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Canada’s Gateway Ports: Title Holders and Contenders

Canada’s Gateway Ports: Title Holders and Contenders

With the current sea of red ink in the shipping sector, it is not hard to liken the state of Canada’s gateway ports to a boxing match between current title holders and contenders. Rather than relegating this metaphor to an afterthought, this article will use it to review the march of Canada’s container gateway title holders and their leading contenders.

Eastern and Atlantic Canada

Montreal is the largest container gateway port in eastern Canada, handling about 1.44 million TEUs. The port’s biggest strength is its proximity to Canadian and U.S. mid-west markets. It is a one-day truck haul to 40 million consumers and less than two days from 70 million and served by two transcontinental railways. Previously, a North Atlantic trade-dependent port, its markets are now global, as carriers tranship containers.

Montreal’s strength as container gateway competitor stems from the unique array of carriers that service the ports, including northern Europe, the Med, Asia, and the Caribbean. Interestingly, its carriers primarily operate outside the alliance structure and in some cases, with purpose-built vessels for this trade. Major players include MSC, Hapag-Lloyd, OOCL, Maersk and CMA CGM. Oceanex operates a short sea service to and from Newfoundland & Labrador. A mostly flat container growth rate in 2016 has not prevented Montreal from adding infrastructure muscle. The Port of Montreal commenced construction of a 450,000 TEU-capacity terminal in the Viau section of the port in 2016. This facility can be expanded to 600,000 TEUs.

2016 was an active year for the Port of Halifax. The most recent performance figures show a 16.1 percent increase year-over-year of container traffic to the end of the third quarter in 2016. Such a growth rate would bring annual container volumes close to 500,000 TEUs or within 50,000 TEUs of the port’s record set in 2005.

How the Halifax fight card plays out in 2017 is still a bit uncertain. Since early fall, there have been reports of either a merger or operating agreement between the port’s two container terminals. If the agreement comes into effect, it could result in all Halifax container cargo being handled at the south end terminal (Halterm) or it being split between the two, whereby post-Panamax ships would be dealt with at Halterm and smaller vessels at Fairview Cove.

Pacific Region

As Canada’s largest and busiest port, the Port of Vancouver trades with more than 160 countries. Vancouver experienced continued growth in both bulk and containerized grain and agri-product businesses year-over-year since 2012. In 2016, 23,524,095 metric tonnes of grain were handled, up more than 6 million from 2012. A wily veteran competitor, Vancouver throws an impressive one-two punch with Global Container Terminal (GCT) Inc. and DP World (Canada) Inc. It is the undisputed container gateway port heavyweight title holder in Canada regarding traffic volume.

Vancouver’s dominant marine container operator is adding increased foot speed to its arsenal. The 2017 fight card will continue to see construction activity, as well as equipment arrivals and commissioning, occur. Last June GCT Canada received delivery of its first 6 Tier 4f, lowest emission, 40-tonne lift capacity; Konecranes rubber-tyred gantry cranes (RTG). The final 6 RTGs will arrive in the second quarter of 2017. In September 2016, GCT received delivery of its fleet of eight; electric Künz cantilevered rail mounted gantries (CRMG). The fleet will undergo testing before the project goes live in mid-2017, and along with the intermodal yard redesign, will increase efficiency and speed up train handling at GCT Deltaport.

While recently fighting in a lighter weight class, the DP World Centerm expansion project will see the marine terminal add more muscle and strength.  It plans to increase TEU capacity from 900,000 to 1.5 M. It is scheduled for completion in 2019. At the start of 2016, the proposed Centerm Expansion Project was in the preliminary design phase when technical and environmental studies were undertaken. The proposed project is subject to review and approval by Port of Vancouver’s project and environmental review process.

Not to be outdone as a container gateway port, the Prince Rupert Port Authority’s completion of the Fairview Terminal Phase 2 project will see them move to a higher weight class in 2017. The Phase II North container terminal expansion project, launched in the first quarter of 2015, was, by December 12, 2016, more than 75 percent complete and is on schedule to increase annual capacity at Prince Rupert’s container terminal to over 1.35 million TEUs by the third quarter of 2017.

Conclusion

At least three promoters are looking to become a gateway port and get into the marine container terminal fight game in Canada.  These groups propose building new greenfield terminals to attract the 19,000+ TEU mega ships. The promoters must do significantly more than announce their intentions to be placed on the container fight card line-up even to be considered dangerous opponents. However, in a period of shipping line consolidation and new alliance structures, the presence of global container terminal operators active in the Canadian market should not be underestimated. If the presence of contenders in the market helps spur innovation and infrastructure investment, amongst existing titleholders, shippers will indeed say the main prize fight, and the undercard was worth watching in 2017. Viewers are encouraged to read James Frost and Darryl Anderson’s full article in the February 2017 issue of BC Shipping News for more in-depth analysis or more ports.

BCSN-Feb17-Ports

 

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