The Port of Montreal's giant dockside cranes are once again picking up the pace as the outlook for global shipping begins to brighten.
But ambitious plans for a major capacity expansion at the sprawling facility will have to be scaled back as a result of the impact of the global economic slowdown, says president and chief executive officer Sylvie Vachon.
In 2008, during what turned out to be one of its best years and before the effects of the meltdown began to be felt, the Montreal Port Authority (MPA) grandly announced an ambitious $2.5-billion project - called Vision 2020 - to upgrade and expand handling and terminal operations. The multiyear program was billed as the first major expansion of the port, a key gateway for cargo shipments for Eastern Canada and the U.S. Midwest, in two decades.
In the cold hard light of the still fragile economic recovery, however, the MPA will have to settle for a reduced version of Vision 2020, said Ms. Vachon, who took over as CEO last August after becoming the interim chief in March in the wake of the sudden departure of her predecessor, Patrice Pelletier.
"This is going to be a slow recovery," she said in an interview. "It's going to take two to three years just to get back to 2008 levels, which was after all a record year."
"Now, with traffic closer to 2005 and 2006 levels, we have to revisit our development programs. It's an opportunity to perform a deeper analysis of what we need and make some good choices," she said about the project.
It's too early to provide details, but one thing is clear: the goal is no longer to triple container capacity to 4.3 million 20-foot equivalent units, she said. Equivalent units is a measure the shipping industry uses to compare volumes.
Last year, the port's handling of equivalent units fell 15.3 per cent to 1.24 million.
The total for cargo of all types handled in 2009 was 24.5 million tonnes, a 12-per-cent drop from 2008 that reflected the steep downturn in global traffic as exports and imports fell dramatically.
Ms. Vachon sees a "slow recovery" as signs of life in international trading begin to emerge.
Recent growth in some categories of dry bulk cargo traffic, such as iron ore, could be a sign that a solid revival is under way, she said.
A key to the port's ability to bounce back is its growing diversification of markets, with less dependence on the North Atlantic routes to Europe and expansion of new routes in the Mediterranean, the Caribbean, Latin America and Asia, she said.
Market diversification helped offset the impact of the downturn, Ms. Vachon said. Container traffic to and from the Mediterranean actually grew in 2009, by 5.5 per cent over the previous year in the number of 20-foot equivalent units.
Another bright note was the rise in marine grain shipping traffic, up 14.7 per cent over 2008. The fall in shipping rates during the recession had a positive effect on shipments of Canadian wheat headed to Asia because it became more competitive with grain from Australia.
Ms. Vachon said the MPA is also looking to lure more cruise ships to its passenger terminal in Old Montreal.
Among the ideas being looked at are a refurbishment of the Alexandra Pier passenger terminal, as well as building a tourism and entertainment complex accessible to passengers and local residents alike.
The St. Lawrence River is an increasingly popular cruise-ship destination and the Port of Montreal wants to get a bigger piece of that business, Ms. Vachon said.