BY BRIAN DUNN
Despite a shipping industry still struggling to get back on its feet, many Canadian port terminals are enjoying modest or strong growth and are investing in their operations.
For the last couple of years, things have been going very well for Logistec Corporation which means that its biggest task will be to keep that momentum going. “Our results for 2013 will be better than 2012, which was an excellent year,” said Madeleine Paquin, President and CEO. “We benefitted from increased activities in all our businesses in 2013, so much so that our biggest challenge is to surpass those results in 2014.” For the first nine months of 2013 revenues from both its marine services and environmental services operations increased to $218.8 million from $183.2 million a year earlier. This does not include joint venture businesses, which also performed well. Net profit attributable to the owners of the business was $20.9 million versus $9.3 million for the same period of 2012.
Logistec operates 42 terminals in 30 ports in Canada and the U.S., including three facilities in Montreal and one in Contrecoeur. It provides bulk, breakbulk and container cargo handling services. Cargo handled typically consist of forest products, metals, dry bulk, fruit, grain and bagged cargoes, project cargo and other general cargo. The company also offers marine transportation to some 40 northern communities with four vessels through its Nunavut Eastern Arctic Shipping subsidiary. All are multi-purpose, ice-class ships capable of carrying containers as well as general and project cargo.
Logistec has 1,420 employees which includes full-time-equivalent longshoremen whose services are retained under multi-employer jurisdictions to complement its full-time employees.
To ensure future growth, the company continues to invest in all its facilities, said Ms. Paquin. Examples include Logistec’s expanded container operations in Saint John where it serves Mediterranean Shipping Company and Tropical Shipping, building a warehouse for its joint venture with Ray-Mont Logistics called Mestco Terminal Inc., located in Montreal East, and upgrading loading facilities in various other terminals. “In the U.S., we will continue developing our biomass business with Georgia Port Authority in Brunswick as well as our logistics business in Virginia. Logistec is also focusing on the mining sector.”
Like a lot of companies involved in the mining sector, Logistec was hoping to cash in on Plan Nord, the former Liberal government’s ambitious $80 billion initiative to develop Northern Quebec. However, excitement has dwindled, due to lower commodity prices and because the new Parti Québécois government has put it on the backburner for now. Opportunities still exist, however, and Logistec has been successful in positioning itself to handle bulk iron ore and other minerals in the Plan Nord region.
In terms of port logistics, Logistec has expanded its offerings in Montreal, Virginia, Saint John and Halifax. In 2014, Montreal will benefit from inside storage capability being built at its Montreal East Mestco facility. Here, value-added services include stuffing and destuffing from rail and road, drayage and other specialized requirements by shippers. The major commodities it handles include metals, paper products, granite and wood. “It allows us to stuff boxes outside for customers of carriers at the port for export, but in the spring we’ll build a warehouse adjoining the CN rail siding. The drayage will be relatively cheap as we’re close to the port.”
In terms of overall operations, some facilities are doing better than others.
“That’s the beauty of this business, it’s always changing. Some facilities will have a bad period, but then will rebound. The diversity of our cargo helps the company. We’ve always turned a profit since the company went public in 1969, because we’re always creating solutions for our customers,” Paquin said.
In terms of its bulk business, Ms. Paquin sees growth opportunities in mining and biomass, whereas its breakbulk operations will continue to be a smaller but still important part of the business. The container business will continue to grow through its strategic alliances with MSC and NYK for which companies Logistec provides container handling and logistic services.
Before the trend to containerization, breakbulk and other general cargo accounted for up to 89 per cent of Logistec’s business, according to the company. Now that share has dropped to about 30 per cent, although it remains important to Logistec.
Montreal Gateway Terminals
Montreal Gateway Terminals (MGT) has two container terminals located at sections 62 and 77 which together handle some 800,000 TEUs annually, or about 65 per cent of Port of Montreal’s business, according to CEO Kevin Doherty. It has about 90 full-time employees at its two terminal offices, along with 60 maintenance workers. The number of longshoremen working on its premises ranges between 200 and 600 depending on the time of year. The terminals are operating at about 65 per cent capacity, said Mr. Doherty.
MGT is owned 80 per cent by American investment banker Morgan Stanley, and 20 per cent by Hapag Lloyd. Last year, the company revamped its entire surveillance system by installing a new state-of-the-art camera surveillance system, replacing an older analog camera system, which allows both railcars and trucks to be monitored at both MGT terminals.
One of its clients is St. Lawrence Coordinated Service (SLCS), a shared container service operated jointly by shipping lines OOCL and Hapag-Lloyd, which calls on MGT weekly. In addition to SLCS operators, MGT’s other container carrier clients include Maersk, Hanjin Shipping, CMA CGM, and Mediterranean Shipping Company. The terminal operator also handles breakbulk cargo for Canada States Africa Line and offers ancillary services such as container stuffing, de-stuffing, and flat rack container services. Last year, MGT completed a $5-million investment on a new reefer park at its eastern terminal and plans to spend about $3 million within the next two years on a similar project at its western terminal. It also plans to replace half of its 18 rubber-tire gantry cranes over the next several years at a cost of about $2.5 million each. Some of the cranes are over 15 years old, noted Mr. Doherty.
In terms of business, last year was marginally better than 2012 which was a “good year, given the economic circumstances,” he said. “With the U.S. and European economies recovering, we’re optimistic we’ll see 3-4 per cent growth this year. There are early positive signs in January that we’ve never seen before.” But it won’t until 2015 or 2016 before the shipping industry returns to pre-2008 levels, Mr. Doherty predicted.
Empire Stevedoring was founded in 1931 in Montreal by Sam Chodos with 12 employees. The company is now headed by Sam’s grandson Andrew who took over from his father Ted in 2010. In addition to Montreal, operations have expanded to Halifax, Saint John, Toronto and Thunder Bay as well as Houston, New Orleans, Baton Rouge and Mobile, Alabama, and employment has grown to 60 full-time workers along with about 200 stevedores on contract.
In 2012, the company invested heavily in its Halifax operations, replacing and modernizing its fleet of four high container top picks to better load cargo such as rails and flexible bulk containers, and handle containers and project cargo through the port. It added Ro/Ro equipment and Mafi diesel tractors for shunting containers and semi-trailers to handle the added demand of special project cargo, including locomotives and windmill turbines. Empire has also expanded its fleet of small-sized forklifts to handle increasing volumes of inbound nickel packed in flexible bulk containers, and is experiencing strong demand in general cargo stevedoring, handling various steel products (rails, beams, wire, rods, and coils), and Ro/Ro cargo. It also handles grain and wood-pellet exports through the Halifax Grain Elevator.
Empire expects to see new opportunities in project cargo and steel imports from the $73 million expansion of Halifax’s Richmond terminal planned to be completed this year. The expansion includes 1,500 feet of new dock, as well as upgrades to the terminal’s breakbulk sheds. In addition, the company is hoping for new business from the Canadian government’s frigate replacement program awarded to Irving Shipbuilding Inc., according to Empire’s Halifax General Manager, David Tremblay.
During the past few years, Empire has invested $5 million in non-container handling equipment at its facilities, with about 75 per cent of that investment going to the U.S. operations, according to Mr. Chodos. Another $5 million is being invested at its Montreal container terminal for yard equipment.
Empire handles about 110,000 TEUs annually at its Montreal facility, 750,000 tonnes of general cargo, 250,000 tonnes of scrap metal and about a million tonnes of bulk cargo, and a similar amount of grain throughout the rest of the company’s operations. The breakbulk business is pretty steady and has even recovered to pre-recession levels in the U.S., particularly at Port of Houston, said Mr. Chodos. “In Canada, the ports in which we operate have pretty much recovered, although we’re not seeing as much in steel products.”
The overall business has improved every year over the previous year “the further away we get from 2008. Our throughput has gone up substantially and is now pretty steady. I expect the biggest growth to come from Houston, Montreal and Halifax. We expect to see improved numbers between Montreal and Newfoundland, because of a larger Ro-Ro ship being operated by Oceanex.”
Termont Montreal, which celebrated its 25th anniversary in September, 2012, is operating at 100 per cent capacity, handling some 490,000 TEUs of container traffic a year and is bursting at the seams, according to General Manager Roger Carré. The company, located at the Maisonneuve Terminal, already leases about 50 acres of land from the port and still needs more space to accommodate growth. “We’re still negotiating for more land with the port to put in another container terminal that can handle another 300,000 TEUs. We need about 15 hectares. That would require an investment of between $45 million-$50 million.”
Termont is owned by Termont Terminal Inc. (owned by Logistec Stevedoring Inc., a wholly-owned subsidiary of Logistec Corporation, and Cerescorp Company) and Cortelina International Corp. It recently completed a five-year investment of $50 million for equipment upgrades and a new head office which houses a staff of 32.
Termont handles about 40 per cent of the port’s business, second only to its next door neighbour, Montreal Gateway Terminals Partnership, according to Mr. Carré. Its biggest client is MSC, followed by Hapag Lloyd and OOCL through their North Atlantic Service. On a busy day, there can be upwards of 250 people working on the premises, including mechanics, stevedores, checkers and electricians. Termont is the only Montreal terminal that can handle post-Panamax vessels with 17 containers across the deck compared to the standard 13, Mr. Carré noted.
Business last year was about the same as in 2012, but Mr. Carré is hoping to see an increase of between 3-4 per cent this year, coming from North America, Europe and the Far East. His plan to retire is on hold as his firm continues to search for his replacement.