Halifax Port to be ‘back door to Asia’

“There is potential for the whole region to act as a gateway for the Asian traffic to filter through Halifax to the United States,” said Brian Lee Crowley of the Atlantic Institute for Market Studies, a think-tank based in Halifax.

“Retailers are looking to diversify their risk against congestion at the West Coast ports.”

In a new report, the Vancouver-based Asia Pacific Foundation of Canada said Halifax is “set to become Canada’s back door to Asia.”

It noted that in the face of congestion in B.C., the Port of Halifax has the infrastructure and vacant industrial land to accommodate more container traffic.

The APFC said Canadian retailers such as Sears Canada, Sony and Reitmans have already begun importing goods from Southeast Asia and India through Halifax. Other retailers such as Canadian Tire are following suit.

“The reality is today very little product for Canadian Tire goes through the Port of Halifax, but in the future it will play an increasing roll for us,” said Scott Bonikowsky, a spokesman for the Toronto-based company.

Two weeks ago, the retailer announced plans to build a distribution centre in Coteau du Lac, outside of Montreal, by 2009, which will be serviced via Halifax. Starting this year, up to 5% of its imports will flow through the port.

The company sources 35% of its merchandise from offshore and has $9-billion in sales.

Mr. Bonikowsky insisted Canadian Tire was not greatly affected by last year’s six-week shutdown at the Port of Vancouver, which saw containers pile up after truckers refused to haul them away. Still, he said, “it’s very important that we see a productive and effective port in Vancouver.”

The Port of Vancouver remains the largest in Canada. Yesterday, the port announced its activity for the first half of the year. It moved 1.04 million TEUs, or twenty-equivalent units, the measure for container traffic. That was up 21% from the same period in 2005 but was largely the result of cargo being redirected from the Fraser River Port Authority.

Vancouver can handle 1.77 million TEUs, with plans to expand that to four million by 2012. In addition, a new port at Prince Rupert in Northern B.C. will add another 500,000 TEUs when it is completed in the spring.

But B.C.’s ports are already operating near capacity.

“The West Coast ports here are facing a huge constraint,” said Werner Knittel, vice-president of the Canadian Manufacturers and Exporters’ B.C. division.

The Port of Halifax, meanwhile, has a capacity for one million TEUs, yet handled just 550,000 TEUs last year. The region is looking at building an inland terminal, boosting Halifax’s capacity to 1.4 million TEUs.

CN Rail, meanwhile, has said it is prepared to put 20% more railcars into service between Halifax and Montreal.

While Mr. Knittel said the trade route between B.C. and Asia would be “the St. Lawrence Seaway of the 21st century,” he noted retailers are turning to Halifax for cargo that is not time-sensitive.

At the same time, shippers are replacing their fleets with larger vessels. So far, Halifax is the only port deep enough to handle them. The port in New York is spending roughly US$2-billion to blast away underwater rock so it can accommodate the larger ships.

“This all puts Halifax in a uniquely strategic position that it’s never been in before,” Mr. Crowley said.

The APFC said Halifax is also poised to be the port of choice for trade with India, which is seeking to double its exports. There are seven shipping lines linking India and Halifax through the Suez Canal, it said, noting, “This is almost exclusively an East Coast opportunity due to proximity and convenience.”