A Sea Change in Ocean Shipping (cont.)

“Atlantica” and Northeastern U.S. port opportunity

Bigger “post-Panamax” ships (ships larger than the Panama Canal can handle), crowded West Coast ports and fast-growing container shipment business all spell opportunity for Northeastern ports and their inland port cities. Because of the shape of the earth, a ship entering the Atlantic from the Straits of Gibraltar first travels north, then west across the North Atlantic to reach the Port of New York and New Jersey.

The region dubbed “Atlantica” by the staff of the Atlantic Institute for Market Studies includes New England, the maritime provinces of Canada and Quebec. Sixty-five percent of the population of North America lives within a one-day drive of this region, and the Port of New York and New Jersey is the major stop for container ships plying the Atlantic.

However, New York’s port is overcrowded and currently unable to handle the depth of the fully laden post-Panamax container ship. Between the U.S. government and the Port Authority, a major dredging and blasting project is underway to deepen the shipping lanes to the container port. However, when this is complete it will still be difficult to accommodate the very largest 12,000-TEU ships. Enter the Port of Halifax, Nova Scotia, a two-hour steam off the route to New York.

With plenty of depth in the natural channel, good rail links with Toronto and Montreal, a good hub for “short sea shipping,” and a location one sail-day closer to Northern Europe than any other North American port, Halifax is in a good position to capitalize on the trends taking place in global trade. (Short sea shipping uses inland and coastal waterways to move freight from major domestic ports to its destination.)

A ship from Asia using the Suez Canal could stop in Halifax to lighten the load, allowing it to enter New York Harbor to complete its unloading. Or that same ship could unload its entire shipment of containers to smaller ships that can ply the Great Lakes and shallower ports along the East Coast. This short sea shipping service is not yet operating extensively, but the prospect of new mega-ships makes it a viable option. Conceptually, it is like a 747 flying between major international capitals where passengers disembark to take smaller planes to regional destinations.

In response to the increases in traffic in New York harbor, the Port Authority is not only deepening the sea lanes but increasing the capacity of the port to handle container traffic. This presents a land-based challenge to the Port, as it is very difficult to increase land holdings in this major metropolitan area. Thus, the Authority is trying to establish a series of inland ports.

The idea is to unload the containers to rail cars and barges and ship them to intermodal facilities inland where customs inspection, transfer of containers to trucks, and breakdown of containers with more than one customer’s products can take place. A pilot program is operating up the Hudson River by barge to Albany, New York, and agreement has been reached with CSX Railroad to establish an inland port in Buffalo. Other such facilities in Pittsburgh and Harrisburg, Pennsylvania, are under consideration.

Because 60 percent of containers have contents destined for more than one customer, the opportunities for final assembly, warehousing and distribution jobs in places like Buffalo are attracting the attention of developers. In addition, the increased volume from Halifax and even Vancouver and Prince Rupert, British Columbia, present an intriguing opportunity for Buffalo.

The rail yards in Toronto are as hemmed in by development as the Port of New York and New Jersey. It has been reported that it can take up to three days to unload a container from the train to a truck in the Canadian National Railway (CN) yards. A high proportion of the goods entering Halifax are destined ultimately for the U.S., and the trip from Buffalo to Toronto is only about two hours by truck. Economic development and community officials in Buffalo are promoting the idea of establishing an intermodal transfer yard to serve the four railroads that enter their market (CN, CSX, Norfolk Southern and Canadian Pacific). Cargo from containers destined for the U.S. would go on from Buffalo and Canadian goods would make the two-hour trip to the Toronto metro area or other destinations in Canada.

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