HALIFAX BULLISH ON BOX PROSPECTS

HALIFAX BULLISH ON BOX PROSPECTS

The Port of Halifax is flexing its muscles in hopes of becoming a major load center on the east coast of North America after it was bolstered by the recent arrival of two giants in international container shipping.

As container operators rely on increasingly larger vessels, port officials here feel their strategically located deepwater facility will steadily erode Montreal's market share dominance in eastern Canada.Port officials and shipping executives in Montreal acknowledge that Halifax has become more competitive but remain confident that Montreal has what it takes to remain Canada's leading general cargo port.

Seven out of the top 20 containership operators in the world now call at Halifax.

We are experiencing the fastest growth in Canada in terms of new carriers and container cargo, David Bellefontaine, the port's general manager, said in an interview.

Mr. Bellefontaine predicted that assuming a normal growth of the Canadian economy, Halifax will be handling 4 million metric tons (about 4.4 million tons) of containerized cargo by the early 1990s.

This year, the port's container throughput is expected to top 3 million metric tons, after reaching 2.8 million metric tons in 1987. Montreal's container traffic last year totaled 5.5 million metric tons. In the first four months of this year, container traffic jumped by 30 percent over the corresponding period of 1987 to 1,071,204 metric tons.

Earlier this month, Maersk Line became the 11th carrier in the past 18 months to begin service to Halifax. It's the first North American port of call on the westbound leg of a new Maersk trans-Atlantic service.

The new ships being introduced on the route by Maersk can carry the equivalent of some 3,900 20-foot container units, giving them the largest operating capacity of any containerships now in service. They are calling at Halterm, one of the two main container terminals at Halifax.

On March 31, Evergreen Line began a weekly direct call to Halifax on a western Mediterranean/North America service.

Mr. Bellefontaine said the port is trying to persuade Evergreen to eventually include Halifax on its round-the-world service.

We could accommodate such a service by changing the stacking procedures and the outlay of the terminal, said Alan Lemont, assistant operations manager of the Ceres container terminal here.

David Dunton, vice president, marketing and sales in Canada for Atlantic Container Line, said, From an ACL point of view, a Halifax scheduling is ideal. The port is efficient and ice-free and is an excellent gateway if you are going to serve both Canada and the United States. (The vessels of ACL's North Atlantic service also call at U.S. East Coast ports.)

We ship a lot of tonnage out of Halifax to the Far East, the Middle East, the Caribbean, the Pacific Rim and Europe, said Sam Salmon, manager, marine transportation and distribution of Domtar Inc., a large Montreal-based company active in pulp and paper, chemicals, packaging and construction materials.

But he said Domtar was also a big user of the Port of Montreal, notably to European destinations.

We look at the total cost of moving a container from various locations to the final destination, depending on availability of service. We then choose whichever port works out the cheapest.

Michael Lamere, with the distribution services department of Celanese Canada Inc. in Montreal, said his firm uses Halifax and Montreal for shipping products abroad.

There's not really much difference, in terms of total transit time of shipping goods to Europe, whether you put them on a ship directly in Montreal or make the extra rail haul to Halifax, Mr. Lamere said.

Brian Doherty, president of Halterm, says he is very optimistic about the future of the port.

What is happening in Atlantic Canada is that cargo is gravitating into Halifax as a hub, Mr. Doherty said, adding that feeder services to Boston and Newfoundland are contributing to overall traffic growth.

Well situated on the Great Circle route, and with no navigational obstacles, Halifax is, in effect, becoming a major load center, Mr. Doherty said.

The real proof was Evergreen's choice of Halifax over Saint John, Mr. Doherty said in reference to the Bay of Fundy port that in the past few years has lost several big Far East carriers to Halifax and has seen its container business fall dramatically.

Regarding the Halifax-Montreal rivalry, Mr. Doherty said, The ultimate test will be the cost to the ocean carrier of moving a container from the United Kingdom to Toronto.

He agreed that the railway link to central Canada, and rail rates in particular, are key elements.

There are two major railways in Canada, but Canadian National is the only one serving Halifax. Mr. Doherty said CN has done an excellent job in responding to the challenge.

However, a major shipper who requested anonymity, indicated that in order to remain competitive in the long run, CN will need to upgrade its Halifax- Montreal line in order to provide double-stack trains.

This would require huge investments that will be difficult to raise, he said.

CN management, meanwhile, remains hesitant about the double-stack concept for Canadian traffic following test runs with double-stack equipment.

Between 1986 and 1987, Halifax's share of container traffic handled at eastern Canadian ports rose from 29.2 percent to 33.5 percent, while that of Montreal increased to 63.9 percent.

This year, we should see our market share increase by another 2 percent or 3 percent, Mr. Bellefontaine said.

In the mid-1970s, Halifax and Montreal were closely matched, with each holding about one-third of market share. Montreal, however, began pulling away significantly from Halifax in 1978 and has not been caught since.

With the vessels getting larger, we feel the long-term trend favors Halifax, Mr. Bellefontaine said.

With an eye to meeting increased demand, the port recently began construction of a C$5.4 million berth modification at Halterm. It will allow for faster turnarounds of vessels calling at the terminal.

Mr. Bellefontaine also indicated that the port has begun feasibility studies for additional container facilities on new sites. You can't wait to be sold out before you plan.