Cargo conundrum faces Maine maritime officials

4:52 PM, May 3, 2012   |    comments
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PORTLAND, Maine (NEWS CENTER) -- The sudden shuttering of a weekly container cargo service between Halifax, Nova Scotia, Portland and Boston has left businesses that used the service scrambling and maritime officials looking into other opportunities.

Late last week, American Feeder Lines announced it would no longer be running its weekly container service between the three ports.  The company cited low container volumes and a loss of  private investment as the reasons for the move.

"The biggest impact is on the shippers that were using the service," stated John Henshaw, executive director of the Maine Port Authority. "Obviously they were only using the service if it was in their interest to do so.  They were either saving time or saving money and so those shippers will have to find other routes to market or to receive their imported goods in Maine."

The discontinued cargo service is at least the fifth time since the early 1990's that cargo service between the Port of Portland and other ports has come and gone, but industry experts believe there is enough business to support a similar venture.

"As a state, we can fill every container outbound that comes in inbound," he said.  "Ideally, we believe that this port could support two services, one operating down to New York and one operating east to Halifax."

"It is challenging.  It requires the right vessel, it requires the right itinerary.  The Boston, Portland, Halifax itinerary seemed like it was an appropriate one.  The vessel that was used here might have been too large for the service, at least from the outset.  Perhaps as you build volumes over time you might bring on a bigger vessel. Obviously a bigger vessel is more expensive to operate."

"We know there is volume in the state of Maine that can move very effectively, and most of it is moving by truck and some of it is moving by rail, but when we begin to see the all water service moving in, there is an advantage for time, there is an advantage for cost, and having that come directly from Halifax in to Portland makes a lot of sense for the shipper because he knows it is going to stabilize his rates in the long run," explained maritime consultant and former Transportation Director for the city of Portland, Captain Jeff Monroe.

"What the feeder service was trying to capture was the cargo that was moving already, but moving through other seaports," he added. 

"when a feeder service comes in, number one it has to have right sized ship, it has to have the right sized pricing, you need some incentives on the table -- and the bottom line is if any of those things is outside of the model, then the service is going to fail.  In this particular case, you had the right amount of cargo, but you had the wrong size ship.  I will use the analogy, you were basically using a bus to move the amount of volume that would fit in a van."

Both men agree that a $5.7 million facility upgrade going on at the International Marine Terminal on Portland's waterfront is vital to retain current business and to attract more cargo shipments in the future.

"If you don't have the infrastructure in place, if you don't have the ports, then the people who are dependent on transportation are going to be held hostage by a small group of providers," said Monroe.

"If it were easy, anybody would do it," said Henshaw.  "But no, it is hard, and it takes a lot of work, and it takes some stamina.  It takes obviously some investment to stay the course long enough to build a sustainable service."

 

On Friday, the administrator of the U.S. Maritime Administration, David Matsuda, will be in Maine to tour port facilities in Portland and Searsport, and meet with members of the local business community to discuss future opportunities for the region's cargo needs.

"There is definitely an opportunity there," said Henshaw as he surveyed construction work being done at the terminal.  "It is a matter of putting those things together over the long term to make everybody successful."

NEWS CENTER

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