Halifax needs port improvements to stay competitive, CN chief says

HALIFAX (Sept. 14, 1999) — The Port of Halifax has a “huge opportunity” to increase its share of European container traffic destined for the U.S. Midwest, but only after aggressive cost reductions, better service, and a new multi-user container terminal, Canadian National Railway CEO Paul Tellier said yesterday.

Tellier, speaking to a dinner sponsored by Halifax Port Days, said CN’s $3.5-billion acquisition of Illinois Central Corp. and $250-million in container-terminal and tunnel investments have strengthened the Port of Halifax’s ties to the U.S. Midwest and its competitive position in fast-growing north-south trade corridors between Canada with Chicago, Memphis, St. Louis, New Orleans, Kansas City, Dallas, and Mexico City.

He said the U.S. Midwest market, with a population of 75 million people, represents the single largest opportunity for the Port of Halifax. Earlier this year, Halifax lost a bid to become the East Coast port of call for shipping giants Maersk Line and Sea-Land Service, which would have brought rapid expansion and improvements to port infrastructure.

“Container traffic from Europe to the U.S. Midwest is the fastest-growing component of the volume handled by the Port of Halifax,” Tellier explained, noting that the port handled 65,000 TEUs (twenty-foot equivalent container units) to and from the U.S. Midwest in 1998, a five-fold increase from 1994.

With the recent arrival of new shipping lines, this volume will grow.

“But right now, the Midwest market accounts for only 15% of the total container traffic through the Port of Halifax. We can do more.”

CN’s new north-south network, in conjunction with the Port of Halifax, offers European shippers a substantial transit time advantage in reaching U.S. Midwest markets, Tellier said.

So great are the opportunities represented by CN’s link between Halifax and Memphis — a city that aggressively aims to become “America’s distribution Center” — that CN has invited key Memphis officials to explore the ” potential for a natural alliance” between the two cities’ distribution functions, Tellier said.

Tellier warned that the CN advantage, and Halifax’s ability to accommodate post-Panamax container ships, are not enough for the port to fulfil its U.S. Midwest potential. Right now, the port is at a “critical juncture” — it must reduce costs and improve service to outperform rival gateway ports on the eastern seaboard of North America.

He called for government investment to build a new, state-of-the-art, multi-user terminal capable of lifting 300 containers per hour, using funds from a national infrastructure renewal program, expected to be announced this fall.

Tellier also said port management must find ways to make work rules more flexible in order to reduce labor costs, and to improve service.