Don’t forget to think about the customer

OTTAWA — Last month Korea’s Hyundai Heavy Industries, the world’s largest shipbuilder, announced it had won a $1.2-billion contract to build eight very large container ships for a French firm. Each of the new 363-metre ships will be able to carry 11,400 20-foot containers at a time — twice the capacity of the container ships that now call on Halifax.

The biggest players in world shipping are making big bets on the next generation of container ships — the Suezmax vessels, which are container ships as large as supertankers. They are too big for the Panama Canal and just small enough to fit through the Suez Canal. Many of those behemoths will end up carrying products from Asian factories to North American consumers, taxing strained shipping infrastructure at both ends.

British Columbia ports are already struggling to keep up with the rapid increase in shipping, and the federal government is spending $1 billion upgrading the transport infrastructure there to keep the ships moving and the cash registers ringing.

Atlantic Canadian business people and politicians would like nothing better than to join in the shipping gold-rush, profiting from the massive exports from Asia’s DVD-player mills, and there is reason to believe they might be able to but there is no guarantee, and so far Atlantic Canadian ports have enjoyed only a tiny piece of the action.

Most of the massive increase in trade from Asian ports has gone to the West Coast and ports on the American east coast. Halifax is only operating at half its capacity — about 500,000 containers a year, instead of the million it is capable of handling.

This is in spite of the fact that it is the nearest North American destination for some South Asian and Southeast Asian ports using the Suez Canal.

An ACOA report released in Halifax on Friday says that the region ought to be able to get a piece of the new Suezmax action. There is, the report says, “a distinct but discrete window of opportunity for the Atlantic gateway to achieve an increase in volumes.”

Industry watchers say the $200,000 feasibility study tells us little that we didn’t know already, but it was a necessary step in the process of wedging some money out of the federal government’s $2.1-billion gateway infrastructure fund.

ACOA Minister Peter MacKay and Premier Rodney MacDonald are both pushing hard to get some of that money spent in Nova Scotia.

There’s an open question about whether that money will actually end up helping Nova Scotia get a bigger share of the Asia-America trade.

Unlike the British Columbia ports, Halifax has capacity to burn, so there are no obvious large investments to be made in roads, rail or docks.

Our problem isn’t lack of capacity, it’s a shortage of customers. Few Indian exporters know that Nova Scotia exists, and the federal government has so far done little or nothing to help make them aware of it, even while it has invested millions in marketing West Coast ports.

International Trade Minister David Emerson is tireless in promoting the British Columbia gateway to international business groups, but he never mentions the potential on the East Coast.

This study ought to make it easier for Mr. MacKay to win some marketing money from Ottawa and let Mr. Emerson know about the ports on Canada’s other coast so that he can mention us when he’s talking to a Asian business groups.

There will also be money spent on infrastructure in our part of the world, which may or may not help us win more business from Indian exporters.

Mr. MacKay sounds bullish on the potential for a new container port for Melford, on the mainland side of the Canso Strait, not far from the causeway. Other ports — like Sydney and Saint John — will also be pushing for a piece of the federal infrastructure cash.

This poses several risks, according to Charles Cirtwill, acting president of the Atlantic Institute for Market Studies.

A federal investment in the Strait, which would be good politics for Mr. MacKay and Mr. MacDonald, could mean that Halifax shippers end up competing with a more heavily subsidized operation at the other end of the province.

“It’s clear that they’re going to compete with us, and they’re going to compete with us using 50-cent dollars,” he said.

Mr. Cirtwill is afraid that the Nova Scotia shipping industry will end up with too many players working at cross-purposes.

Imagine you’re a teddy-bear manufacturer in India, he says, and in the same day you have visits from the Port of Halifax, Halifax Gateway Council, the Nova Scotia Gateway Initiative, the Atlantic Gateway Initiative, Melford Terminals and the Laurentian Energy Group in Sydney. They all want your business, and they’re all giving you a different message.

“You end up in an auction and by the time you’re finished the container is coming through here at 32 bucks and everybody’s losing money, except for the guy who owns the teddy bears.”

If we want to make some money shipping those teddy bears, we’ve got to think about what suits that manufacturer in India, not what suits us.