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The Promise of Container Transshipment at Eastern Canadian Ports

halifax
File image courtesy Port of Halifax

Published Jun 27, 2022 10:42 PM by Harry Valentine

There was once great promise to develop international container transshipment between mega-sized ocean-going ships and smaller domestic ships at ports located in Eastern Canada’s Cape Breton region. While container ports operate on the Great Lakes at Cleveland, Ohio and Duluth, Wisconsin, container ships usually sail directly between European port and Great Lakes ports.

The infancy of container ship operations in the region followed the completion and opening of the St. Lawrence Seaway, which allowed ocean going ships to sail between the North Atlantic and North America’s Great Lakes. During the early years of container ship operation, several initiatives were launched to develop container ship service to Great Lakes ports. The early services proved only to be marginally viable. Many decades later and into the early 21st century, the physical size of ocean-going container ships increased as greater proportions of international trade moved inside shipping containers.

Deepening and widening sections of the Suez Canal allowed the super-size container ships direct access between the Mediterranean Sea and the Red Sea, while the Panama Canal was expanded to allow the larger container ships to pass. At the time, most American East Coast ports were unable to berth these large container ships. Two companies formulated plans to develop container transshipment terminals in Eastern Canada.

While business plans for international container transshipment at a Canadian port appeared attractive, Canadian customs regulations had the potential to be problematic and delay transfer between points of origin and destination. Transshipment containers intended for American destinations would need to undergo a second customs inspection upon arrival on American soil. The delays provide a competitive basis for direct port-to-port sailing such as Antwerp - Cleveland involving smaller ships carrying higher priority containers and bypassing such ports as Halifax and Montreal.

To its credit, the Government of Canada is investing in improved container inspection technology at Port of Halifax, where installation of game-changing, land-based container transfer technology is possible. Minimizing transshipment time duration at Port of Halifax enhances future prospects for container shipping to Canadian Great Lakes ports.

Canadian Seaway Ports

The combination of three events that involve the Port of Halifax offers future potential for transshipment to and from Canadian ports located along the St. Lawrence River, Seaway and Great Lakes. During trade negotiations with Europe, known as CETA (Canada Europe Trade Agreement), Canada allowed European flagged shipped to carry domestic Canadian freight between Halifax and other Canadian ports. In addition, there has been development in game changing technology that could rapidly transfer containers between Halifax’s north and south terminals. Combined with new customs inspections technology, this would greatly speed up transshipment.

Ports located upstream of Montreal that could become destinations for transshipment containers include Johnstown, Picton, Hamilton and Windsor. Some 50 percent of the Canadian population lives in the Province of Ontario, and the Port of Hamilton would have potential to become the main container port. Large ocean ships sailing from European ports and Asian ports located west of Singapore that sail to Port of Newark would be able to transfer Canada-bound containers at the Port of Halifax. Transshipment containers destined for American Seaway and Great Lakes ports would transfer at a western Mediterranean transshipment port.

Tug and barge transport

Canadian regulation requires that the tug and not the barge carry the Canadian flag for domestic sailing. The cost of a flag for a tug is far less than the cost of a flag for a Seaway-max size of ship. As a result, there is potential for competitively priced container-on-barge operation between the Port of Montreal and any of the Ports of Johnstown, Picton, Hamilton and Windsor. However, during November of each year, powerful winds cause severe waves dubbed “the November Witch” to occur on the Great Lakes, including in eastern Lake Ontario.

During November of each year, barges of 50-ft beam would have be to be diverted via the Murray Canal while sailing between Montreal and Hamilton, to bypass the severe ocean-size storm waves that occur in eastern Lake Ontario. Parks Canada oversees the Murray Canal and negotiation would be required for commercial sailing via that canal toward the end of the Seaway shipping season. Ports of Johnstown and Picton would be unaffected by the “November Witch”. Container-on-barge operation from Montreal to Canadian ports along Seaway and on the Great Lakes promises to be cost-competitive against truck and railway transportation.

In addition, a future possibility might involve transferring containers destined for American Great Lakes ports, without Canadian customs inspections at the Ports of Montreal and of Halifax. The possibility of reducing customs delay time at Canadian ports enhances future prospects to expand container transshipment involving American destined containers.

Conclusions

During the Seaway navigation season, direct container ship service operates between the ports of Antwerp and Cleveland on Lake Erie. About a year ago, container transshipment was introduced on a domestic Canadian route between the ports of Montreal and Hamilton, with future transshipment potential between the ports of Halifax and Hamilton. While transshipment briefly operated between the ports of Halifax and Cleveland, customs delays prove problematic. The Government of Canada has subsequently invested into improving container customs inspection at the Port of Halifax, with potential to enhance transshipment prospects between Halifax and Canadian inland waterway ports such as Hamilton.

While there is potential for future transshipment of American bound containers at Eastern Canadian ports, customs delays at both the Canadian and at American ports encourages direct trans-Atlantic sailing between European and American Great Lakes ports. If senior government officials were willing, there might be potential to revise customs inspections procedures of American bound transshipment containers at Canadian ports to minimize delay time. One option could include American customs officials at Canadian transshipment ports, to increase the volume of maritime container traffic between the North Atlantic and the Great Lakes.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.