Missing boat on port frenzy
Looking south along the Eastern Seaboard, one economic trend cannot be missed. American ports are spending extraordinary amounts of money expanding port infrastructure. We are talking tens of billions of dollars.
Just look at the ports of New York-new Jersey, Virginia, Charleston, Savannah, Jacksonville, Miami and Houston. Each of these ports is investing $2 billion to $4 billion in new facilities, logistics centres, on-dock rail and harbour deepening.
The new American Infrastructure bill will provide even more money, at least $17 billion. In total, U.S. east coast ports will invest upwards of $30 billion.
Why are they spending this money and why should we care? Pay attention as the answers are important to everyone in Nova Scotia and especially Cape Breton. This will affect us.
So, are the Americans crazy? Yes. Like a fox. Trade on both coasts is booming beyond anyone’s expectations or projections. Ports like Charleston and Savannah are hitting record after record in volume. Savannah hoped to reach five million containers by 2025; it looks like this target may be hit this year.
This boom has stretched Savannah’s capacity to bursting. They must expand or blow up. The same story is true all along the U.S. Eastern Seaboard.
This avalanche of volume is wreaking havoc with supply chains. Wonder why products are in short supply and more expensive? Here’s your answer: Big retailers are being forced to abandon lean inventory strategies in favour of having a year’s supply of goods on hand. This is causing shortages of warehousing space and driving up prices.
To make matters worse, there are not enough trains or trucks to move cargo inland and stuff is piling up on docks. The entire logistics system is stretched to the limit.
The only way out is to invest in expanded capacity and that’s just what the Americans are doing. They are scaling for growth. And if anyone knows how to scale, it’s the Yanks. They began the Second World War in 1940 with four aircraft carriers, and by 1945 they had 104 all classes. Absorb that stat.
Projections call for 25 million additional containers coming to the Eastern Seaboard by 2045. Bulk cargo will double, and roll-on/ roll-off (ro-ro) traffic will increase 160 per cent. This means today’s port congestion will get worse if nothing is done.
The good news is this wave of traffic represents an extraordinary economic opportunity for Maritime Canada. But what are we doing to get ready? Well, not enough.
Montreal plans a major expansion across the St. Lawrence River from the city. This will free up valuable land in and around Old Montreal for high-end development, but plans to double volume are unlikely to be realized, given the depth of the St. Lawrence, which restricts the size of vessels transiting the river. But at least they are doing something bold.
Plans to expand the Port of Québec have been derailed for environmental reasons. Some expansion has been planned for the Port of Saint John, N.B., but the capacity added will be measured in hundreds of thousands of containers rather than the millions needed by shippers.
Some capacity expansion is planned for Halifax, but the increase is incremental, measured again in hundreds of thousands rather than millions of containers. Halifax is a wonderful, historic port, but is severely limited in its expansion by centuries of urban development. There is simply no room.
That leaves Sydney as the remaining champion able to accommodate millions of additional containers, along with bulk and ro-ro traffic.
Sydney Harbour (Novaporte) has the space and harbour depth that shippers are asking for. It also has on-dock rail able to accommodate the longest port trains in North America. Sydney has abundant, affordable land inside a Foreign Trade Zone. It is ideally positioned to be a green energy hub. Shipping firms have identified Sydney as the best location for a major transportation hub, and private investors stand ready. At stake are 9,000 full-timeequivalent jobs.
Everything is ready to go. What’s holding it all up? Next time a politician asks for your vote, ask them this very question. By this slender reed, our future hangs in the balance.