Is cargo talk just too good to be true?

Plans are being made to accept an onslaught of container cargo through Nova Scotia ports. It’s positive, occasionally, to think outside the box, but are these plans overly optimistic?

Industry forecasts suggest ports on the east coast of North America will reap the benefits of a cargo deluge from Asia, in particular the Indian subcontinent, over the next several years via the Suez Canal.

There are several reasons to be optimistic the cargo will come here. Continued congestion at West Coast ports is forcing foreign manufacturers to find new entry points into North American markets.

North American retailers are using various ports to also avoid the congestion but also for security reasons. If a major port becomes blocked or closed, they want other doors through which to bring their products here.

There is also the issue of bigger ships. Several shipping lines are moving toward the 8,000 to 10,000 TEU (twenty-foot equivalent unit) vessels, and some even larger than that. There are only a few ports that have the water depths to handle those vessels when they are fully loaded. Both Halifax and the Strait of Canso have the water depth to handle these larger vessels.

For the past several years the Port of Halifax has handled up to 550,000 containers. Port officials say it has the capacity to handle just over a million, and with some expansion and infrastructure improvements, the port can increase that capacity to over two million.

At the Strait of Canso, Trident Holdings Inc., a Nova Scotia company, plans to build a container cargo terminal at the Melford Industrial Reserve. Details of the project have not been made public, so the size of the facility, when it will be built, how it will be financed and where the cargo will come from would be just speculation.

The new terminal opening in October in Prince Rupert, B.C., will handle 500,000 containers, so it is only reasonable to think that a new terminal at the Strait would be at least similar in size, with room for expansion.

The Port of Sydney is undergoing a major study that will produce a master plan that likely will guide its future. It is already known that Sydney wants to get into the container cargo business as well.

So on the surface, it would appear both Halifax and the Strait of Canso, with a new terminal, could combined handle just under three million containers.

That is a huge jump from the present half a million at Halifax and people in the container cargo business don’t expect that number to change much for at least two years. So one has to wonder when, or even if, the cargo will come in the volumes predicted.

And while Nova Scotia ports wait for the big cargo boom, the very competitive ports along the U.S. east coast are challenging for the Suez business and making their moves.

The Halifax Port Authority announced recently that it had entered into a memorandum of understanding with the Suez Canal Authority that will allow both parties to share ideas, marketing data, technical information, etc.

However, the Suez authority signed similar agreements with the ports of New York and New Jersey, Baltimore and Norfolk last year, so those ports are also very interested in the Suez connection.

In other U.S. developments, Maersk recently announced that the Port of Savannah is being added to its service through the Suez Canal. This same service left Halifax recently.
Late last week, carrier APL announced plans to start in July the first all-water service connecting South East Asia and the Indian subcontinent with the U.S. east coast via the Suez Canal.

The port rotation for that service will include New York, Charleston, Savannah and Norfolk.
The Suez Express Service will use eight vessels of between 4,000 and 4,500 TEUs. Transit times will be Singapore to New York in just 21 days and Singapore to Charleston and Savannah in 24 and 25 days, respectively.

There are other factors at play. If Halifax or other Nova Scotia ports do attract the much larger post-Panamax vessels through the Suez, the question remains will those larger carriers stay here once the Panama Canal expands. That expansion is expected to be done between 2015 and 2018.

And further, India, where Halifax sees great promise for cargo, has transportation infrastructure issues, and until those issues are dealt with to improve the flow of exports to its ports, the cargo boom here will not happen soon.