Against the odds: PSA's deal-making – a tasty Philly cheesesteak & more
PSA building the integration sandwich
Potash has been a tremendous fuel for growth at the Canadian port of Saint John; the New Brunswick port clocked up 11% higher tonnage last year than in 2020.
But its dry bulk traffic was on fire, surging a whopping 123%, with potash the main driver for this, more than doubling, from 619,203 tonnes in 2020 to 1,653,750 tonnes.
Dry bulk may have been the star performer, but most eyes have been on the port’s container traffic, which increased by 10% to 86,949 teu – its fifth consecutive year of growth at the port.
Help came from issues with rail traffic at Halifax and labour conflict at the port of Montreal, noted one forwarder, but the primary momentum came from more robust rail services.
Canadian Pacific Rail (CP) has pursued its East Coast Advantage strategy since the acquisition of Central Maine & Quebec Railway in June 2020, which gave it access to the port of Saint John and transatlantic container flows. CP wasted no time in launching intermodal services through its newly minted east coast gateway.
Saint John has weekly services from three container operators – Hapag-Lloyd, CMA CGM and MSC. Hapag-Lloyd has been the main catalyst for CP’s new operation, a fact that CP publicly celebrated this month, painting a train with the shipping line’s colours and logo.
At the end of 2020, the pair extended their service agreement until 2025 and Hapag pledged a new weekly service from the Mediterranean to Saint John and on to Montreal, which launched last May, with CP’s access to the midwestern US a major factor behind the agreement.
The rail company claims its service from Saint John constitutes the shortest route between Atlantic Canada and key North American markets. The arrival of CP made Saint John the only Canadian port on the Atlantic coast to be served by both Canadian Class I rail carriers.
Loyalties were somewhat strained last year in the takeover battle for Kansas City Southern between CP and Canadian National. The latter was vocally supported by the port of Halifax and the government of Nova Scotia, while the government of New Brunswick and port of Saint John expressed support for CP’s bid.
Both ports were eyeing deeper access to US markets through the respective marriages.
Now, CP and Saint John are working on beefing up their capacity. The rail carrier is spending C$90m ($71.16m) over three years on the CMQ line to enhance efficiency and safety, while the port is in the middle of a C$205m project that includes construction of a new wharf, terminal upgrades and a deeper ship channel, scheduled for completion in 2023.
“The port was underserved with rail, now it’s improved,” noted Karl-Heinz Legler, general manager of Rutherford Global Logistics, and while he welcomed the creation of a new Atlantic intermodal gateway, he does not view it as a huge game-changer. He still regards Halifax as the more prominent Atlantic gateway, although things are in flux, he noted.
“Sometimes carriers adjust if they can get a better deal at one port,” he said.
In terms of service levels, he sees no significant difference between the ports of Saint John, Halifax and Montreal. Unlike a number of US ports, they came through 2021 without serious congestion issues.
“There are no horror stories at any of them. Everything seems to be relatively normal,” he said.
Container volumes through New Brunswick should continue to grow this year, given recent import projections. Repeating a triple-digit increase in dry bulk volumes may be a bit harder.