Trade with India through the Port of Halifax

Robert J. Dechert, Partner, Gowling Lafleur Henderson LLP, and Past President, The Empire Club of Canada; Aletheia Chiang, Senior Student, Lawrence Park Collegiate Institute; Reverend David Harrison, Incumbent, St. Thomas' Anglican Church, Brooklin, Ontario; Brian Gerrior, National Manager, Import Logistic Services; Glynn Williams, Chairman and CEO, Reliance Aerotech Canada Inc.; Ron Tepper, President and CEO, Consolidated Fastfrate Inc.; Heather Ferguson, President, Hearing Foundation of Canada, and Director, The Empire Club of Canada; David Sood, Partner, Associated Indian Exports, New Delhi; Lisa Raitt, President and CEO, Toronto Port Authority; and Mark Lerner, Assistant Vice-President, Sales, CN Rail.

Introduction by John Niles

Past Presidents, Directors, honoured guests, and members of the Empire Club of Canada:

The original name of what has come to be known as the Halifax Harbour was coined by the Mi'kmaq, who called the area Ji/pug/tug (anglicized as "Che/buc/to").

Either way, it means "the biggest harbour." And it is. It is one of the deepest, ice-free ports along North America's eastern seaboard.

And from 1749 when the British General Edward Cornwallis (whose twin brother became Archbishop of Canterbury and nephew Charles was the famous Cornwallis that fought in the American Revolutionary War) was dispatched by the Lords of Trade and Plantations to establish a city there, on behalf of and at the expense of the Crown, right up until today it has remained an integral link in Canada's trading network and crucial to the economic success of the Eastern region.

As the deepest, ice-free port along the eastern seaboard, the Port of Halifax is responsible for 9,000 direct and indirect jobs, and almost $700 million in economic income. Nearly 2,000 cargo vessels and 100 cruise ships will call into the port annually.

During Karen Oldfield's time as President and CEO her primary focus is to grow the port's containerized cargo business. Over the past several months she has been leading the Port of Halifax's business development initiative into Asia, India, the Indian subcontinent, Europe, the United States and Central Canada looking for opportunities to capture a larger piece of the international trade boom.

Toting the messages of available capacity at the berths, on the terminals and on rail as well as Halifax's strategic geographic location and connections into the lucrative markets of North America's heartland, the port is starting to see some results for its efforts.

After graduating from Saint Mary's and Dalhousie universities, Karen Oldfield began her professional career in 1985 at the law firm of McInnes Cooper, becoming a partner a few years later. In August 1999, Premier John Hamm asked her to take on the role of Chief of Staff for the Premier's Office. For two and a half years, Karen was instrumental in ensuring the strategic plans and priorities of the Government of Nova Scotia were carried out. In January 2002, she joined the Halifax Port Authority as President and CEO.

Currently serving as Chair of the Halifax Gateway Council, Karen finds time to voluntarily serve her community on a variety of boards, including the YMCA, the Greater Halifax Partnership and the Board of Governors of Saint Mary's University. She also chaired Halifax's successful bid to host the 2004 World Women's Hockey Championships. In 2006 Karen was named one of the top-50 CEOs in Atlantic Canada.

Ladies and gentlemen, please greet with me Karen Oldfield.

Karen Oldfield

Ladies and gentlemen, I picked up the Globe and Mail's Report on Business last Saturday and I couldn't believe the headline: "Now it's India Rising."

My first reaction was who leaked my speech?

Then I thought wait a minute, it's nice to see one of our national newspapers finally talking about something we already know at the Port of Halifax.

Trading with India is Canada's next big opportunity. In fact at the Port of Halifax we have already done something about India. I want to tell you what that is and why I believe India is so important for all of us.

Canada is a trading nation. It has international container ports on both coasts. On the west coast there is a little port called Vancouver. You have probably also read a story or two about its biggest trading partner--Asia, the world's fastest-growing economy.

But on the other side of Canada on the east coast there's a little port too that I am rather fond of called Halifax. Because the world is round and because shippers can choose to go east or west, Halifax is also a trading partner with Asia. That's because of the Suez Canal. The Suez Canal lets Halifax and other east-coast ports trade with Asia and India.

For example, a ship leaving the Laem Chabang Port in Thailand with cargo destined for eastern North America will save a couple of thousand nautical miles simply by travelling through the Suez Canal.

Shipping lines are looking to the Suez Canal because it has lots of capacity. The Suez can accommodate both large vessels and a large number of vessels. So the Suez will help us pursue opportunities in Asia. Asia is and will continue to be a key part of our port's growth strategy. That is why we will keep an active interest in the Asia Pacific Foundation.

I am very pleased to see Charles McMillan, a former Director of the Asia Pacific Foundation, in the audience today. I want to thank Charley and his colleagues for their interest and support in growing Canada's international trade on both coasts.

We know the story of trading potential with Asia. But today's story is about the trading potential with the world's second-fastest growing economy--India.

In a few short years we believe the India Atlantic freight corridor will rival the Asia Pacific freight corridor. Think about that for a second--the India Atlantic freight corridor being in the same class as the Asia Pacific corridor.

My focus today and every day is to grow the India Atlantic corridor and to capture as much of the freight on that corridor as possible.

And here's why. India has 17 per cent of the world's population. Its annual growth rate is expected to get to the double digits. Its current trade is valued at $800 billion per year. India's trade with Canada is less than 1 per cent of that trade. Just a little room for growth, wouldn't you agree?

If I could sum up India in one word that word would be opportunity. For Canada it is a tremendous opportunity. But how do we turn that opportunity into results?

I want to tell you about a couple of companies that are turning trade opportunities with India into results. The companies are household names in Canada and they are achieving those results through the Port of Halifax.

Let me start with the Canadian Retail Shippers Association, the CRSA. The CRSA represents 12 of Canada's biggest retail organizations including Sears, Sony, Eddie Bauer, and Reitmans.

Twenty months ago they created an east coast distribution hub through the Port of Halifax. They did this because a few years ago there were labour conflicts on the west coast. Of course that affected freight owners. CRSA had to make sure their products got to market. They realized they couldn't depend on just one port. So they implemented a multi-port strategy.

Brian Gerrior chairs the CRSA. He's also the National Manager for Import Logistics Services for Sears Canada. Brian will tell you they are always looking for ways to cut time and cost out of their supply chain.

They are already doing a significant amount of business with India. Brian works with David Sood. David's company is Associated Indian Exports. David is a key buyer for Sears in India and he travelled here all the way from New Dehli. We appreciate you joining us David.

CRSA figured they could cut transit time for shipments from India in half from 46 days to 23 days by shipping through Halifax, not the west coast. From factory to store not in 46 days but in 23 simply by going through the Port of Halifax.

These reduced transit times give CRSA members an advantage. They get to replenish stock much more easily within seasonal cycles, obviously quite important when you manage both retail stores and catalogue operations.

CRSA has the flexibility of working with ports on both coasts. But they chose the Port of Halifax because of these significantly reduced transit times.

When we were working out our deal with the CRSA, there was one more piece that needed to be in place. That piece was the intermodel service getting the goods out of the port. Halifax has one rail service but the CRSA, was used to having two rail services to choose from. So they also wanted a trucking service before making the move to Halifax.

CRSA was looking for a trucking company with transload services so they could distribute to their retail stores east of Montreal. Transload means a place where goods are unloaded, sorted and reloaded. CRSA found what they were looking for in Armour Transport. So 20 months later CRSA members like Sears run a backlog-free operation through the Port of Halifax.

Next time you're in your local Sears store the items you buy that say "made in India" came through the Port of Halifax.

The next story I want to share with you is about Canadian Tire and their transload distribution partner Consolidated Fastfrate.

It's a formidable team--Pat Sinnot of Canadian Tire and Ron Tepper from Consolidated Fastfrate. When you hear them tell this story it's a lesson in basic math.

Canadian Tire carefully manages its supply chain and is always looking for ways to reduce time and cost. Canadian Tire imports a lot of goods from China. It's increasing its imports from India, but the bulk of its imports come from China through the Port of Vancouver. Then it goes by rail to Calgary, Toronto and Montreal for distribution by truck to stores throughout Canada.

Ten per cent of Canadian Tire stores are east of Montreal. So trucks delivering product to those stores were returning empty. Empty trucks equal lost cost. Pat identified the need to have trucks travelling full in both directions. To make that happen he needed to bring cargo in through the east coast. It sounds simple. And it was.

In a few months from now, Consolidated Fastfrate will open a 90,000-square-foot transload facility in Halifax. Canadian Tire will be one of its key customers.

The common thread in both of these stories about CRSA, Sears, and Canadian Tire is that there was a supply-chain issue that needed to be addressed. In all cases solutions were found through the Port of Halifax.

We worked with CRSA, with Consolidated Fastfrate and Canadian Tire to find the right solution for everyone. We didn't do it all by ourselves. We worked with our partners at the city, at Nova Scotia Business Inc. (NSBI), at the province and in the business community. We will take that collaborative approach for any organization looking to do business with our port. We are in the business of helping our customers grow and we are in the business of adding new customers.

The Port of Halifax has been involved in international trade since 1749, over 250 years ago. Historically our bread and butter has been with European trade. But in recent years we determined there is a bigger role for us and we should be increasing our contribution to the Canadian economy.

We have tackled this from four fronts. One--growing our existing markets. Two--establishing new markets. Three--broadening our core services to encompass the needs of freight owners as well as shipping lines. Four--finding companies, investors and others who believe in the Port of Halifax and what it can contribute to Canada's international trade.

Before I get into markets and India I want to touch on some of the investment that is happening in Halifax. The year 2007 is a good one for us. Macquarrie Infrastructure Partnership recently bought the Halterm terminal operations. That is a $170-million investment in the port. Cerescorp will soon take delivery of two new super post-Panamax cranes. That is an investment of over $20 million and as I mentioned earlier Consolidated Fastfrate will soon be opening its $14-million transload/distribution facility.

Each of these investments is more than just private money. Each is a sign of confidence in Halifax. At the port we have our own investment program--$135 million over five years. That's over one-quarter-billion dollars in investment.

That's not all. We have plans for a substantial expansion at each of our terminals. That will get us to a two-million-TEU capacity. That is four times bigger than we are today. When you combine this with everything else we have going for us, the future is looking pretty good.

It is so good the province of Nova Scotia, represented here today by Transportation Minister Angus MacIsaac, has made the gateway one of its top priorities. A gateway that has great bench strength provincially and regionally. We have an international airport in a network of smaller regional airports. We have seaports that have built solid businesses in bulk, breakbulk and containerized cargo and we have a strong, supportive business community.

Now back to our markets. We're obviously looking at Asia. There are parts of China in our sight. China has potential for Halifax but its natural alignment with the west coast makes it a big hill for us to climb; not insurmountable but a big hill nonetheless.

When CRSA became part of the Port of Halifax we were introduced to India. As we learned more about India the potential became more and more obvious. We took a page from Pat's book and started to do some math of our own.

If a ship travels via the Suez Canal, India is 1,840 nautical miles closer to Halifax than it is to west-coast ports. India's top exports also match the markets we serve. As well, there is a good match between what our market exports and what India imports.

So we asked ourselves how do we turn this opportunity into results. For the first time in our history we opened an office outside our harbour. We opened that office in India, in Mumbai and New Delhi.

We entered into an agreement with Jeena & Company Global Logistics. They are a well-established organization, owned and managed by the Katgara family. Our relationship with Jeena is less than a year old and we are very pleased with how it is going. We aren't expecting short-term results but we are banking on medium- and long-term ones. We chose India because we believe this is where our growth potential lies as a port, as a province and as a country.

We have high hopes for North America's trade with India, and our specific goal is to establish a relationship between Atlantic Canada and India just like the one between Asia and the Pacific.

As you know Premier Dalton McGuinty recently led a trade mission to India. We took advantage of this opportunity to introduce Jeena to some of the people travelling on this trade mission. Why? Because Halifax is Ontario's port for containerized cargo trade with India. We're your port because big ships just can't go up the St. Lawrence Seaway.

And if we aren't your port then freight owners are paying too much to transport containers and travel time is a lot longer than it needs to be. How can I say this with such conviction? Well in this business time is money. We save time for shippers.

We save time because we have fast access to central Canadian markets and the U.S. Midwest. We save time because we are congestion-free. We have capacity at the berths, on the terminals and on the rail line.

Right now as you know there is a strike at CN. It's affecting everyone across the country. We all hope it gets settled as soon as possible. Now I have just been talking about how the Port of Halifax is Ontario's port for containerized cargo from India. You must be wondering what does that mean for the Toronto and Hamilton ports.

My colleagues from Toronto and Hamilton are here today. They will tell you that we are all part of the freight corridors. Ports, railways and roads in Canada and around the world connect.

How we connect to create freight corridors is directly related to the needs of shippers who are looking for access to markets. Our job is to help them find the best solution. And Halifax is the best Canadian solution for ships travelling through the Suez Canal.

As I said earlier the Suez Canal plays a big part in our growth strategy, especially in terms of India. We already have lines calling on Halifax via the Suez. When we combine these lines with the others calling from all over the globe, we clearly demonstrate we are accessible to world markets.

It may surprise you to know other Canadian ports can't access these markets as easily as we do at the Port of Halifax. This accessibility is real and it is this accessibility that will lead to economic growth and success not only for the Atlantic region but also for the whole country.

Canada is a big country with a small population. We will grow and prosper on the strength of our trade links. We have international container terminals on both coasts. They are vital links to world trade corridors.

This isn't about one or the other, the East versus the West playing both ends against the middle. It is about both coasts working together as assets in a national trade strategy. A trade strategy that sees Canada redefining its niche as an importer, an exporter, a supply-chain contributor and a service provider.

We have to have a strong national trade strategy. We have to work harder at this than other countries. We have to think bigger. If we don't we'll be left behind.

When Minister Pupatello returned from India, she said, "They're not waiting for us."

This is our challenge. We need to capture our share of Asia. We need to capture our share of India and for that matter any other emerging trading partners around the world. Our challenge is also our opportunity.

Yes, as the Globe and Mail said, "Now it's India rising."

And "India's time has come."

But it's also our time as a country to seize this tremendous opportunity.

Halifax will do its share. We'll even do more than our share if that's what it takes.

There's a part for all of us to play. You play your part. Let the West play its part.

Let us play our part. And when we all do our part, Canada will not be left behind.

Thank you.

The appreciation of the meeting was expressed by Heather Ferguson, President, Hearing Foundation of Canada, and Director, The Empire Club of Canada.