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  • DP World inaugurates operations in Saint John, NB

    Posted on: February 22nd, 2017

    By Tom Peters

    DP World’s success in the port of Saint John will be a twofold strategy, taking a value-added approach while building container volumes, says Curtis Doiron.

    Dubai-based DP World, which operates over 75 marine and inland container terminals on six continents, officially took over the operation of Saint John’s Rodney Terminal, under a 30-year lease, in January, 2017. The terminal is in the early stages of a multi-year, $205-million expansion which, when complete, will allow for the berthing of larger ships. In addition to the container facility, DP World also took over the operations of Saint John’s Navy Island Terminal, which at one time handled various breakbulk cargoes and now handles bulk products such as salt and petroleum coke (petcoke) for NB Power.

    Doiron, DP’s Terminal General Manager in Saint John, sees opportunity for the Navy Island facility, which has 450,000-square feet of covered storage space and on-dock rail service “that will meet the needs of miscellaneous breakbulk opportunities that may present themselves” plus it will serve “quite nicely” for other operations such as warehousing, container consolidation, stuffing and other services, he said.

    The contract in Saint John gives DP World a presence on the East Coast and is its fourth location in Canada. It has terminal operations in Vancouver, Prince Rupert and Nanaimo, all in BC.

    Doiron said DP World’s interest in Saint John stemmed from the fact the company didn’t have “an East Coast installation within the DP network, and if we are successful it will not be just another container terminal. That market perhaps is a bit of a supply and demand issue, heavily weighted on supply and less on demand in Atlantic Canada, especially when you factor in development projects in Nova Scotia,” he said, referring to proposed mega container terminals for Sydney and Melford.

    In Saint John, Doiron said DP World will take an added-value approach “to the marketplace beyond just containers, reaching further into the supply chain to supply ancillary services which will ultimately result in more container movements through the port. We think what Saint John has is a unique value proposition in that there is infrastructure (Navy Island) directly in the port.”

    Doiron said Saint John also has “an extremely engaged and reliable workforce in the ILA” with a skill set that is very well versed in all types of cargo. “The workforce here, just by virtue of the evolution of the business, understands the dynamics of working with different types of cargo and do it very productively,” he said. An additional plus to the port’s infrastructure is its rail access provided by CN. “If I look at what is available to grow our business today, it is CN,” said Doiron. There may be other rail opportunities in the future, he added, but for now “CN is the product and certainly they provide an excellent service.”

    Before DP World began operations in the port, Saint John lost one of its major customers, Tropical Shipping, which moved its vessels to the port of Halifax. Tropical, which maintains its administration in Saint John, moved over 40,000 TEUs over Saint John annually, approximately half the port’s container volume.

    Doiron said DP World had no real indication that Tropical was leaving and it was “disappointing” to see them go. “They would have been a good customer to work with here but, having said that, it doesn’t change our game plan in terms of growing the business. It means the starting point is a bit further back than we would have liked, but it’s full steam ahead and we are fully engaged and we think there are growth opportunities,” he said.

    Although Doiron said the company will pursue a value-added services strategy, DP World’s core business is containers. The fact that Saint John could potentially be in a market with major new container terminals in Sydney, Cape Breton, Melford, Nova Scotia and possibly a new major terminal in Halifax won’t necessarily be a bad thing, said Doiron.

    If the Sydney and Melford projects do happen, “it certainly will present an interesting dynamic to the marketplace. From what has been said in the media about their strategies, I understand they want to go after big ships and certainly we are not a big ship terminal for a variety of reasons,” with one being the fact the port has tidal restrictions, he said. “So from our perspective, it could work to possibly enhance our service offering. If a Melford or Sydney or even Halifax has a long-term strategy to go after big ships and establish a marine hub and spoke type concept, I think a terminal like Saint John could be a critical piece to that supply chain solution,” he said.

    The hub and spoke strategy mentioned for Sydney, for example, would see vessels with capacities of 13,000 TEUs and greater unloading containers and then loading them back onto smaller ships destined for ports that can’t take the deeper draft vessels. Those smaller ships of 1,500 to 2,000 TEUs or even 5,000 TEUs, small by today’s standards, “are still going to need a home” and DP World feels it could play a key role in the hub and spoke world.

    “But there are a lot of things that have to happen and it wouldn’t be real fast. We will watch it with interest and will adjust our strategy along the way, if need be. But we also have to be realistic in the port community as to what we can offer in the marketplace and focus on that,” Doiron said.

    DP World, which will have an administrative staff in Saint John of twelve, has already backed up its commitment to the port with the purchase of two post Panamax cranes. The cranes, purchased in Charleston for over $10 million, are used but in excellent condition, said Doiron. They have a reach of 16 containers wide and seven containers high and designed to handle vessels up to 6,500 TEU capacity.