PSA wants to acquire Ceres terminal
Port of Halifax likely comes out ahead if merger allowed
The long-rumored acquisition of Ceres Fairview Cove by PSA Halifax looks to be in the works.
A news release from the federal Competition Bureau indicates it is looking into the purchase to determine "whether the proposed transaction is likely to result in a substantial lessening or prevention of competition for marine carriers" calling in Halifax.
The bureau has a specific concern that PSA may have the ability to impose a material price increase or service level decrease on offerings to marine carriers. The bureau has received federal court orders to collect documents from the two terminal operators.
Historically, there was some competition for carriers between Ceres and Halterm. When Ceres began operating Fairview Cove in 1982, the company's founder, Chris Kritikos, was successful in bringing ACL and Hapag-lloyd to the new terminal by offering better rates.
Ceres’ first year in operation at the Port of Halifax saw the terminal handle 55 per cent of the port's total volume. Almost 40 years later, ACL and Hapag-lloyd both still call at Ceres Fairview Cove, though ACL did switch back to Halterm for a period.
Ceres Terminals was acquired by Japanese shipping company NYK in 2002. That year, Ceres renewed it lease on the terminal for another 20 years. In 2019, Macquarie Infrastructure Partners acquired 100 per cent of Ceres from NYK. Macquarie was the owner of Halterm before it was sold and renamed PSA Halifax in 2019.
The merger likely makes sense. The Port of Halifax is competing for traffic with Saint John and Montreal, as well as ports on the U.S. East Coast. Shippers are looking for good rates but also the ability of a terminal to turn a ship around in a timely manner.
With a single terminal operator, smaller ships could be sent to Fairview Cove, freeing up the south-end terminal for larger ships. This should reduce waiting times and improve port efficiency.
Due to increasing ship sizes, some Ceres customers have on occasion needed to be serviced by PSA because of air draft issues with the bridges.
Macquarie is interested in the terminal as an investment. PSA is interested in the terminal to move cargo. The port should come out ahead if the merger is allowed.
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