Hapag-Lloyd weighs further diversions for containers stuck at Halifax port

Houston — German shipping firm Hapag-Lloyd said on Sept. 24 that it was considering bringing in a ship to divert containers to Montreal from Halifax amid mounting delays at the latter port.

Some containers have been stuck at the Canadian ports of Halifax, Nova Scotia, and Saint John, New Brunswick, for more than four weeks. Hapag-Lloyd diverted six container ships to the nearby ports during a Montreal longshoreman's strike in August to keep cargo moving until the labor action was resolved.

"Other container lines also took similar actions, resulting in unprecedented volumes of cargo in Halifax and Saint John. This quickly led to highly congested terminals, which became unable to operate at their normal levels of efficiency," the company said.

The Montreal longshoremen reached an agreement to return to work on Aug. 23, but the disruption to port activities caused throughput volumes at the Port of Montreal in August to drop by more than half from the same month a year earlier to 77,280 twenty-foot equivalent units, which was also down 37% from July.

Hapag-Lloyd said it expects most of the backlog at the Port of Saint John to be cleared Oct. 3 but was more unsure about the situation at Halifax.

"We are reviewing the possibility of bringing a vessel into Halifax to bring cargo to Montreal where dwell times are currently much better. This has to be carefully planned as Canadian government cabotage laws must be adhered to and we need to ensure that we do not move the problem from one port to another," the company said.

Logistical issues at the Port of Halifax are unfolding as global demand for containers outstrips supply, with shipping rates ticking higher week after week. Across North America, ports are strained on the back of higher-than-normal import volumes from Asia and equipment issues.

Warehouses are also short staffed, making it difficult to unload containers on schedule, one logistics expert said. "Chassis are out for longer periods, so terminals themselves are getting congested," the source added.

With trans-Pacific rates expected to erode downward after China's Golden Week holidays in October, sources expect logistical imbalances to be resolved as carriers have some breathing space.

North Asia to East Coast North America rates have climbed 74% year to date to an all-time high at $4,350/FEU on Sept. 18.