Carriers able to increase capacity on their services through port

Numerous vessels already have benefited from a decision allowing post-Panamax-type ships to sail to Montreal. The Canadian Coast Guard (CCG) authorized last May the passage of vessels up to 44 metres wide in the Quebec-Montreal section of the St. Lawrence River navigation channel. The previous authorized width was 32.1 metres without restrictions.

The CCG made the provisions following a study commissioned by the Montreal Port Authority (MPA) and conducted jointly with Transport Canada, the CCG, the Laurentian Pilotage Authority and the Corporation of Central St. Lawrence Pilots.

“This decision is good news for the port, for our shipping lines, and for the shippers who move cargo through Montreal,” said Sylvie Vachon, the MPA’s president and CEO. “It will allow the Port of Montreal to strengthen its position as North America’s leading port for container traffic with Europe, and it will reinforce Montreal’s strategic position as a logistics and transportation hub of choice for all types of cargo.”

Specifically, the new provisions make it possible for all post-Panamax-type vessels, including 6,000-TEU (20-foot equivalent unit) container ships, to reach Montreal. The port can also now accommodate oil tankers with a cargo carrying capacity of 500,000 barrels, up from 350,000 barrels, and dry bulk ships that can transport 65,000 tonnes of cargo, up from 35,000 tonnes.

“Shipping lines, no matter what type of cargo they carry, will be able to substantially increase capacity on their services to Montreal, which will inevitably lead to benefits for the port’s broad customer base,” Ms. Vachon said. “We hope that carriers will take full advantage of the fact that the Port of Montreal can now accommodate post-Panamax-type vessels.”

A total of five vessels, over the course of six different calls, already have benefited from the new provisions. Three of the vessels are Aframax oil tankers, including the largest petroleum tanker to ever visit the port. The MT Overseas Portland, carrying 475,000 barrels of crude oil, docked at the Suncor berth at Section 109 on December 5. It had sailed from St. James, Louisiana, on November 26. Built in 2002, the 112,139-deadweight-tonne MT Overseas Portland is 250.2 metres long and 44 metres wide.

The two other Aframax oil tankers visited the Canterm berth at Section 94. They are the NS Leader, which arrived on August 12, and the NS Concept, which called on July 12.

The P-MAX Stena Progress, an oil tanker that also sailed to Montreal under the new regulations, visited the Canterm berth on two separate occasions, on May 7 and August 18.

The fifth vessel to benefit from the new provisions is the LBC Energy, a bulk carrier that loaded grain at the Port of Montreal’s grain terminal on October 20.

“The Canadian Coast Guard provision allowing wider vessels to sail to Montreal is a big breakthrough for the port,” said Brian Slack, a geography, planning and environment professor at Concordia University in Montreal and an expert on maritime transport and intermodality. “(In the container sector), shipping lines base their operations on slot costs and how many containers they can load onto a ship. Using larger ships allows carriers to benefit from economies of scale, leading to greater profitability.”

With the minimal depth of navigable waters to Montreal currently at 11.3 metres, the decision also allows the port to better compete with U.S. rivals that are “dredging like mad” to accommodate bigger and bigger container ships, Mr. Slack said.

“Larger ships should provide economies of scale, which should lead to operational efficiencies and hopefully lower costs,” said Christopher Gillespie, president and CEO of Gillespie-Munro Inc., a full-service Canadian freight forwarding firm based in Montreal. “But if these ships enter a low-demand, oversupplied market where rates are already depressed, these economies are probably viewed by carriers as simply a way for them to make ends meet under current circumstances.

“The potential, though, is to enable more commodity cargoes to move from the Port of Montreal at prices equivalent to those where such higher-capacity vessels currently serve.”

The average size of container ships sailing to Montreal has increased by a factor of eight since 1975. The largest ships calling the port back then carried up to 750 TEUs. That number increased to 1,800 TEUs in 1981, and 2,800 TEUs in 1996, as container ships were redesigned. In 2003, OOCL and the former CP Ships built and assigned to their Montreal routes 32.1-metre-wide Panamax-size ships capable of transporting 4,100 TEUs.