AIMS study shows that private sector management, not
a public port authority, is the way of the future for the world’s great ports
[HALIFAX] — AIMS today released Port-Ability: A Private Sector Strategy for the Port of Halifax. (requires Adobe Acrobat Reader) This paper represents an important step forward in not only understanding the major changes taking place in the marine transportation industry, but also the opportunities those changes offer to Halifax. “It is clear that the global trend towards private sector ownership, or at least management, of ports and the accountability and incentives that come from that, has been the driving force behind most of the global port success stories,” says Brian Lee Crowley, AIMS President and one of the papers co-authors. The other co-authors are Charles Cirtwill, AIMS Co-ordinator of Communications and port analyst James Frost.
According to the report, for Halifax to achieve a position as a true global player, it has to get past the limitations of Canada’s public port authority structures and secure a private sector-driven solution modelled on the successes achieved elsewhere. The report lays out the benefits to be gained through a private sector joint venture operating a global trans-shipment terminal capable of handling the biggest ships on the drawing board and then some – a joint venture which should include at least CN and either a global shipping line or a global terminal operator in order to guarantee the necessary volume of containers and then move those containers to market at the cheapest possible price.
“Only the private sector can deliver success to Halifax in the time we have left,” says Crowley. The authors take a serious look at the “ten-year window” which has been cited by most port analysts over the past few years – a decade that offered Halifax the opportunity to exponentially increase its port traffic and become an indispensable piece of the global marine puzzle. Their conclusion is that, after ten years of talk, Halifax’s ten years are almost up.
Halifax’s share of the North Atlantic market has stagnated in the past decade and, within a generation, its ranking among world container ports has slipped from 33rd to 90th. While increases in traffic in the last two years have been seen as cause for optimism, this is dangerously misleading: that traffic increase has been solely the result of congestion at US ports like New York/New Jersey. However, New York/New Jersey are moving aggressively to remedy this problem with US$3.7 billion in port improvement projects on the drawing board and plans to spend US$1.8 billion in the next five years alone.
Port-Ability argues that there is still time – barely – for Halifax to leverage both its current competitive position and global industry trends to effectively respond to this massive US investment. The study looks at Halifax from a cost, time and distance perspective and finds that, while there are areas for improvement through expanded volumes and increased efficiencies, Halifax can, at least in the near term, compete effectively with its US rivals.
Over the longer term, Halifax faces a much more significant challenge. The globalization of the marine transportation industry has been led, in the main, by the established terminal operators aggressively exporting their expertise and deal-making skills to all parts of the world. This has resulted in a remarkable world-wide simultaneous move towards port privatization, creating what most major port developers agree on as a limited window of opportunity for ports to become established as truly international players. If Halifax remains largely outside the emerging world-wide networks of privately owned or managed ports that now dominate world container traffic, Halifax will almost certainly cease to be a significant player in the container traffic business.
In his foreword to the report, Professor Michael Ircha, an internationally known Canadian expert on port governance, says Port-Ability provides a wealth of relevant and informative comparative data on port experiences around the globe. Ircha calls the study a timely and useful contribution to the marine transportation industry in its exploration of best port governance and management practices.
For further information, contact:
Charles Cirtwill, (902)-429-1143
Brian Lee Crowley, President, AIMS, 902-499-1998
James Frost, (902)-429-3121