HALIFAX, Nova Scotia – The trend towards moving production to South East Asian countries such as Vietnam presents considerable freight volume growth opportunities for the port of Halifax because that region is more likely to use the Suez Canal to access the North American market, says Claude Mongeau, president and CEO.
Mongeau, the luncheon speaker at Port of Halifax’s heavily attended Port Days event, explained that while it may be more logical for goods produced in China to be shipped to North America via West Coast ports, it makes more sense to move goods produced in South East Asian countries via the Suez Canal and Halifax is strategically positioned as the first port of call for the North American market.
“We have an opportunity to get more of the South East Asian trade if we can work together,” Mongeau said, adding that CN already has agents in several countries in the region to ensure clients are aware of this routing.
Getting a larger portion of Asian trade is critical Mongeau said because European trade, the Atlantic region’s traditional staple, is a long way from coming back thanks to the economic slump the European Union remains mired in.
“I suspect it will take years to get growth from Europe,” Mongeau said, adding it could be three to five years or longer.
In 2012, nearly half (48%) of the containerized trade crossing the docks at the Port of Halifax involved imports from or exports to the Asian market. Europe share’s was 38%.
Continuing to grow the Asian business for Atlantic Canada, however, will require a strategy to combat the competition from American East Coast ports which serve much greater population centres and which can leverage competitive sea and land distances between Asia and inland points. To place the challenge in perspective, whereas the Port of Halifax handles about half a million TEUs annually, the Port of New York/New Jersey handles 5.5M TEUs while Norfolk/Hampton handles 2.1M TEUs.
Mongeau believes the key to competing effectively is developing a solid “eco-system of collaboration” among supply chain partners, focused on providing an end-to-end view of the supply chains served.
“We have more capacity than we have traffic (in the Atlantic region). The challenge is to get more traffic,” Mongeau said. “…An eco-system of collaboration opens up opportunities for collaboration (among supply chain partners) because we see the world in the same manner. Our agenda at CN is to become a true supply chain enabler.”
Mongeau said CN’s collaboration agreements with the Halifax Port Authority and its two container terminal operators, Halterm Container Terminal Ltd. and Cerescorp Company Ltd., are “creating faster and more reliable supply chains, demonstrating the benefits of teamwork and generating positive responses from international shipping lines and their customers.”
The agreements dating back to 2010 were the first signed by CN, which has similar ones with all of Canada’s major ports and their terminal operators. The agreements contain standards and performance measurement mechanisms for the railway and its partners.
Growing freight volumes will also be dependent on coming to understand the special needs of specific sectors and driving investment towards those sectors, Mongeau said.
Reefer service is an example. CN has redesigned its entire reefer service to better address customer needs and Mongeau said temperature-sensitive cargo is a growth opportunity for the Port of Halifax as well.
“The Port of Halifax is well equipped to handle Cool Cargo, with over 1,000 reefer plugs now, compared to 500 just a few years ago. This has been a major effort at the Port to put Halifax in the big leagues for reefer traffic. CN has also invested significantly in new generator sets on containers, with GPS and remote-monitoring capability.”
Port Days continues tonight with a dinner expected to draw a large crowd.