By Tom Peters
The federal government’s ban on cruise ships entering the country’s ports for the second straight year indicates an obvious need for diversification of revenue streams for some ports in Atlantic Canada, especially those that depend heavily on dollars generated by the cruise sector, including four in the Maritimes.
Halifax is the premiere destination for the Canada/New England itinerary. The latest figures, reported in 2019, stated the cruise industry in Halifax had an overall economic impact of approximately $165 million, said Lane Farguson, Manager, Media Relations for Halifax Port Authority (HPA).
In 2019 Halifax welcomed over 323,700 passengers on 179 vessel visits. Although the number of ship visits was fewer than in 2018, the ships are getting bigger, carrying more passengers and generating more revenues at the ports for fuel, vessel fees and supplies.
Saint John was gearing up for a best-ever cruise season in 2020 expecting over 90 vessel calls from 15 different lines and over 200,000-passengers. That obviously did not happen and even though Port Saint John did not discuss economic impact in its recent statements, there were obvious declines in revenue.
“This year would have been a similar year, but the schedule was never announced and we did not budget for cruise revenues being part of our 2021 year based on the pandemic situation,” said Paula Copeland, the Port’s Director, Communications and Social Responsibility. “Fortunately, we are a diverse port and weathering any impacts on our revenue is manageable. The greater impact would be to tour operators and suppliers (restaurants, activities, retailers, and attractions),” she said.
Port Saint John, said in a statement it is working closely with the Association of Canadian Port Authorities (ACPA) Cruise Committee. Together our industry is optimistic that, when the time is right and it is safe to do so, cruise will be back. At that point we will look forward to welcoming cruise lines, their guests and crews back to our port cities and local communities,” the statement said.
Port of Sydney took a major hit with the loss of cruise revenues, says Marlene Usher, CEO, Port of Sydney Development Corporation. In 2020 lost revenue to the port was $2.2 million, with the same number forecast for 2021. “This represents approximately 68 per cent of our revenue,” said Usher. “In 2020 we anticipated 116 ships and in 2021 we had anticipated 131 ships to call on our port. Bookings for 2022-2026 are strong,” she said. “The economic impact, direct and indirect, that benefits our region is in the range of $60 million annually depending on the year. Besides the port there are many other groups who are impacted by the loss of two cruise seasons such as bus suppliers, tour operators, museums, crafters, retail shops, restaurants and many others,” Usher added.
In 2019 Charlottetown had a record breaking year receiving over 128,000 passengers and 55,000 crew generating over $21 million in direct economic impact. This was a 31.5 per cent increase over 2018 numbers, says Mike Cochrane, CEO, Charlottetown Harbour Authority. “For 2020, we were expecting another record breaking year for Port Charlottetown with 155,000 passengers and 75,000 crew generating in excess of $25 million in direct economic impact. This would be a 21 per cent increase over 2019,” Cochrane said, adding 2021 was also expected to be a big cruise year.
Cochrane said Charlottetown’s South Berth expansion project reached substantial completion in the fall of 2020. The expansion allows the port to berth two large vessels simultaneously. “For Port Charlottetown, cruise and cruise related revenue account for more than 60 per cent of our business and we are always looking at ways to diversify,” Cochrane said. “As the marine gateway to Prince Edward Island, the port remains an efficient mode of transportation for importation of commodities such as gravel, stone, fertilizer and petroleum,” he added.
In response to the COVID-19 pandemic, Charlottetown has a voice in the ACPA cruise committee and will be ready to welcome the reopening of cruise activity when the time is right.
Halifax Activities
Fortunately for Port of Halifax, cruise is just one of three main revenue streams with cargo, specifically container cargo, and real estate being the other two. Spokesman Farguson said 2020 was shaping up to be a challenging year even prior to the pandemic. The port lost approximately 4 per cent of its container cargo when the Northern Pulp mill in northern Nova Scotia was closed in January. That was followed in February by the challenges brought on by rail blockades across the country.
“We were getting through that when Covid started to rear its head,” Farguson said. “Overall, the pandemic created a slowdown in containerized cargo in the first half of 2020 with reduced manufacturing and port activity in Asia and in other parts of the world. Then in second half we saw the surge as supply chains started to come back. Overall, we were anticipating a decline in cargo in the 10 per cent range and the same thing in revenue, but we actually wound up a little bit better than that, closer to an overall drop of 7.2 per cent on the container cargo. So we finished stronger than expected,” Farguson said.
In 2020 HPA completed the major $38 million, 134-metre extension to its Southend container terminal and saw the installation of a new, super Panamax ship-to-shore container crane by terminal operator PSA Halifax. The crane can span 24 containers and easily handle the 15,000 TEU (20-foot equivalent units) ships that are now calling the port.
“Completion of the extension and the crane came at an opportune time when cargo blossomed again,” Farguson said. “Certainly being able to complete those projects in that time frame has been very beneficial and gives us flexibility going forward,” he said.
MSC’s ultra-large ships will benefit from Halifax’s upgrades, as the line recently announced upgrading its West Mediterranean-Canada service with the addition of a double port call at Halifax. The addition of Halifax will offer Canadian exporters the possibility to export cargo to anywhere in the Mediterranean, as well as to the Middle East, Indian subcontinent, Asia and Oceania via Barcelona and Valencia, two key Mediterranean transshipment hubs.
HPA also faced real estate challenges this past year with the closure of the Halifax Seaport Farmers Market mainly because of the pandemic. “We had a phased-in reopening and have had it open since, but that did create some challenges and impacted the plans we had for the market to find an independent tenant/operator,” Farguson added. “We had to revise our plans so that, starting in March, it will be a weekend only market,” he added.
HPA has committed to reducing the number of trucks that move through the downtown core headed to and from the Southend container terminal. To that end, there are two infrastructure projects underway, a new Marine Container Examination Facility (MCEF) and associated access route to Fairview Cove Container Terminal and a rail shuttle project to move more containers between the Southend and Fairview Cove terminals at the northend of the port.
An appropriate MCEF within the port is required to optimize rapid and reliable container inspections by Canada Border Services Agency (CBSA). The Port, in collaboration with Halifax Regional Municipality, CBSA, its container terminals, CN, municipal planners and key stakeholders, envisions building a new MCEF on port land next to the Fairview Cove terminal. This project would reduce container truck movements and the time it takes between the existing facility across the harbour in Burnside Industrial Park. This project would also reduce truck movements through downtown Halifax.
The rail shuttle plan could reduce truck traffic through the city by as much as 70 per cent. The project will utilize the present CN rail cut to connect the two terminals and have containers moving to the Southend terminal loaded and unloaded from truck to rail in a marshalling area in the Fairview Cove area.
Port Saint John busy
Despite the pandemic, Port Saint John’s overall cargo tonnage in 2020 increased to 25,984,654 metric tonnes (MT), a 2 per cent increase over 2019. In the container sector, volume increased to 79,179 TEUs (a 15 per cent increase over 2019) and tonnage increased to 580,279 MT (a 19 per cent increase over 2019), making it the fourth consecutive year of growth in the port’s container activities. In addition to the increases in cargo, a number of major developments contributed to the port’s positive outlook. Construction of the $205 million West Side Modernization Project continued throughout the year. The project was launched early in 2020 and is due to be completed in 2023.
CP Rail launched its East Coast Advantage strategy. CP, through the acquisition and improvement of the former Central Maine and Quebec Railway (CMQR) solidified Port Saint John’s position as the only Atlantic Canadian port with two Class I national rail providers. In addition to CP’s new presence in the port, Hapag-Lloyd will begin a container service at Port Saint John this year. Hapag-Lloyd is a leading global liner shipping company with 234 modern ships and 12 million TEUs transported per year. “We are extremely pleased with Hapag Lloyd’s decision to join the suite of container services that is building at Port Saint John and we are looking forward to establishing a long-term relationship with another global container service provider,” said Jim Quinn, CEO, Port Saint John.
Curtis Doiron, General Manager at the port’s terminal operator, DP World, said, “We are pleased to welcome CP Rail, Hapag-Lloyd, and its partners to our port community in 2021. Attracting another major group of global container line carriers is aligned with our long term growth strategy and we look forward to working closely with Hapag-Lloyd in establishing a successful product offering here in Saint John.”
New Opportunities in Sydney?
Because of the temporary loss of its cruise business, Port of Sydney realizes the need to be open and to develop other opportunities. “Retail shops who are tenants will be open for the 2021 summer/fall season despite the lack of cruise activities,” said Marlene Usher. “Currently, Port of Sydney is developing a waterfront plan for residents and tourists which will increase retail, food and community gathering opportunities both at the port and along the boardwalk. The Port recognizes the need for growth outside of cruise revenue and to improve upon the Sydney waterfront and downtown core. Development plans are advancing,” Usher added. “In addition to attracting cruise, this plan will enhance the downtown and waterfront areas by being more welcoming to residents and tourists and provide the boating community a more attractive waterfront to visit,” Usher said.
“A redevelopment of Pittman Hall (in the Joan Harriss Cruise Pavilion) will bring the community and port together. This neighborhood emporium will have an international market which will support the Nova Scotia Community College student population and residents and visitors,” Usher said. With the addition of the now complete second port berth named Liberty Pier, the port has double the capacity, and is working to broaden the supply of services which will attract other non-cruise vessels for cargo and or service.