By Brian Dunn
Port of Montreal
When the pandemic hit last March, any hope by anyone connected with the port of Montreal that it could surpass the records of 1.75 million TEUs and 40.6 million tonnes of total cargo that it set in 2019 evaporated. The pandemic, coupled with the rail blockade in February, 2020 and a 17-day strike by longshoremen last summer, removed any doubt. The three events which Tony Boemi, Vice-President, Growth and Development, Montreal Port Authority, called the “Triple Crown,” combined to see a 13 per cent drop in overall business at the port in 2020, from 40.6 million tonnes in 2019 to 35.1 million tonnes. He also doesn’t expect to hit the 40 million tonne mark this year either.
About 19,000 direct and indirect jobs depend on the port, ministers from Quebec and Ontario said in a joint letter written last summer. According to Statistics Canada, the backlogs and delays caused by the strike deprived wholesalers of $600 million in sales over a two-month period. In addition, a survey conducted by the Canadian Federation of Independent Business reported that 40 per cent of Quebec small and medium-size businesses suffered negative impacts due to the work stoppage. And over 20 container ships were diverted to competing ports, affecting 80,000 TEUs. It took a total of more than three months to bridge the delays and return to normal operations. On a positive note, container traffic only decreased 5.5 per cent and has recently bounced back significantly, according to Mr. Boemi.
Breaking down the different sectors reveals that container traffic dropped from 1.75 million to 1.60 million TEUs last year, bulk was down 11 per cent and liquid bulk off 22 per cent. Grain was down 18 per cent at the beginning of the year due to the rail blockade, but recovered to end the year down only 1.1 per cent. Cruise operations were non-existent in 2020 due to Covid and will not resume until 2022 at the earliest, according to the federal government.
“Nobody expected a strike during the pandemic and it took 85 days to recover from the 17-day work stoppage,” said Mr. Boemi. “Early indications for the current year see most sectors bouncing back quickly except for liquid bulk, but the labour truce ends March 21 and a lot of shippers and importers, fearful of yet another strike, have already deviated cargo.” Business destined for the U.S. Midwest, mostly automotive, saw double-digit growth in 2019, but declined 17 per cent last year due to the port strike.
In June, work is expected to begin on increasing the port’s rail network by 20 per cent as part of a three-year project, at a cost of $55 million. The upgrade includes increasing tracks and creating a larger apron. The project will have a positive impact on grain shipments and intermodal operations, according to Mr. Boemi.
Three consortiums have been shortlisted for the design and construction of the port’s new Contrecoeur container terminal. The qualifiers are: Ancre Contrecoeur, represented by Dragados Canada, with which AECOM Consultants is associated; CAP Contrecoeur, composed of Eurovia Québec Grands Projets, Janin Atlas, Soletanche Bachy International and VINCI Infrastructure Canada, with which GHD Consultants, COWI North America and CH2M Hill Canada are associated; Kiewit-Pomerleau, composed of Construction Kiewit and Pomerleau, with which CIMA+, Englobe, Hatch and Solmatech are associated.
Construction of the estimated $750 million project is expected to begin in the fall. Once completed in 2024, the terminal should be able to handle 1.15 million containers annually.
Montreal Gateway Terminals
The Triple Crown that Tony Boemi alluded to naturally impacted all port operators, including Montreal Gateway Terminals (MGT) which celebrated its 50th Anniversary last year. But the terminal has mostly recovered from those challenges, according to Michael Fratianni, President and CEO. “The operating systems in Montreal are pretty resilient and the recovery would have occurred earlier had it not been for the port strike. There is a level of optimism for at least the next six months, but it depends on the world economies.”
The strike shouldn’t have any long-term impact on the port’s reputation or business, suggested Mr. Fratianni, “All strikes have some lingering effects, but Montreal has natural advantages and we need to help shippers regain their confidence in us.”
Last year, MGT handled between 950,000-975,000 TEUs. Mr. Fratianni hopes to get back to that level at some point this year, helped by the increased delivery of medical and pharmaceutical supplies along with agriculture and temperature sensitive cargo. In 2019, the company announced investments of $100 million for new equipment and technology improvements through to this year. About $35 million of new equipment has already been delivered, including ten Liebherr electric rubber-tired gantry cranes. Yet to be delivered are four postpanamax ship-to-shore cranes which will account for most of the remaining $65 million investment. The four ship-to-shore cranes will be able to handle 21 containers across the deck compared to 14 on existing cranes with a capacity of 65 tonnes of payload. The ship-to-shore cranes will allow MGT to handle larger vessels such as OOCL St. Lawrence which docked at MGT last October, one of the largest ships to call at the port with a capacity of about 4,500 TEUs. It replaced the smaller OOCL Belgium on shipper’s service between Montreal, Antwerp, Bremerhaven, Le Havre and Liverpool.
Mr. Fratianni remains optimistic about the current year with all the fundamentals in place and despite the protectionist rhetoric. “Our number one priority is gaining back the luster we had. We need to work collectively together to achieve that.”
Like MGT, Termont Montreal was impacted by Covid, a rail blockade and a longshoreman’s strike last summer, but managed to recover any lost business by the fourth quarter of 2020. How 2021 will shape up is still up in the air, according to Termont General Manager Julien Dubreuil.
While Covid vaccines will certainly be a plus for business optimism going forward, the threat of another strike by longshoremen has some shippers already opting to move cargo through other ports. “There was a shortage of rail cars during the August strike, because they were sent to other ports, while several vessels waited upriver which created congestion once the strike ended. Some shippers who were burnt once are looking to temporarily move discretionary cargo through other ports. I’m concerned the temporary move could become permanent.”
Work to expand capacity at its Viau Terminal is expected to be completed by the summer, said Mr. Dubreuil. It will add 250,000 TEUs of capacity, brining total capacity up to 600,000 TEUs. Termont is investing $30 million in the final phase of the project that will enable the development and growth of services for shipper MSC which accounts for most of Termont’s business.Part of the investment is for a ship to shore (STS) container crane and one Liebherr rail mounted gantry (RMG) crane. The new cranes will join five Liebherr STS cranes and eleven Liebherr RTGs already in operation at Termont.
After being operated as a family-owned business for 90 years, Empire Stevedoring was acquired earlier this year by QSL (previously known as Compagnie d’Arrimage de Quebec Ltee, or Quebec Stevedoring Limited) which specializes in port terminals operations, stevedoring, marine services and transport. The acquisition will allow Quebec City-based QSL to round out the range of services it offers by adding the extensive container handling expertise developed by Empire Stevedoring and increasing its geographic footprint in the Canadian and U.S. markets, said Robert Bellisle, President and CEO of QSL.
Having operated in Chicago for more than 15 years, QSL made inroads into the Gulf of Mexico market last year by acquiring facilities in Houston. Empire also operates in Houston, and in New Orleans, in addition to maintaining a strong presence in Canada, including Montreal, the Great Lakes and the Atlantic provinces. “In addition to increasing our presence in the U.S., this transaction, subject to regulatory approvals, will allow QSL to become the only port terminal operator and stevedoring company to have such a significant presence in both the Port of Quebec and Port of Montreal,” said Mr. Bellisle.
Founded in Montreal in 1931, Empire Stevedoring is a 4th generation family business, now run by Andrew Chodos who will remain President and CEO of the Empire Stevedoring division which will keep its name. The two companies have had a 40-year relationship after Empire acquired shares in QSL in 1980.
The port of Bécancour handled 3.8 million tonnes of cargo last year from 168 vessels, up almost 10 per cent from 2019 and representing the largest volume since the port was created in 1968. It received an unexpected boost in business when NEAS Group announced in January it will be serving its Arctic customers from a new expanded cargo service centre and bigger marine terminal at the port, ending a 20-year relationship with the port of Valleyfield where NEAS accounted for about a third of the port’s business. The arrival of NEAS will account for about 20 dockings a year, according to Maurice Richard, President and CEO of Parc Industriel et Portuaire de Becancour.
The decision by NEAS to leave Valleyfield reportedly resulted from a breakdown in negotiations to renew a contract between NEAS and the terminal operator, Valport Maritime Services. Neither side would comment. Suzanne Paquin, President and CEO, NEAS Group said, “NEAS customers will immediately benefit from efficiencies, improved cargo drop-off, enhanced packaging and innovative container services, expanded warehousing options, faster loading and mid-season ship turnarounds.”
The new cargo service centre at the port includes 113,000 square feet of secure warehousing (10 per cent heated) and over 1.5 million square feet of secure yard and lay down areas. The new marine terminal at the port boasts gated access to five berths, with drafts necessary for the current and future NEAS fleet. NEAS will be joining Desgagnés Transarctik which also uses the port for its northern operations.
Other developments in the Bécancour area including the construction of a $350 million plant by Nouveau Monde Graphite to produce anode materials for lithium-ion batteries, while Premier Tech and Virentia are investing $45 million to build a new alfalfa processing plant in the Industrial and Port Park.
After an “investment of several tens of millions of dollars”, French multinational Air Liquide has doubled its hydrogen production in Bécancour. With a capacity of eight tonnes per day, the Quebec facilities will be able to produce enough hydrogen to supply the growing market in Northeastern North America.
Not everything is positive, however. The suspension of the Keystone XL pipeline means Canadoil Forge, which supplies parent TC Energy with pipeline elbows and fittings, faces an uncertain future. Last October, Canadoil temporarily laid off 50 of its 120 employees due to the uncertainty surrounding the outcome of the U.S. election. With the cancellation of Keystone XL by the Biden Administration, it’s impossible to speculate on a possible recall.
Port of Trois-Rivières
In 2020, the port of Trois-Rivières handled cargo totalling 3.3 million tonnes. Although down from the record 4.2 million tonnes handled in 2019, it’s in line with the most recent five-year average. Shipments of 2.9 million tonnes of dry bulk, down from 3.6 million tonnes in 2019, accounted for 85 per cent of total shipments. Liquid bulk of 300,000 tonnes represents ten per cent of the total and general cargo with 170,000 tonnes represents five per cent. A total of 209 vessels docked at the port in 2020, down from 260 vessels in 2019, which included 25 cruise ships.
Last fall, the federal government announced a grant of $33.4 million for the construction of the $130 million Terminal 21. The terminal is part of the port’s “On Course for 2030” development plan and will increase capacity by nearly 50 per cent. Some 100,000 square metres of surface area and 716 metres of dock frontage will be added to the existing infrastructure with completion scheduled for early 2024. The project will allow the port to handle an additional 1.5 million tonnes of cargo annually.
The partnership between Ports of Trois-Rivières and Montreal, signed in 2018, reached an important milestone in 2020 with the deployment of three projects that will improve the maritime operations of both ports: the implementation of a common extranet portal to manage vessel arrivals, the harmonization of practices and procedures and the implementation of a common port access card for workers and visitors.
Port of Quebec
Port of Quebec maintained a significant business volume last year despite the slowdown in many parts of the economy. The 27 million tonne volume of merchandise handled was down seven per cent from the 2019 total of 29 million tonnes. The minor decline was due mainly to reduced petroleum product consumption associated with lockdowns and the economic slowdown. Volumes were relatively stable for iron ore, and new records were set for gypsum and cement imports.
Dry bulk linked to the agrifood industry jumped 54 per cent, offsetting the 2019 shortfall in merchandise traffic, which took a harder hit from the pandemic and other issues. Also part of the mix was the Port’s new partner Sollio Agriculture, which continued work on the grain export terminal that started operations in 2020. “The agrifood business was up significantly across the country,” said Port President and CEO Mario Girard. “It was up an average 27 per cent on the Seaway alone.”
Before the cruise ship season was cancelled, the port expected to welcome about 250,000 passengers and crew members in 2020. The Port continued construction of its $30 million cruise terminal at Dock 30 in the Estuary sector and a mobile bridge between the dock and the deck will be added in 2021.
The port and port operators invested about $125 million in infrastructure additions in 2020. The Sollio Terminal, the second cruise terminal and the repairs, restoration, and upgrades to the docks were the principal projects, all of which took some of the sting out of the region’s pandemic-related economic slowdown. The port also continued to move ahead with its Laurentia container terminal project, with the last phase of the Canadian Impact Assessment Agency’s public consultations winding up in December. (See separate story)
A decision by the Minister of the Environment is expected at the end of June and Mr. Girard is confident of a favourable response.
Port of Saguenay
A $9.5 billion liquefied natural gas plant being planned near the Port of Saguenay will have to find new backers after Warren Buffett’s Berkshire Hathaway pulled its $4 billion funding from the project. The decision was partially blamed on the “instability” created by last winter’s rail blockades, according to GNL Québec, the company behind the project. But the loss of Berkshire Hathaway’s backing won’t kill the project, said Tony Le Verger, Interim President of GNL Québec, because “Canadian and international investors who have supported the project since 2014 are still firmly committed to its development.”
In addition to construction of an LNG liquefaction “train”, storage facility and marine terminal, the project also involves the construction of a pipeline across a 782-kilometre stretch of the province from northern Ontario to Saguenay to transport natural gas from Western Canada. The goal is to export 11 million tonnes of LNG per year to overseas markets.
Granule 777, a division of Barrette-Chapais of Chapais, QC, shipped 100,000 tonnes of wood pellets to England through Saguenay last year. That figure is expected to double once full production is reached in the next few years. The pellets are designed to replace coal for power generation. Barrette-Chapais has also invested $ 18 million in its storage complex. Another 10,000 tonnes of pellets from Granules LG of St-Félicien were shipped to Italy from Saguenay.
Rio Tinto continues to be an important customer for the port, with imports of anodes and exports of aluminum products from four smelters in the Saguenay-Lac-St-Jean area, generating the movement of some 1,000 rail cars through the port annually.
BlackRock Metals wants to build a vanadium-titanium-magnetite concentrate processing plant in La Baie. It hopes to complete financing for the $1.3 billion project this year.
The port saw its revenue drop by $500,000 last year due to Covid-19 and the loss of the cruise ship season. Cargo handled in 2020 dropped 15 per cent from the record 645,200 tonnes of goods that transited the Grande-Anse terminal in 2019.
Saguenay is among the top three cruise ship markets in Quebec along with Montreal and Quebec City. The federal government’s decision to cancel the 2021 cruise season will be a major blow to the port, according to Carl Laberge, President and CEO, Saguenay Port Authority. “We’ve spent over $50 million over the last 10 years to improve our cruise infrastructure and we have seen strong growth year after year. In 2019, we welcomed 59,000 passengers.”
Port of Sept-Îles
After surpassing 33 million tonnes of shipments in 2020, the highest since 1974, the port of Sept-Îles expects another good year. Demand for high purity iron has continued to climb since the start of 2021, and prices have continued to rise. Although iron ore is the port’s principal commodity, port volumes also benefitted from a nearly 16 per cent increase in production at Alouette Aluminium’s smelter.
The rise in iron exports is associated with three iron ore miners, namely Tacora which operates the Scully mine, Champion Iron at the Bloom Lake mine and Rio Tinto IOC. Iron represents 92 per cent of the tonnage handled at the Port. CEO Pierre Gagnon anticipates strong results again this year, with projected shipments of 38 million tonnes. Currently, 50 per cent of the iron ore leaving the port goes to China and Japan. High-purity iron from the Labrador Trough sells for over U.S. $170 per tonne in Asia, up $20 since the start of the year. The price increase is attributed to a number of factors, including unprecedented demand in China for high purity iron, a decrease in supply from Brazil, and a political dispute between China and Australia.
In December, the Quebec government announced funding of $120 million to the Pointe-Noire Railway and Port Company in order to increase the capacity of its facilities. The funding is in the form of subsidies and loans and is directly linked to Champion Iron’s plan to double production of its Bloom Lake mine in the Labrador Trough by May, 2022, from 7.5 million tonnes to 15 million tonnes. This expansion will require investments of several hundred million dollars and add an estimated 375 jobs to the current workforce.
There’s more good news for the region. In late January, Labrador Iron Mines announced plans to reopen its Houston iron mine near Schefferville which closed in 2013 due to low commodity prices. The mine still contains 40.6 million tonnes of iron ore and the company plans to operate it for the next 10 years.