Why shipping developers think the time is right to build a container terminal in Sydney

Ports Day in Sydney has transformed in recent years into a hotbed of discussion about the potential of building a container terminal in the harbour and this year, attendees from all facets of the shipping industry say the time is right to make it a reality.

The big announcement this week came from the Canderel Group of Companies, based in Montreal.

Jonathan Wener, the chairman and CEO, told a gathering at the Joan Harriss Cruise Pavilion that his company is ready to build a logistics park to be called Novazone next to the harbour.

What is a logistics zone?

Logistics refers to the repackaging or reassembling of goods off-loaded in the port and sent on to other centres.

"If you're Walmart and you have, as an example, a store in Chicago but your distribution warehouse is 500 miles further west for processing, or 500 miles further south, the goods have to be touched twice instead of once," said Wener.

"So, the Home Depots, the Walmarts and the others say, 'Well, I don't need all those other warehouses; I have one right next to the port. I'm going to designate that port as the spot where all my goods go, so my major warehouses are going to be there.'"

The port and logistics zone have a symbiotic relationship, Wener said.

What about the ships?

The first step in planning and building a logistics park is making sure there will be viable container traffic.

To that end, Harbor Port Development Partners has been working on behalf of the Cape Breton Regional Municipality to market the port and co-ordinate potential investors, marine interests and developers.

A hub that's big enough

Barry Sheehy, with Harbor Port Development Partners, says the shipping world today is under tremendous cost pressures and companies are consolidating.

"Part of the answer for them is the ultra-large container ships, which are much more efficient," he said.

That means the industry will want a hub that can manage these larger vessels.

Why is Sydney ideal?

Sheehy says Sydney's harbour is ideally positioned to be that hub because it's ahead in depth, environmental approvals and, most recently, a designation of Cape Breton as a foreign trade zone.

"We have a lead," he said.

"But if we dawdle, or if we fumble, if we fail to act and we dither, then a solution will evolve that does not involve Sydney. That's the risk."

Numbers being crunched

A feasibility study is expected this summer from the China Construction Communications Company. Then, Sheehy says, the biggest step will be to finalize an economic model using real figures to pitch to potential clients of the port.

"We are negotiating with all the shipping firms at the highest level but we have to have an economic number. We have to be able to tell them the costs," he said.

"Those numbers are very complicated and are being crunched now."

Legacy project

Wener sees Novaporte as the Sydney port as been branded as a legacy project.

He saysthe circumstances were not in favour of a container terminal in Sydney because "the ultra-large container vessels were not on the ocean."

Today that's not the case and there will be 100 ultra-large ships sailing by 2020 "with nowhere on the East Coast to go," Wenersaid.

'The stars have aligned'

"This is the only harbour that's entitled environmentally, permitted, dredged, wide enough, calm enough and six miles off the great circle route and the Atlantic gateway. So the moment's arrived where it's right," he said.

"All the stars have aligned and we've seen the shippers see the vision and they're anxious and we're moving forward. Our hope, our wish is that in the next 12, 18 months, the shovel's in the ground and the port is under construction."