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Canadian Pacific’s Services Gather Steam

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The Port of Saint John has raised fresh funding for its expansion plans, just as Canadian Pacific Railway (CP) wins a multi-year agreement with CMA CGM Group.

The federal governments in Ottawa and the province of New Brunswick have offered funds totaling C$37.8m ($29.9m) to support the Port’s expansion, which will add a second berth and rail track which will more than double rail capacity.

Transport Canada is allocating C$21m to increase port capacity and another C$21.16m to improve over 100km of inland rail infrastructure between Saint John and McAdam.

The port is already in the midst of a C$205m development project due for completion in 2023 which will raise the port’s box capacity to 300,000 containers. The new funding will further expand capacity to 800,000 units.

Keith Creel, CP president and CEO, said: “This strategic investment will help to improve the resiliency and competitiveness of Canada’s export-driven supply chains, and combined with the increased competition generated by our return, help to transform Port Saint John into a truly global, premier trade gateway.”

Over the past five years, Saint John’s container throughput has surged 52 percent. In the first quarter it was up 25 percent, year on year.

“The port was under-served,” said one forwarder.

CP has been a major driver of this growth. After gaining access to the port in 2020 through the acquisition of the Central Maine and Quebec Railway, CP launched intermodal container services to its new east coast gateway.

The rail company says that its service through Saint John is the shortest route between Atlantic Canada and key North American markets.

The port’s scheduled container traffic has blossomed. Hapag-Lloyd started a service in 2021 and added a second in February 2022, while CMA CGM and MSC also have weekly services to Saint John.

CMA CGM looks likely to increase its activities after signing a multi-year agreement with CP that makes it the line’s primary rail provider in Canada at the ports of Vancouver, Montreal, and Saint John, moving CMA CGM freight from these points to Canadian and US inland markets.

According to CP, the contract “also recognizes the future growth opportunities connected to CP’s proposed combination with Kansas City Southern”, which “will bring expanded market reach and create new efficiencies.”

The planned merger is under review by the US Surface Transportation Board.

Saint John still has some way to go to compete with its larger Canadian rivals, handling close to 87,000 teu in 2021 whilst Halifax processed over 595,000 teu and Montreal, 1.7m teu.

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