CN: Bids For Halterm

CN Looks to Create “Prince Rupert (BC) of the East [1] ” to Challenge PNYNJ North Atlantic Dominance, and Gain a Big Chunk of Eastern Container, Agriculture, and Auto Traffic.

06 December, Halifax NS – Halifax is Canada’s fourth-busiest port in terms of container traffic, behind Vancouver, Montreal and Prince Rupert in northwestern British Columbia. CN has an ownership stake in the hugely successful Port of Prince Rupert, and believes that success can be replicated on the east coast. Fast-growing Halterm has expanded its container volume by 50% over the last five years, and ships 60% of its volume via CN. With more rail capacity, Nova Scotia stands as a good way around U.S. port congestion.

Halifax, NS: Rendering of ca . 2020 completed Step One extension of the south end terminal berth by 221 m (725 ft.) to 881 m (2890 ft.), which is adequate to dock two Neopanamax vessels. {}.

Expanding the expansion plan

Halterm has been expanding non-stop for years. The port’s 16 meter (52 feet) draft and 1.13 million TEU capacity through its two terminals, saw 50 percent growth in the last five years. It’s current two-step port expansion program aims at a permanent solution to the mega-ship calls anticipated by 2020. {Hugh Morley, Journal of Commerce 06.Dec.2018.}

The first step is only a stop-gap measure. Halterm recently awarded a contract to kick-off the build of a temporary berth extension at that will allow for two large ships to tie up at the same time. Currently Halterm can dock and reach on the largest container ships, but only one at a time. Expanding the south end terminal berth from 660 meters (2,165 feet) to 881 meters (2,890 feet) will allow two 10,000 TEU vessels to tie-up at the same time. The extension is scheduled to be complete by 2020.

The second stage of the plan is to implement a long-term solution to the vessel and volume growth challenges. Various plans are under discussion, including a HPA proposal to develop adjacent port lands and some of the adjoining CN rail yards, but there isn’t yet a plan to proceed.

More trains need more tracks

CN backs the efforts to achieve two-ship capacity, and to expand the take-away on 3700-meter (2.3 mile) -long trains, according to CN CEO Jean-Jacques Ruest {Rick Grant, Financial Post 05.Dec.2018}. Currently, the terminal track network is not big enough to assemble the very long double-stack trains. Doubling the Halterm terminal tracks to eight (from four) would allow for an entire train to be made up. New equipment at Halterm would also be required. Presumably, one train would then be made up in Rockingham with containers bound for Fairview Cove and CN’s north-end intermodal facility {Peter Ziobrowski, Shipping News, Chronicle-Herald 11.Dec. 2018}.“We’re willing to put in some of our rail infrastructure to create a solution for the big trains,” Ruest said {Grant}.

If the track expansion isn’t feasible, CN might instead run a second train. CN has previously operated two trains daily from the Rockingham yard along the Bedford Highway. They were consolidated into a single long train with the economic downturn in 2008. Two two-plus mile trains a day would strain the current operation {Ziobrowski}.

Who will pay?

Transport Canada recently rejected the HPA’s request for $225 million for the estimated $550 milllion dollar Halterm expansion. Perhaps CN’s take-away ability to catapult Halport to the top tier of North Atlantic ports will change the government’s thinking.

If not, CN seems determined to find a partner who will dance. CEO Ruest said there are two other ports the railway is looking at as well, one in Nova Scotia and one on the St. Lawrence River. “CN is action-oriented on this file,” Ruest said. “We need to act in 2019” {Grant}.

[1] CN CEO Jean-Jacques Ruest {via Grant, FP}