The Chronicle Herald
12 December 2018
Canadian National Railway is bidding to acquire a stake in Halterm, the largest container terminal in Eastern Canada.
Word came last week that CN has made an offer to buy Halterm, the Port of Halifax south-end container terminal.
While the report was seemingly out of the blue, there have been rumours in the past that Halterm and the Ceres-operated Fairview Cove terminal were for sale.
The rationale for the CN acquisition is based on replicating the railway’s success in Prince Rupert, B.C. As is the case there, Halifax’s location, combined with CN’s extensive rail network, would allow it to offer faster service to destinations in the United States versus direct shipping through more congested American ports.
Halifax is well positioned to mirror Prince Rupert’s success. The Fairview terminal there was built in 2007 with a single birth, four cranes and a capacity of 500,000 20-foot equivalent units per year. By 2015, it was handling 750,000 TEU. This closely matches the current state of Halterm, which has a single birth and four cranes, and handled 559,242 TEU last year.
In 2015, a second birth and four additional cranes were added in Prince Rupert, and capacity increased to 1.35 million TEU.
The Port of Halifax recently began construction of a pier expansion to add a second birth. With additional cranes, the Halterm facility will match what CN already owns on the West Coast.
There has been some talk of how CN would handle a second train. However, CN has previously operated two trains daily from the Rockingham yard along the Bedford Highway. They were consolidated into a single long train with the economic downturn in 2008. I have been told that some operational changes would be required to accommodate the second train at the proposed lengths.
If CN were to double the terminal tracks at Halterm, from four to eight, that would allow for an entire train to be made up there. In addition to installing the rail, a change in equipment at Halterm would be required. Presumably, one train would then be made up in Rockingham with containers bound for Fairview Cove and CN’s north-end intermodal facility. If this were to happen, then the impact on the proposed commuter rail project would be minimal.
CN said it was potentially also interested in a port in Quebec or another in Nova Scotia if this purchase fell through. The proposed terminals in Sydney and Melford are not currently served by CN. The fact that what CN is proposing for Halifax is the same business model that proponents of the Melford terminal are using is a significant sign that they lack a rail partner able to provide speedy service. CN already has infrastructure in Halifax.
As for the possibilities in Quebec, CN already does substantial business in Montreal and would not get the additional container volumes at a port incapable of handling ultra-class ships. Quebec City is building a terminal, which could handle ultra-class ships. However, it’s several days sailing time off the East Coast and the port lacks an existing customer base.
If CN was also to acquire the Fairview terminal, additional optimization could be had in terms of ship calls and keeping piers from overcrowding. Smaller ships could call at Fairview, keeping the unrestricted piers free for larger ships.
- The AL6 Service ended its call to Halifax with the visit of the Bilbao Bridge on Dec. 10. In its place, the Alliance will be marketing the existing ZIM Mediterranean service as AL7.
- The bulk carrier Horizon spent a few days tied up at Pier 9 in Halifax to take on fuel. The ship was detained for five days in Port-Alfred, Que., and was released to sail to an American shipyard for repairs. An inspection found the lifeboats were not operable, openings that were not watertight, issues with navigation equipment not being readable and problems with visibility from the bridge — in all, 22 deficiencies were noted, and nine were grounds for detaining the vessel.
- The U.S. Coast Guard Ship Abbie Burgess made a brief stop at the Centre for Ocean Ventures and Entrepreneurship in Dartmouth before heading into the Great Lakes for the winter. The ship can perform icebreaking duties.
- The federal government announced last week the purchase of eight additional Bay class search and rescue lifeboats for the coast guard. Fishermen in southwest Nova Scotia will hopefully have one of these boats stationed in their region.