As if losing another container customer was not enough, the Halifax Port Authority (HPA) recently had to respond to criticism from an unsuspected, high profile source in the local community.
The public broadside came from former port chairman Merv Russell following the decision by Illinois-based Caterpillar Inc. to shift its container shipments to Europe from Halifax to Portsmouth, Va. due to inconsistent service on the CN railway network during the past severe winter.
This meant the immediate loss of 25,000 TEUs of container business. Already, the Port of Halifax had seen its container volume diminish to 490,071 TEUs in 2007 from 530,000 TEUs in 2006 and more than 550,000 TEUs in 2005. And the first quarter 2008 numbers are reportedly confirming a downward trend.
Main negative factors in the past few years have been global carrier restructurings involving Maersk and Hapag-Lloyd and the loss of China Shipping calls. Then, early this year, Icelandic carrier Eimskip suspended a New England feeder service that was launched in July.
In March, Russell alleged that “the only announcements out of the port are about real estate. You don’t hear anything about new clients -you only hear of clients leaving.”
At her annual state of the port address to the Halifax Chamber of Commerce, HPA president and CEO Karen Oldfield came out fighting, declaring: “Let me set the record straight -the management team at the Port of Halifax does not think it is a real estate agency.”
Oldfield said that the deepwater Nova Scotia port will continue to give priority to increasing its container cargo business as “Canada’s gateway to the hottest markets in the world.”
“We are working very closely with CN and with the shipping line, ACL,” Oldfield said. “The issues are being addressed and Caterpillar could -I stress could -return to Halifax, because it makes business sense for the customer. But there is no guarantee. And this one shipper demonstrates how absolutely dependent we are on every link of the supply chain working perfectly.”
The Port of Halifax, Oldfield recalled, is generally affected by such factors as industry consolidation, the weakness of the US dollar, expansion moves at US east coast ports, and a small local population. ” So 70% of what comes to Halifax by ship goes out to other markets in Montreal or Toronto, or the US Midwest by rail.”
Instead, she said, “Halifax is really a landbridge to other, lucrative markets. And what links us to those markets is CN.
“CN is our lifeline -plain and simple. We rely on them and they rely on us. When we have a setback, they have a setback. So when a shipper decides to stop using CN rail over a service issue -as recently happened with Caterpillar -CN’s problem became our problem.”
Pointing to important developments at competing ports on the US eastern seaboard, Oldfield listed these elements:
“Ports like Norfolk, Va., with a new 400-acre state-of-the-art terminal and a $400-million rail upgrade straight through to Chicago paid for by the US government.
“Ports like Savannah, Ga., where every level of government came together around a strategy tying cargo growth to the retail sector.
“Even New York/New Jersey, where the US Corps of Army Engineers has spent billions of dollars on dredging, and the Port Authority itself is spending millions to upgrade the on-dock rail.”
Traditionally, the North Atlantic trades have generated most of Halifax’s container cargo. Over the past few years, Halifax has been promoting itself as an uncongested North American gateway of choice via the Suez Canal for shippers in India and Asia. It lists such advantages as being 1,500 nautical miles closer to India than any west coast port and a full day closer to Southeast Asia than any other east coast port. Port officials report some progress in growth markets like China, the Far East, South America and the Caribbean.