CALGARY, Alberta — Canadian Pacific, which announced today that Hapag-Lloyd will begin regular weekly service to the Port of Saint John, New Brunswick, in 2021, will be disappointed if the port doesn’t land a second ship per week by the end of next year, CEO Keith Creel says.
Port Saint John currently lacks regular transatlantic containership service. But its container terminal is undergoing an expansion, and CP’s acquisition of regional Central Maine & Quebec earlier this year gives CP a direct connection to the Irving short lines that serve the port.
“If we don’t announce another ship coming to Saint John by the end of 2021, and then growth beyond ’22 when all that capacity’s going to be there, we’re not doing our jobs,” Creel told an investor webcast today.
The second weekly call could come from Hapag-Lloyd or a second steamship line. CP, port officials, and terminal operator DP World are in discussions with other shipping lines as work continues on a multiyear project to boost the container terminal’s capacity.
British Columbia ports have gained market share from U.S. West Coast ports over the past decade, something that CP and rival Canadian National hope to replicate on the East Coast with their port partners. The goal is to deliver goods produced in Southeast Asia and Europe to consumers in the U.S. Midwest.
Landing transatlantic container service at Saint John is a first step for a port that CP officials have called a diamond in the rough.
"It's a special day when we get to announce the renewal of a contract with Hapag-Lloyd, our largest customer by volume and a world-class ocean carrier," Creel said in a statement announcing the deal to extend its contract with Hapag Lloyd through 2025.
This summer Hapag-Lloyd diverted ships to Saint John during a dockworkers’ strike at the Port of Montreal, enabling CP to run its first intermodal trains east of Montreal in more than two decades.
CP will begin regular service linking Saint John with Montreal, Toronto, Detroit, and Chicago when Hapag-Lloyd ships begin regular service to the port.
"Having Hapag-Lloyd call the Port of Saint John regularly is the first step in the port becoming a world-class gateway," Creel said. "Through the Port of Saint John, CP enjoys about a 200-mile advantage over our competition into Montréal, Toronto and Chicago. This East Coast advantage bodes well for businesses in Atlantic Canada, customers across our network, and for the broader supply chain. We are only just starting to unlock the potential that exists at the Port of Saint John."
Canadian National serves the Port of Halifax, the Nova Scotia port that is Atlantic Canada’s busiest, as well as Saint John. But CP’s route from Saint John – which includes New Brunswick Southern, Eastern Maine Railway, and the former CMQ – takes a shortcut across Maine.
CSX Transportation’s proposed acquisition of New England regional Pan Am Railways will create a new direct CP-CSX interchange in Maine. Creel was asked if that would lead to growth opportunities for CP and CSX.
“We haven’t looked at it yet, but rest assured we will,” Creel says. “But if you’ve got two like-minded railroads with similar operating models and similar minds about how to grow and with a desire to grow in that low-cost, sustainable, profitable manner, I’ve got to say that it’s going to unlock some opportunities for our customers that don’t present themselves today.”
Creel spoke with analyst Allison Landry at the Credit Suisse 8th Annual Industrials Conference.
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Canadian Pacific expects further intermodal growth from Port of Saint John - trains.com
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