Transshipment services make Montreal a viable option for reaching Asia
The Port of Montreal is working to further diversify the international markets it serves. Traditionally, the port served markets on the North Atlantic, but over the past 10 years its overseas scope has widened considerably.
Today, one container in three leaving or arriving in the Port of Montreal is transshipped. For example, an export container leaving the port aboard a medium-sized vessel might be transshipped at a Northern European port such as Antwerp or Liverpool, or a Mediterranean port such as Valencia, for onward movement aboard a mega-ship via the Suez Canal to markets in Asia or the Middle East. Or it might be transshipped at Freeport, Bahamas, for a final destination in South America.
“Ten years ago, who would have thought that the Port of Montreal would one day compete with West Coast ports for shipments to and from Asia?” said Sylvie Vachon, president and CEO of the Montreal Port Authority. “Thanks to transshipment services via the Suez Canal, the Port of Montreal today is a viable alternative to West Coast ports for reaching the Pacific Rim.”
In 2000, Northern Europe was the point of origin or final destination for 77 per cent of the containers moving through the port, followed by the Mediterranean at 19 per cent, and Latin America and Africa at 1 per cent.
Today, Northern Europe still remains the leading trade route with Montreal. It was the point of origin or final destination for 44.4 per cent of the containers moving through the port in 2013, followed by the Mediterranean at 20 per cent. But Asia, at 13.8 per cent, the Middle East, at 8.3 per cent, Latin America, at 6 per cent, and Africa/Oceania, at 4 per cent, are all now part of the port’s container mix. China alone now accounts for 7 per cent of the port’s containerized cargo traffic, and it is about to surpass dominant traditional markets such as the United Kingdom.
“It is interesting to see how Montreal has begun to get trade with Asia,” said Brian Slack, a geography, planning and environment professor at Concordia University in Montreal and an expert on maritime transport and intermodality. “With transshipment, I see opportunities in Montreal from South Asia – India and Pakistan – and the Middle East.”
On the import side, Montreal is a viable option to West Coast ports for Asian products, in particular for seasonal commodities with early production schedules, said Peter Sancho, senior vice-president of Total Logistics Partner (TLP) Ocean Consolidators Inc. TLP is a Canadian wholly owned freight forwarder specializing in import freight from Asia to North America. One of the platforms it has offered over the years is the concept of alternate gateways through varied gateway entry ports.
“This type of cargo is not time sensitive,” Mr. Sancho said. “The longer transit time (to Montreal) shortens inventory shelf times. There are additional cost savings to users.”
From an operational standpoint, rail requirements are not necessary for importers located in the Quebec region. “For other parts of Canada, Montreal is a major Canadian hub with multimodal options available,” Mr. Sancho said. “Certainly for Eastern Canada, these multimodal services would be much less costly than moving through Canadian Western ports.”
While transit times to Montreal from Asia are longer than mini-landbridge services through the West Coast and comparable to some all-water services to the Eastern Seaboard, “the sailing times and, by extension, transit times to Montreal are consistent,” Mr. Sancho said. “For mini-landbridge services, transit times can vary greatly. Winter 2013-14 has served as a perfect example, with regular delays exceeding one week. Adjusted rail capacity for the winter months, the occasional system breakdown, and by extension port congestion are very significant factors.
“The Port of Montreal, meanwhile, is within a six-hour radius of Canada’s manufacturing hub, with access to Canada’s two major railways and a wide selection of short- or long-haul carriers.”
Mr. Sancho said many major retailers enhanced their distribution networks significantly during the contract dispute at U.S. West Coast ports in 2002. “To minimize the impacts of future contract disputes, the major retailers expanded distribution centres across the Eastern Seaboard, which has had its challenges with both contracts and congestion,” he said. “I believe Montreal can position itself to be a very viable added option.”
On the export side, “Canada is resource rich and by extension exports primarily raw materials,” Mr. Sancho said. “The competition is global. Cost is critical. Supply chain efficiency is one cost factor that can be influenced, unlike currency valuation, for example.
“Montreal offers a competitive option with the major carriers offering direct calls. This is a huge factor in the availability of equipment. Again, with links to Canada’s two major railways, it has a solid support infrastructure. For shippers in Canada, particularly in the eastern half, and for the eastern and Midwest U.S., Montreal offers major shippers access to world-class carriers and services, covering key global destinations, and Asia is certainly not an exception.”
As part of its business development strategy, the Port of Montreal added in 2013 a Hong Kong-based representative in Asia to its representation in the United States and Europe. Jeremy Masters is working to develop markets in Southeast Asia and India.
Mr. Masters was president of Canada Maritime and worked for CP Ships prior to founding Shipping Masters (HK) Limited eight years ago. He lived in Montreal for 14 years and is extremely well acquainted with the port.
In Europe, Giulio Schenone and Alessandro Barberis, of the Genoa-based Medov shipping agency, represent the Port of Montreal. Their mandate is to develop the European market not only for cargo but also within the cruise industry.
The port’s representative in the U.S. is Detroit-based Donald Finnerty, of Knight Global Solutions. Mr. Finnerty has more than 25 years of experience in international transportation. Most notably, he has held senior positions with CP Ships and Canada Maritime. He was also president of Aseco Container Services.