Tagged: John Chisholm
James and Deborah Fallows have been visiting remote corners of the US by small plane to tease out the secrets of successful local economies. In Eastport, Maine, they heard lots of talk about the potential of Eastport’s deep, ice-free harbour, and relative proximity to Europe, to attract European trade. I noted that the same case has been made for Canso, where construction of the causeway to Cape Breton in 1955 inadvertently created a similarly deep, ice-free superport.
Inveterate boosterism deflator Tim Bousquet of The Coast, a Halifax newsweekly, isn’t impressed:
I think boosters of both the Canso and the Eastport “superports”—and you and Fallows, too—are making the same mistake in logic. No shipper wants to use the North American port that is closest to Europe. That makes no sense at all.
Think about it. You are the manager of a German manufacturing firm, and you want to export to North America. You’re not going to sell many widgets in Canso or in Eastport. Instead, your primary market is going to be places like New York City, or Chicago, where there are millions of people and lots of industry to buy your widgets.
So how do you get your widgets to Chicago? Expensive and light stuff, you can fly directly there. Everything else has two legs: one by sea, and one by land.
The sea part of the voyage is relatively inexpensive. You can stack a gazillion of your widgets in the new post-Panamax ships. A small, underpaid crew from the Philippines steering a ship flying the flag of a lightly regulated country like Liberia doesn’t cost much.
The land part of the journey, however, is expensive. You’ve got to divide up your gigantic cargo and divvy it into a thousand trucks, each driven by a highly paid (relative to the shiphands) driver, using lots of fuel to get to Chicago. Or, if you’re lucky, you can use rail, which, while cheaper than the trucks, is still much more expensive than the sea voyage, per unit transported per distance.
The guy sitting in Germany isn’t looking for the North American port closest to Germany, but rather the North American port closest to Chicago, or wherever his widgets are going. If that means a longer sea journey, the cost is more than made up for with the huge savings of a shorter land journey. I’m not sure why megaport boosters get this so wrong.
Existing American megaports—New York, Hampton Roads, Charleston—are investing billions retrofitting their operations to handle the post-Panamax ships, and the rail lines are upgrading like crazy, refitting for double-stacked containers and such. There’s no chance—none—that Canso or Eastport ports can match the investment, and CN will never be able to out compete Norfolk Southern or CSX for the American midwest market. Just ain’t gonna happen.
I find this megaport boosterism in Canada a little sad, really, for how delusional it is.
To underscore Tim’s point about the low cost of ocean shipping, John “Johnny Nova” Chisholm, former owner of the massive harbourside gravel quarry at Cape Porcupine on the Canso Strait, once told me he could ship gravel to Galveston, Texas, cheaper than he could truck it to Antigonish.
And ship it he did, in vast quantities.