Assessing Prospects for a Port of Quebec Container Terminal
Authorities at Quebec City, Canada, have recently announced the intention to develop an intermodal container port and transshipment terminal. Like Port of Newark, Port of Quebec can offer 15-meter (49-foot) water depth and has access to a main highway as well as railway service. The proposed container port faces much competition from other ports in the region, including Montreal.
Port Quebec’s Advantage
Prior to the reconstruction of the Panama Canal to transit larger ships, the most widely used size of container ships could sail to the Port of Montreal. The Lower St Lawrence River offered sufficient depth clearance and sufficient overhead clearance (air draft) under bridges for ships of 3,500 to 4,000 TEU to sail to Montreal. Downstream of the easternmost bridge across the St Lawrence River located on the west side of Quebec City, water depth increases. As a result, ships too deep and too high to sail to the Port of Montreal can berth at quayside at Port of Quebec City.
The proposal to develop a container terminal at Port of Quebec follows negotiations between Canada and Europe in regard to the Canada – Europe Trade Agreement (CETA) that includes allowing easier passage for European flagged ships to sail in Canadian territorial waters. If CETA results in an increase in container trade moving across the North Atlantic and Europe, there are prospects for larger container ships to be assigned to that route. Fully laden container ships of 8,000 TEU capacity and 14 meter (46 foot) draft could arrive at Port of Quebec and transfer container to the railways and to trucks.
While the proposal to develop a container transfer terminal at Port of Quebec City has some merit. The railway distance between Quebec City and major destinations such as Toronto and Chicago is comparable to the railway distance from Newark. For container traffic originating from Europe, Port of Quebec is competitive. However, ships sailing from Asia via the Panama Canal will have to sail additional 1,000 nautical miles distance to Quebec City than to Port of Newark. At $0.75 per container nautical mile, the transportation cost of containers arriving at Toronto via Newark would be $750 less than via Port of Quebec.
While ships of 22,000 TEU could arrive at Port of Newark courtesy of overhead clearance at Bayonne Bridge and 15 meter draft, the logistics sector in the northeastern U.S. operates a just-in-time (JIT) delivery system that requires frequent arrivals of ships of some 10,000 TEU capacity. Ships of 18,000 to 22,000 TEU capacities could sail via the Suez Canal between Asian ports and Port of Newark, except that the logistics sector in the northeastern U.S. has not yet warranted the operation of a ship of such capacity on such routes. It is unlikely for such ships sail to Port of Quebec.
There is market potential for super-size container ships to sail via Suez Canal from Asia to transshipment terminals currently under development at Cape Breton, Nova Scotia, where containers would be transferred to smaller ships sailing to multiple ports located along the Atlantic Coast as well as St Lawrence River and Seaway. Many destination ports would require interlining ships of 1,000 to 5,000 containers capacity, making coastal maritime and inland waterway maritime transportation cost competitive against railway transportation. The closer proximity of the Cape Breton ports to major east coast American ports offers a competitive edge over transshipment at Port of Quebec.
St Lawrence Seaway
The St Lawrence Seaway is operational between late in March to late in December of each year. Container ports along the Seaway upstream of Montreal include Ports of Valleyfield (Quebec), Ogdensburg (New York State), Toronto (Ontario), Cleveland (Ohio), Detroit (Michigan) and Chicago (Illinois). Market experience from the northeastern U.S. has revealed the existence of a substantial market involving customers who are willing to wait four additional days for delivery of containers in exchange for savings in transportation costs. There would likely be a substantial market for container shipping between Port of Quebec and several ports along the Seaway.
A container ship of 1,000 TEU capacity has regularly sailed between Europe and Port of Cleveland. At some future time, it could operate between Port of Quebec and Cleveland. Port of Ogdensburg could warrant regular arrivals of a ship of 1,000 TEU to serve the logistics sector of Eastern Ontario, with potential for ships of 1,500 TEU capacity each for Ports of Toronto, Detroit and Chicago. The logistics sector would have to concentrate their container arrivals during the Seaway season, with minimal arrivals during the period of the Seaway winter closure and which the railways could carry throughout the year.
The main quay at Quebec City is located on the mouth of the St Charles River tributary of the St Lawrence River. Gentle water conditions would allow for the operation floating cranes that can transfer containers between a large ocean going ship and ships that will sail along the St Lawrence River and Seaway. The St Lawrence River widens considerable to the immediate east of the confluence of the St Charles River and south of the suburb of Beauport, a potentially suitable location for floating cranes to operate to transfer containers among vessels.
Vessel-to-vessel transfers of containers at Port of Quebec allows for the operation of river vessels that would encounter difficulty sailing on the sometimes stormy waters on the Gulf of St Lawrence. Tugs pushing coupled tows of barges could easily operate along the St Lawrence River from Port of Quebec to small ports with shallow draft located along that river, also into navigable tributaries of the St Lawrence River such as the Ottawa River (to Ottawa), the Murray Canal and Severn Waterway in Ontario as well as the Richelieu River into Lake Champlain.
When neo-Panamax ships arrive at Port of Newark, cranes transfer containers intended for New York City to barges that sail to Port of New York. Cranes may transfer containers (2,000 TEU) arriving at Port of Quebec and intended for Montreal on to barges or to Ro-Ro vessels that operate on electric propulsion. Given the reduced sailing speed along the Lower St Lawrence River compared to ocean sailing, increasing sailing speed from 10 knots to 20 knots requires eight times the propulsive power. Hydro Quebec offers competitive commercial power rates, allowing for cost-competitive battery-electric vessel operation between Ports of Quebec City and Montreal.
Using coupled-vessel operation along the Lower Mississippi River as the precedent would allow for operation of extended-length coupled vessels carrying containers between Ports of Quebec and Montreal. Transportation costs (per container) would be a fraction of railway or truck transportation costs. The presence of navigation locks upstream of Montreal allows for recharge of batteries while vessels are in the locks. Narrow navigation channels in the Montreal region allows for the installation of electric railway-type power cables to allow for simultaneous propulsion and battery recharge for vessels sailing to ports along the Upper St Lawrence River.
The fact that larger container ships could sail into Port of Quebec than into Port of Montreal creates competition between the ports. If Canadian – European trade increases to warrant the sailing of larger container ships, Port of Quebec could gain a competitive edge over Montreal. The willingness of Ports of Chicago, Detroit, Cleveland and Toronto to encourage interlining of ships to and from Port of Quebec for their European maritime trade, business prospects for Port of Quebec would likely improve and possibly at the expense of Port of Montreal.
It is very unlikely that ships would sail between Asian ports and Port of Quebec, the result of competition from Cape Breton transshipment terminals. The logistics sector and their freight forwarders would influence future port development along the Lower St Lawrence River. If Canada – Europe trade continues to warrant the sailing of ships of 2,200 to 3,500 TEU, Port of Montreal will remain in business. The prospect pf Europe – Canada/U.S. trade that includes trade to Upper Great Lakes ports warrants sailing a regularly scheduled single vessel of 6,000 to 10,000 TEU, then Port of Quebec would develop a market niche.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.