But port must continue to fine-tune infrastructure,
market competitive advantages
By TOM PETERS
February 8, 2010
The Halifax Port Authority’s new five-year business plan says the port has the “fundamentals in place to be the primary gateway port for Canadian trade moving over the East Coast of North America over the long-term.” But the port must continue to fine-tune its infrastructure to maintain competitiveness and continue to jointly market its competitive advantages across the trade and logistics industries as markets recover and “big ships” are deployed, the report added.
The port authority hired a consulting firm in 2009 to carry out a review of the global containerized trade and how it impacts Halifax. The consultant’s report indicates that with the downturn in the global economy, North American ports have seen a 20-per-cent decline in cargo volumes since 2007. It suggests cargo volumes will show some improvement in 2010 but will not get back to pre-recession levels until 2014.
Even though shipping lines have reduced capacity and services, new large ships, ordered prior to the recession, will still be delivered and deployed, the report said.
“Three hundred and fifteen new post-Panamax (5,501 TEUs or greater) and super-post-Panamax (7,501 TEUs or greater) vessels will be delivered between now and 2012,” the report said.
Halifax sees opportunity in this forecast as the report indicates there would be incentive for ocean carriers to deploy these ships “in trades that have adequate volumes and infrastructure to support these larger vessels.”
Fewer larger ships could be used in services to replace smaller ships, thus reducing costs.
The port authority feels that given the constraints of the Panama Canal until 2014, when construction of a wider channel is complete, and Halifax’s geographic location, there are only three relevant vessel service corridors with any near-term potential for development of post-Panamax and super-post-Panamax ships.
Those corridors are:
• U.S. East Coast-Med-Suez Canal-Indian Subcontinent/Far East;
• U.S. East Coast-North Europe; and
• U.S. East Coast-East Coast of South America.
In order to capitalize on these potential opportunities, the port says it will need to exploit its strengths such as water depth and rail infrastructure and develop unrestricted terminal capacity.
There is a “window of opportunity” up to 36 months to attract these larger vessels, the business plan said. This opportunity is driven by the fact New York has relatively little capacity to handle these large ships and it has air draft issues with the Bayonne Bridge. New York is working to address those issues, however.
The Halifax Port Authority’s business plan stresses the port will also continue to work with all necessary stakeholders to ensure growth and competitiveness for its other types of cargo – bulk, breakbulk and roll-on/roll-off – and with its partners to support the steady growth of its cruise industry.
A further focus will be on revenue diversification, which is important for the port to survive and thrive even with the cyclical nature of the shipping industry.
The authority said it will also continue to invest in capital-intensive infrastructure to support the cargo business.