As the longshoremen strike in Montreal enters its second week, diversions to Halifax continue. Thousands of containers that normally sailed past the port are now headed here.
It now seems the port may have captured some of the business.
I have been told that CN Rail and PSA Halifax have signed a six-month agreement to handle 2,500 20-foot equivalent units a week from MSC. While no official announcement has been made, MSC ships continue to call on Halifax. CN Rail has added a second train in and out of Halifax most days.
Saint John has also picked up several diversions, and Canadian Pacific has been running container trains on its newly reacquired route into Saint John.
MSC was already a caller in Saint John, but now Hapag-Lloyd has mostly diverted its MCA service to Saint John, which has been undergoing a modest expansion at the container terminal for several years.
In 2018, DP World took over as operator, and two new post-Panamax container cranes went into service. Work is underway to expand the pier, as well.
Saint John’s loss of Tropical Shipping to Halifax in 2018 represented a significant decline in container traffic for the port; capturing the MCA Service would be a big win.
If the Montreal labour action continues, there is a chance that shipping lines and customers will become accustomed to the new service, leaving a risk they will not return. The Port of Montreal was already in danger of losing business due to environmental delays and limits on the size of ships that can reach the port. Extended labour action forces a new normal.
This is a risky strategy for the unions. While they want higher pay and better scheduling for their members, they risk driving away ships. Fewer ships mean less hours of work, translating to lower pay, even if it’s at a higher rate.
A smarter strategy would have been to continue with periodic short strikes, which would have caused delays but likely wouldn’t have forced the massive diversions we are seeing.
With all the extra traffic, dwell times at PSA have reached six days. This is a rail capacity issue and, if it can be resolved quickly, Halifax would be well placed to keep some of this extra traffic.