Atlantica’s Rise
Brian Lee Crowley
HALIFAX- Reading the National Post, one might reasonably conclude the Port of Halifax is the end of the Earth, or at least the end of the line. Under the headline, “Shippers divert cargo to Halifax from Vancouver, despite longer voyage and higher costs”, a recent article implied Halifax is an expensive inconvenience forced on Asian shippers solely because of Vancouver’s congestion. Think again.
Major changes in shipping technology, and projected huge increases in shipping volumes, have now put the east coast of North America on the Pacific Rim. More: the Port of Halifax is emerging as a major gateway to the heartland of North America, and the only Canadian east coast port that can plug into these new developments.
Three trends are driving Halifax’s rise. One is the stunning increase in container ship capacity. The garden variety container ship carries up to 4,200 containers. These ships are the Port of Montreal’s bread and butter, for example e.
But the largest container ships now carry 9,500 containers. Ships with a 12,000 container capacity are not far off. These ships have a 50-foot draft and are so large that they exceed the maximum capacity of most ports and of the Panama Canal (hence their name: Post-panamax (PPM) ships). These ships cannot get up the St. Lawrence, for example. Halifax has a natural harbour with a 55-foot depth (65 in the channel), and is the only east coast port that deep north of Virginia.
The second trend behind Halifax’s growth is ocean shipping’s emerging “hub and spoke” network, similar to developments in air travel 20 years ago. Ever larger container loads are being concentrated on an ever smaller number of ports capable of accommodating these giant ships. The containers are then sent to final destinations by rail, truck and short-sea shipping to regional ports. Halifax is the only major Canadian east coast port capable of acting as a gateway for this traffic.
Moreover, the capacity of PPM ships makes it economical to ship by routes that would not make sense for smaller container volumes. Particularly relevant here is the so-called Suez Express route from China via India to the Suez Canal and on to North America across the Atlantic. Follow the shortest possible route from the Mediterranean to North America, and what is the first port you pass? Halifax. And that’s just as true for the 40% of world trade that takes place between the European Union and NAFTA as it is for the 7% of world maritime trade now using the Suez Express.
Most of these ships want to call at the Port of New York/New Jersey. But there’s a little problem. The Americans are spending a billion dollars not just dredging that harbour, but literally blasting a trench in the rock to accommodate PPM ships. Fully loaded PPM ships will not be able to enter that harbour until some time between 2009-2011, and even then it’s not a sure thing. In the meantime, the only way those ships can enter New York is if they stop at Halifax and significantly lighten their loads.
The third trend explaining Halifax’s strategic position on world trade routes is the vast growth in traffic transporting every kind of good. Port, rail and road infrastructure throughout North America is creaking under the strain. Many ports are at maximum capacity, and have difficulties getting containers out even if they can be unloaded. Halifax has capacity to spare and room to grow, although there is no disputing that both CN’s rail network and the road network into the United States are efficiency-wrecking bottlenecks.
Ironically, Americans are far more attuned than Ottawa to these global developments and their significance to Halifax and the bi-national trade corridor it serves. Washington is funding a transportation study of the region reaching from Halifax right through to the Ontario-New York border, a region increasingly known as “Atlantica — the International Northeast” (www.atlantica.org). The New York State Transportation Commissioner travels the world showing a video touting Buffalo as the gateway to the industrial heartland of North America because of its connections to Halifax. And before you sneer at Buffalo, remember it’s the second biggest designated Port of Entry to the U.S., behind Detroit but ahead of New York. Chicago is already one of Halifax’s largest container markets.
New management in Halifax is doing good work dragging the port out of the old public sector dark ages, but there is no doubt that a private sector operator would have moved more aggressively to capitalize on these opportunities, and existing port legislation makes genuine commercial thinking hard to put into practice. But increasing NAFTA integration, maxed-out infrastructure, growing global trade and Halifax’s unique capacities and strategic position make it an indispensable player if ever Atlantica is to realize its potential as a global presence instead of a continental backwater.
Brian Lee Crowley is the president of the Atlantic Institute for Market Studies, a public policy think tank in Halifax (www.aims.ca). He is co-author of Port-Ability: A Private Sector Strategy for the Port of Halifax.