By Tom Peters
CN Rail wants Halifax to become the port for the hinterland and to do that, Port of Halifax will require an efficient and competitive supply chain moving cargo, and the inclusion of two new liner services that have come to the port, says CN’s J.J. Ruest, Executive Vice-President and Chief Marketing Officer.
In a keynote address at Halifax Port Days, Ruest stressed that the speed of the train from Halifax to Toronto, Chicago and points into the U.S. Midwest is not enough to make Halifax competitive and play in the “big league” with ports like New York and Norfolk. He said dwell times for containers on the dock in Halifax are two-to-three days and that is “competitive if you do it on a consistent basis.” New York dwell times, he said, are about five days.
“If you come to Halifax as the first port of call, and you have a dwell time of two or three days before you leave for the Midwest and the second call is New York and the New York dwell time is about five days, if we don’t waste time at the dock in Halifax, then we will be in the Midwest before them,” he said in an interview. However, he said if Halifax has dwell times longer than three days, then the advantage of being first call is lost. Rail miles to Chicago from Halifax are twice as long as those from New York.
Ruest said Halifax must also be “price competitive” but suggested the price is usually already set, and competitive with other ports. “So how do we create something where we can make money at that price?” His answer was that the entire process chain needed to be optimized for speed. “If we have that, then we should be able to have better service than New York. We all depend on one another. The terminal can’t evacuate containers if it doesn’t receive a steady stream of cars, and visa versa. If the terminal does not work the ship in a reasonable time, then providing rail cars when the ship comes in is not a good use of assets.” He stressed it is important to all sectors of the supply chain to work together to achieve improvements.
Ruest said Halifax is also positioned to be the export port for the hinterland markets as well, and has improved that position with the addition of two new services and larger vessels calling the port. The G6 Alliance has added an outbound call from Halifax to its Asia Suez Express service and CMA CGM line, part of the O3 Alliance, is now calling Halifax as a first port of call on its Columbus loop. Ruest said these alliances “have taken a risk” to start calling Halifax.
“We have to help get more import and export cargo and get more into the hinterland,” he said. For Halifax cargo to grow and to keep the bigger ships coming, there must a strong effort as a team to gain more business from hinterland markets like Ohio, Indiana and Chicago, he said.
During the conference’s first business session on Innovative Partnerships and Global Supply Chains, Matt Davison, a Senior Vice-President with Loblaws Ltd., Canada’s largest retail operation, said Loblaws is looking at renewing its relationship with Port of Halifax after an absence of a number of years. Loblaws moves 21,000 TEUs a year through West Coast ports but port labour issues there have caused problems for Loblaws. “We need an alternative risk strategy and Halifax provides us with that,” Davison said. Loblaws has started moving approximately 1,000 containers a year over Halifax and Davison said the long term plan is to get to 10 to 12 per cent of the total containers it brings into Canada through Halifax.
In the second business session on the subject of the yet-to-be-ratified Canada-European Union trade agreement, David Chaundy, Senior Economist with the Atlantic Provinces Economic Council, told delegates the agreement will present opportunities for Atlantic Canada firms. The EU presents a very large diverse market with over 500 million consumers, he said. Chaundy offered some advice to firms looking at the EU once trade becomes more open. He suggested companies look at risk factors such as the 24 languages and 28 member states; the use of nine national currencies including the Euro; the need to monitor regulations at both the state and national levels; the importance of having value chains structured into an industry and look at where potential markets are located. Chaundy said there will likely be some fairly immediate successes once the agreement is ratified, but expects it will take some before the full impact of the agreement is realized.