Newfoundland do so on that ferry service; about 100,000 commercial vehicles make the crossing each year. About half of those cross with a driver, the other half are “drop trailers” which are picked up by a cab and driver on the other side of the crossing.

Marine Atlantic offers two crossings across the Gulf each day, year-round. When passenger traffic is up in the summer months, the number of crossings is increased and some commercial-only trips are added. In the low season, commercial traffic is the mainstay of the service — goods move on and off the island at a reasonably consistent rate year round. Boats run, even when at less than full capacity.

“From a public service perspective, we’ll have more delays and cancellations in the winter, so keeping the traffic moving and not allowing it to back up in advance of weather is important to us,” says Barnes. It’s a balancing act, he admits, to keep traffic and goods moving as efficiently and economically as possible — even when the weather turns, and a day without ferry service can mean fast-emptying grocery stores on the island.

“We have to have a schedule, but we try to ensure we have enough capacity available in terms of the number of crossings we plan a year to move people in a reasonable amount of time,” says Barnes. “We do build discretionary sailings into our schedule, in which the ship is available but if we don’t need it, we don’t sail. We watch our schedule over the year and we change it over the course of the year.”

The wait time for a commercial vehicle looking to cross the Gulf is an average of 10 hours, Barnes says, taking weather delays and cancellations into account. Overall, the ferry service’s performance record is about 88 per cent on-time. Recent efficiencies in business process and communications (including an electronic notification system for all customers and a drop trailer management system) and infrastructure, including new, younger vessels and terminal and dock enhancements, have improved that.

“We’ve been pretty successful over the past few years. We’ve lived within our budget and we’ve seen customer satisfaction from commercial customers and passengers improve.”

Ship to shore
As the infrastructure upgrades fall into place, intermodal connections improve and reliability rates increase, one of the last remaining hurdles for east-coast marine transport operators is getting the word out. They say that people in central Canada often don’t recognize the opportunities available from their neighbouring Atlantic ports.

The good news is that regional port operators are aware of the disconnect, and they’re working diligently to deliver that message as they do all things: as timely, efficiently and effectively as possible.

Feedback: dchafe@atlanticbusinessmagazine.com
@AtlanticBus; @portofHalifax; @PortofBelledune; @MAferries; @OfficialOceanex; @PortSaintJohn; #SupportedContent; #SpecialDelivery

1 Comment to “Special delivery”

  1. Hi why is it that canada seems to have a ferry company with the only passenger and freight ferry run by one company from nova Scotia to newfoundland with no other company being able to get a foothold this would not happen in Europe!!!!

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