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New CSX terminal to heat up intermodal competition along St. Lawrence corridor

Posted on: March 18th, 2013




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By Mark Cardwell

The late-January unveiling of a project by American rail-freight giant CSX to build a new $93.3-million intermodal terminal near the Quebec port of Salaberry-de-Valleyfield warmed the hearts of local stakeholders on one of the coldest days ever recorded in Central Canada.

But the news brought chills to many stakeholders in and around the nearby port of Montreal, who fear the advent of the new trans-shipment centre will lead to heated competition for the movement of cargo – and containers in particular – along the St. Lawrence trade corridor.

“We believe this new terminal will provide immediate and long-term benefits to Quebec and to Salaberry-de-Valleyfield,” CSX chairman, President and Chief Executive Officer Michael Ward said when he announced the project at a press conference in Valleyfield on Jan. 25.

He was accompanied by Quebec Transport Minister Sylvain Gaudreault and the town’s mayor, Denis Lapointe.

The two levels of government will contribute $21.6 million to the project, which also involves a $14-million expansion of CSX’s railroad terminal in Massena, N.Y., and improvements to CSX’s rail lines between Syracuse and the Canada-U.S. border.

The project is expected to create more than 600 construction jobs for two years starting this spring, when work on the 36-hectare Valleyfield site is expected to begin.

When it opens in 2015, the terminal will be primarily used for the off-loading containers from freight trains to trucks, and vice versa.

According to Ward, the new facility will provide shippers from across Quebec an opportunity to cash in on both the economic and environmental benefits of intermodal rail and growing North-South trade by connecting the Montreal region with CSX’s 34,000-kilometre-long rail network in the U.S., and beyond.

“The terminal will provide an anchor for the development of new business, helping boost the economy and create jobs while helping the environment and reducing congestion on highways,” Ward said.

He later added that the facility will employ around 50 people – a far cry from the 337 jobs that Quebec’s transportation department had suggested would be created.

However, Ward said the project and the increase in cargo traffic the new terminal should generate dozens of indirect jobs in around the port of Valleyfield, especially in warehousing and shipping.

Frank Dunn agrees. As President of Valport Maritime Services, a private company that provides stevedoring, logistics, marshalling, warehousing and staging of breakbulk and bulk cargoes (notably for shipments to Canada’s Arctic region) at the port of Valleyfield, he considers the CSX project to be a once-in-a-lifetime windfall for the entire Southwestern corner of Quebec.

“It’s absolutely incredible news,” Dunn told Canadian Sailings. “The new terminal will be a game changer for the port and Valleyfield. It will greatly enhance the port’s role as this region’s economic engine.”

He added that the new intermodal terminal – and specifically the new North-South cargo shipping dynamic it will bring to the St. Lawrence trade corridor – will result in many new and potentially lucrative business opportunities for his company and other port service providers, several of which already work with CSX at the Florida-based company’s small terminal in nearby Beauharnois.

Ward notably downplayed the impact that the new terminal will have on business at the port of Montreal and on competitors like Canadian Pacific Railway and Montreal-headquartered Canadian National Railway.

“CN’s routes tend to be East-West while ours are primarily North-South,” he told The Gazette on Jan. 25.

That same day, however, CN spokesperson Louis-Antoine Paquin told the Montreal daily that the new terminal “will certainly be added competition for us in the Montreal region (and) “it definitely shows (CSX’s) desire to increase their presence here.”

A few days later, however, a CN spokesperson in Toronto told Canadian Sailings that his company has known about the CSX terminal project in Valleyfield for many months.

“It will mean more competition for us and other companies in the field,” said Mark Hallman. “However, we wish CSX the best of luck with its project.”

A spokesperson for the port of Montreal shared CN’s concerns – but took a similar high road in regards to the CSX project.

“It’s nice to see foreign investment in Quebec and we’re happy for the people of Valleyfield,” said Yves Gilson. “And we’re not against, or afraid of competition. Shipping by water is cheaper and Montreal has a great geographical advantage. But we’ll have to wait and see what, if any impact a direct rail line from our region to the port of New York City will have on our operations.”

For his part, McGill University business professor William Polushin sees the new terminal project as a sound business investment for CSX, Valleyfield and the province.

“The nature of capital is to go where the best returns are,” he said. “CSX obviously sees an opportunity to reap benefits from the increased flow of trade across both sides of the border (and) get a bigger share of the shipping pie.”

An adjunct professor in international competitiveness and management at the Desautels Faculty of Management and the founding director of McGill’s Program for International Competitiveness: Trade and Innovation, Polushin also believes the new terminal will be a healthy addition to Quebec’s transportation landscape.

“I don’t see it as being bad for the port of Montreal or CN or CP,” he said. “Sure it will mean added competition. But just building a new terminal doesn’t ensure success. Like in any industry, CSX will have to go out in the marketplace and engage potential clients. And their competitors will adapt to the situation as it evolves, like they do in every other market where they compete.”

That competition, he added, may also be good news for Canadian companies with goods to ship to the U.S. or other markets.

“It may result in choices and possibilities that currently don’t exist,” he said. “Competition is almost always a positive.”

Polushin also downplayed criticisms over the Quebec government’s investment in a U.S.-led project that will create competition for Quebec companies in their own back yard.

“The Quebec government is doing what all governments try and want to do, which is to attract foreign investment into its jurisdiction,” he said. “Whether it’s a city or a province or a country, investing in these kinds of projects is a completely normal extension of the business agenda.”


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