Case made at Halifax trade bloc conference for improved regional transportation links

Atlantica needs to improve rail and highway links, not only to attract new trade, but also to play a more significant role in the flow of goods already entering and leaving the region, says an executive with Michelin North America.

Michelin has three tire plants in the Nova Scotia. Every year it imports 3,000 containers filled with raw materials through the Port of Halifax. That’s on top of 15 to 20 truckloads of goods brought by land from plants in the United States. The amount the tire maker brings in half of what it exports – 6,500 containers – all of which flow through Montreal to either Canadian or American customers.

“In Montreal I can go with CN or I can go with CP,” said Stan Pech, manager of import and customers for Michelin North America, adding that there are also good highway links between Montreal and Chicago.

“Here we have very limited options.”

Having multiple transportation choices ensures a competitive market for price as well as on-time delivery, he said.

Pech noted that in some of the company’s contracts, delays can cost the firm $2,000 for every five minutes past the scheduled delivery. More rail and highway options could entice his firm to look at shipping goods from Halifax, he said. But with its current system running smoothly, any shift from Montreal to Halifax would happen gradually, he said.

Transportation challenges facing companies in the Atlantic region was among the topics discussed Friday at the Atlantica 2007 conference in Halifax. Atlantica refers to a trade zone encompassing the Atlantic provinces, the northeastern United States and parts of Ontario and Quebec. The region stretches from St. John’s to Buffalo, N.Y.

It aims to restore the traditional north-south trade relationships between Atlantic Canada and the northeastern U.S. that were severed after Confederation. Atlantica initiatives include making the region a hub for international trade.

The Atlantica trade corridor is also referred to as the Atlantic Gateway. It aims to capture trade flowing between North America, Europe and Asia, which would travel to the east coast of North America via the Suez Canal. Goods flowing into the Port of Halifax could then be routed by short sea shipping to other ports along the east coast. It can also be sent to the northern U.S. market by rail or through improved highway links.

The ability to ship goods to and from Atlantica is a concern for both large and small businesses. During a panel discussion on transportation, Pete Luckett of Pete’s Frootique, said his small business faces challenges in importing fresh fruits and vegetables – particularly exotic ones – to the region. One of his major challenges is cost. As it stands, he brings in goods that are first brought into Toronto. It can often to be hard to find a small carrier who is willing to take the haul his company’s smaller loads at a good price, he said.

“All the small carriers that used to be around aren’t around anymore,” he said, noting there has been a great deal of consolidation in the transportation industry.

Charles Cirtwill, acting president of the Atlantic Institute for Market Studies, said if the Atlantica trade corridor reaches its full potential, it will be a benefit to smaller firms such as the Frootique as well as large ones such as Michelin.

“The more goods that are carried through the region, the more containers, the more flexible your supply chain becomes,” he said.