By Brian Dunn
Montreal
The port of Montreal reached an historic milestone in 2019 by surpassing the 40 million tonnes mark. The actual figure of 40.5 million tonnes was up 4.1 per cent from 2018 and marks the sixth consecutive year total tonnage has surpassed the previous year. The 1.75 million TEUs handled was also a record, an increase of 4.4 per cent from the previous year. Container traffic is expected to increase another three per cent this year, according to Tony Boemi, Montreal Port Authority Vice-President, Growth and Development. The strength of the container business was helped by a seven per cent increase in container activity between 2018-2019 in the U.S. Midwest, he added.
Last year was also highlighted by solid results on the bulk front. The dry bulk sector had a 15 per cent increase in tonnage with a total of 9.3 million tonnes, with grain up 109 per cent, while Liquid bulk remained stable at 16.2 million tonnes. The grain increase was an anomaly due to a nine-month lockout of operators the previous year at Viterra, one of the main grain marketers at the port, and compares the 12 month results last year versus three months in 2018.
While the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) has boosted port business by about three per cent, the lack of a new NAFTA Agreement (USMCA) concerned some shippers enough that they looked overseas for new markets, said Mr. Boemi. USMCA was signed into law by the Trump Administration on January 29, leaving Canada as the only country that has yet to ratify the new Treaty.
The port has earmarked $37 million, including $18.5 million from the federal government, to improve cargo mobility and increase the port’s capacity by reducing wait times and bottlenecks for container traffic which will also reduce greenhouse gas emissions from trucks. The main component is the construction of a railway bridge at the Cast Terminal where trucks exit the port, to eliminate traffic conflicts between trains and vehicles. “That would be at the area located beside the Cast Terminal and the common truck portal. The truck portal is on the north side of the tracks and unless you are accessing the Cast terminal, you would need to cross over the tracks to access the Racine and Termont terminals,” explained Mr. Boemi. “The issue here is that during a train crossing and considering the length of the trains today, it would create a backlog of trucks trying to access the container terminals. This is essentially a bypass.”
Another component is the development of solutions with port partners to modulate the influx of trucks at entry points based on the optimized services offered by the terminals. Lastly, the development in collaboration with the City of Montreal of an intelligent transportation system for port trucking to gain a better understanding of the origins and destinations of trucks outside the port territory, is a third part of the project.
In addition to expanding capacity at its Viau Terminal from 350,000 TEUs to 600,000 TEUs, the Port is hoping to have its environmental permits approved by July to start construction of its new container terminal in Contrecoeur, 25 miles downriver from Montreal. The first phase of the $750 million project is expected to be completed by late 2023 or early 2024. Canada Infrastructure Bank has committed $300 million in financing.
The terminal will boost the port’s capacity from 2.1 million TEUs to 3.5 million TEUs. “The first phase will have a capacity of 1.15 million TEUs. Originally, we were going to build it in increments of 500,000 TEUs, but when we looked at the numbers, it made more sense to build it all at once,” explained Mr. Boemi. “We won’t need it all initially, because of the expansion of Viau.” The port’s two main terminal operators, MGT and Termont (part of Logistec) have been holding discussions on a possible joint venture, noted Mr. Boemi.
Business at Termont Montreal was down slightly last year compared to 2018, according to Termont General Manager Julien Dubreuil. He said growth was slower than expected, but nothing dramatic. Termont’s agriculture business which usually peaks in September, was a bit off.
On the plus side, a labour shortage facing the industry in 2018 was resolved last year with the addition of 200 longshoremen by the Maritime Employees Association. In September, the Quebec government announced it was providing $1.4 million to Termont for the conversion of its fleet of 57 terminal tractors into diesel-electric vehicles using automatic stop-start technology from Effenco Development of Montreal.
Work to expand capacity at the Viau Terminal which Termont operates will continue this year and is expected to be completed by the end of 2020, said Mr. Dubreuil. It will add 250,000 TEUs of capacity, bringing 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.
Termont hasn’t seen any major impact from CETA that went into effect in September, 2017, said Mr. Dubreuil. “I think it will be more of a progressive impact as shippers get used to the agreement. We do expect to see some growth this year from some customers who are servicing new markets directly.”
It has been an up and down year for Empire Stevedoring, with some projects finished and others coming on stream, according to company President and CEO Andrew Chodos. “Imports of steel and breakbulk were down last year now that the Champlain Bridge is finished, but we expect to deliver some project cargo for the new REM (Réseau Express Métropolitain, Montreal’s new light rail network.). The market is pretty resilient for steel products going through the port. We saw an increase in steel rails from Europe.” Empire handled about 800,000 tonnes of bulk cargo last year, down from one million tonnes in 2018, primarily due to a decline in potash exports. General cargo dropped from 800,000 to around 700,000 tonnes, which Mr. Chodos blamed on U.S. tariffs on steel and aluminum. It also handled around 125,000 TEUs. The company handled more grain exports through its east coast operations along with bulk and steel through Halifax. “Our project cargo business is small with some wind (turbine) business coming into Montreal. There is more wind business in Halifax due to a large project off the east coast of the U.S. which is bringing in product from Halifax.” Empire’s business continues to be solid with Oceanex which operates a twice-weekly service between Montreal and St. John’s where it shipped over 20,000 vehicles and RoRo products last year.
As part of a five-year, $120 million modernization project, Montreal Port Authority is upgrading Empire’s Bickerdike Terminal at an estimated cost of $25 million. The upgrade includes redeveloping truck access, increasing and improving electrical capacity and redeveloping container and cargo storage areas, primarily for Oceanex. Work began in the fourth quarter of 2019 and scheduled to be completed at the end of this year.
Mr. Chodos was asked to comment on Sylvie Vachon, who recently announced her retirement as President and CEO of Montreal Port Authority. “She was a very competent manager, not like a bull in a china shop type. She did a lot of good things to promote the Port and improve its operations, like the addition of Contrecoeur (container terminal) and expansion of the Viau terminal.”
Port of Trois-Rivières
A year after the unveiling of the “On Course for 2030” development plan, Port of Trois-Rivières has already implemented several initiatives aimed at “being an innovative urban port, generating growth, at the heart of a competitive supply chain.” Last year, the port handled a record 4.2 million tonnes of cargo, versus 3.9 million tonnes handled in 2018. Solid bulk increased to 3.6 million from 3.2 million tonnes, while liquid bulk remained stable at 300,000 tonnes, roughly the same average for the past five years. General cargo also came in at 300,000 tonnes, a 36 per cent increase over the last five-year average. A total of 260 vessels docked at the port, including 25 cruise ships.
Gaétan Boivin, President and CEO, emphasizes that “one of the On Course for 2030 development focuses was on the conclusion of partnership agreements with other ports with complementary activities. In addition to making our Port more attractive, this approach multiplies business opportunities.”
Last year, the Port signed agreements with Port of Montreal and Port of Mulhouse-Rhin in Eastern France to improve port services. Mr. Boivin doesn’t consider Montreal a competitor and believes the agreement is not a threat to his operations. “The ports along the St. Lawrence complement each other as they offer different services. For example, Trois-Rivières and Quebec are mainly dry bulk ports, while Montreal is mostly containers. But we have a lot in common and face the same challenges such as water levels between Quebec and Montreal and environmental issues. We also want to streamline the different regulations. The goal of the agreement is to share client experiences to improve services along with productivity, efficiency and security.”
The start of construction of the new 100,000 square metre Terminal 21 will depend on lining up financing and an environmental impact study, which should be completed by 2021, according to Mr. Boivin. The projected completion date of the terminal is 2023-24. Terminal 21 will be a versatile structure that will provide the necessary flexibility to redistribute goods from multiple shippers quickly and efficiently through a multimodal distribution centre, he explained. Computerization, automation and integration of artificial intelligence will make it possible to minimize the cost of handling, loading and unloading operations, both for general goods and for bulk cargo. The port will also aim for carbon neutrality in its port and logistics activities.
In addition to Terminal 21, the Port is adding 80,000 sq. metres of indoor and outdoor storage space for value-added activities through the acquisition of adjacent properties and the redevelopment of existing properties in the industrial park. One of the larger occupants of the space is Hason Steel of Lanoraie, QC, that recently completed an 11,200 sq. ft. plant to manufacture components for the petrochemical industry. The bulk of Hason’s production will be shipped to the U.S. Gulf Coast. Other destinations include India and Russia, according to Patrick Couture, Hason’s Director of Commercial Operations. “Trois-Rivières was chosen for the new plant because of the port’s installations and it offered what we needed. The plant will also provide us with synergies with our existing operations in (nearby) Lanoraie.” The company will carry out its reactor assembly operations at its new plant and transport modules to the port to ship them assembled to customers around the world. “By shipping its reactors in one piece by boat, Hason sets itself apart from its competitors, offers added value to its customers and is able to access new markets. We are proud to be a key part of this innovation,” said Mr. Boivin.
Port of Saguenay
Port of Saguenay reached a new historic high in terms of cargo handling in 2019, while maintaining similar traffic as the previous year with 62 ships docked for the year. More than 635,900 tonnes of goods were handled, an increase of over 267,300 tonnes from 2018. This strong increase is explained in particular by the large volume of de-icing salt received, destined for the Saguenay-Lac-Saint-Jean region, the Quebec City region and the Great Lakes.
The Port begins 2020 with projects to improve its infrastructure, and is continuing its work to accommodate large-scale projects in its industrial-port area. One of the biggest projects is the construction of a metals processing plant by Black Rock Metals valued at over $1 billion for an iron-vanadium mine it is developing in Chibougamau. The company will convert the concentrate into pig iron that will be shipped to the Great Lakes and Europe. The Quebec government is providing $63 million in loans and loan guarantees to Développements Port Saguenay, to create the required infrastructure to support the Black Rock Metals project.
The Port has also been working on developing a new marine terminal on the North Shore that will enable Arianne Phosphate of Saguenay to construct an apatite (used for fertilizer) mine for about $1.2 billion. The project got the go ahead last October from Canada’s Environment minister, but construction on the new terminal will not proceed until the Port gets assurances the project will move ahead. Two European clients have signed on, but more are needed to justify the investment, according to company spokesperson Jean-Sébastien David. The company is currently negotiating with four other potential clients, he added. The $1.2 billion price tag includes $230 million for the port terminal. The mine will take two years to develop, including six months of engineering work, while the terminal could be built in 18 months, Mr. David estimated.
Port of Sept-Îles
A new $220 million multiuser dock, combined with a recovery in world iron ore prices plus several new and revitalized mining projects in and around the Labrador Trough, helped the Port of Sept-Îles record an increase of more than 15 per cent in volume handled in 2019. It’s the fourth best year since the record-setting 34.9 million tonnes handled in 1979 and the best year since the Sept-Îles Port Authority was created in 1999. In 2019, 481 ships anchored in Sept-Îles Bay, 53 more than in 2018.
Iron ore accounts for over 90 per cent of the 29.3 million tonnes handled at the port last year, up from 25.3 million tonnes the year before. The port is projected to handle more than 35 million tonnes in 2020, according to Pierre Gagnon, Port President & CEO. “Our business is tied to the iron ore market which has completely recovered from US$40/MT in 2015 to US$95/MT. Quebec Iron Ore is looking to double its production and our multiuser dock has lots of capacity to offer with 50-million-tonnes, the largest of its kind in North America. Our five partners (Québec Iron Ore, Tacora, Tata Steel Minerals Canada, Alderon Iron Ore and New Millennium) have already reserved 38 million tonnes of capacity.”
The 400-metre multiuser dock accommodated 45 vessels for a total of 7,776,000 tonnes handled, a 40 per cent increase over 2018. Québec Iron Ore began shipping last year and a new user, Tacora Resources Inc., brought in another 917,000 tonnes. IOC Rio Tinto also carried out split cargoes on vessels chartered by Tacora. Another major milestone, 10 million tonnes handled at the multiuser dock, was reached in August, after only 16 months of operation.
The multiuser terminal is unique as its cost was split between the federal government, the port and private investors, namely the iron ore companies, noted Mr. Gagnon. “And by sharing the terminal, it allows companies like Alderon to take the money they would normally have to spend on building their own port infrastructure and put it towards their mining operations. We believe this is a strong selling point to attract new business.”
Montreal-based Alderon is developing a high-grade iron ore project in the Labrador Trough with its Chinese iron and steel making partner HBIS Group Co., which has a 25 per cent equity stake in the project. Alderon is currently lining up financing, according to company President and CEO Tayfun Eldem. Once financing is in place, mine construction will take about 26 months to complete.
The mine has proven reserves of over 517 million tonnes and once full production is reached, annual shipments from Sept-Îles will be 7.84 million tonnes. HBIS has contracted to take 60 per cent of production, with Glencore the remaining balance.
Mr. Gagnon is proud to point out the port is connected to 60 others globally, including 25 in Europe, where 3-4 million tonnes of iron ore goes to Rotterdam alone. China accounts for 31 per cent of exports, while Japan and Taiwan take another 21 per cent. And Sept-Îles, combined with nearby Port Cartier, account for 70 million tonnes of iron ore exports annually, he added.
Work on upgrading the port’s intermodal Pointe-aux-Basques terminal, closed since October, 2018, is expected to begin this year. In June, Ottawa and Quebec announced a combined contribution of $13.3 million towards an estimated price tag of $20 million. Work is expected to take a year, and improvements will include rebuilding the façade of the terminal, extending it by 40 metres, adding docking equipment and improving the intermodal infrastructure.
The closure of the Pointe-aux-Basques terminal has forced supply ships to use the cruise ship terminal, not designed to handle containers and bulk cargo. When it reopens, several mining companies plan to use the terminal to move supplies north to their operations in and around the Labrador Trough and to export iron ore and other materials.
“With the growing iron market expected to generate upwards of 20 to 30 million tonnes of ore in the coming years, this project will allow the Pointe-aux-Basques Terminal to play a big role in the movement of supplies and as a transit point to meet the rising demand for short sea shipping for a growing range of goods,” said Mr. Gagnon.
Sept-Îles’ cruise ship business saw another record-breaking year, with the port welcoming 18,655 passengers and crew members. The season included seven planned calls, including the grand Queen Mary 2 on two occasions, and one unplanned call by the Serenade of the Seas seeking shelter from Hurricane Dorian. The ship came in to port with less than 24 hours’ notice and stayed for 34 hours, to the delight of retailers. A new permanent welcome pavilion is in the works for completion in 2022, since Sept-Îles is the only port on the St. Lawrence that doesn’t have one, Mr. Gagnon pointed out.