DP World Leases Terminal Across Border From Maine
Port Saint John, New Brunswick has signed an agreement with Dubai-based DP World for operation of its container terminal.
"Our waterfront and our port is where our story began, and is where our future begins," Port CEO Jim Quinn said in a press conference Thursday.
DP World, the operator of nearly 80 ports and terminals in 40 countries worldwide, already has leases in British Columbia at Vancouver, Nanaimo and Prince Rupert. Port Saint John will give the firm a presence in eastern Canadian markets - but the location is also just 80 road miles from the border with Maine, adding the ability to transship containers via truck or rail to New England. The location and access would be an Atlantic coast parallel to DP World's terminal in Vancouver, which gives the operator's customers easy access to the western U.S.
At present Port Saint John handles about 100,000 TEU of containerized cargo per year. Its container terminal has a depth alongside of 40 feet, just under the old Panamax standard for box ships of 5,000 TEU; the larger U.S. East Coast ports have been dredging to 50 feet in anticipation of vessels in the 10,000 TEU+ range. The 30-year lease includes a $200 million investment by the government, which will dredge the container berths to the Neopanamax standard, 50 feet, along with other improvements to facilities.
"We are delighted to have a presence on the east coast of North America for the first time and see great growth potential," said Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World. "We will be making a major effort to grow business which will in turn have positive economic impact in the region.”
DP World attempted to enter the U.S. market in 2006 when it purchased the holdings of P&O, but it sold the American assets after politicians voiced security concerns about a Middle Eastern company operating domestic ports.
The Wall Street Journal asked Matthew Hoag, DP World’s operations and commercial director for the Americas, about the firm's aspirations for the U.S. market.
With Port Saint John, “there’s definitely an alternative gateway opportunity to New York, Boston and to a lesser extent Halifax," he said. As to whether the firm might be in discussions about buying U.S. terminal operations, Hoag said no, but it remained open to opportunities as they came up. The question was timely: the American assets DP World sold ten years ago are now up for sale once more.