Fallout begins for ports of Montreal, Halifax

MONTREAL (April 13)– Four major ocean carriers are laying groundwork for a vessel-sharing alliance that will link Montreal and Northern Europe, a harbinger of leaner times for Canada’s major eastern ports.

The shipping companies — Maersk Line, P&O Nedlloyd, Orient Overseas Container Line and Canada Maritime — are expected to launch the service in early May, reported Lloyd’s List, the U.K.-based shipping journal. The arrangement would coincide with Sea-Land Service withdrawal from Montreal later this month and pull roughly 55,000 20-foot equivalent units (TEUs) a year from the port.

It’s another blow to Canada’s eastern ports, which shippers have used to land U.S.-bound cargo in order to avoid the U.S. harbor maintenance tax (a tax on exports ruled unconstitutional last year) and high rates for freight moving between the U.S. and Europe.

But with the elimination of the harbor maintenance tax on exports followed by deregulation of the U.S. shipping industry later this year, compelling reasons to use Canada’s ports are drying up.

The other shoe could drop on Halifax. Maersk and Sea-Land are expected to announce where they will base their main East Coast container hubs by the end of the month.

The two lines reportedly have set a 5 p.m. deadline today for final proposals on lease agreements and other financial considerations from Baltimore, New York-New Jersey, and Halifax. It is widely anticipated that two ports will share the business.