HALIFAX — Dwindling container traffic at the Port of Halifax has forced CN Rail to reduce its daily service from two trains to one longer unit.

According to local reports, the railway still plans to move the same footage of intermodal traffic with the longer train each day. More cars can be added later, if business picks up, says spokeswoman Julie Senecal.

According the port authority, container traffic was down 20 percent during the first half of this year, compared with 2007, which saw an 8 percent drop from the year before. Containers make up about 35 percent of the cargo handled by the port.

The high price of fuel, the slumping U.S. economy, the high cost of the Canadian buck, and our struggling manufacturing base are all factors, officials said.

CN train leaves Ceres container terminal in Halifax

One problem with Halifax, says Mary Brooks, a transportation expert at Dalhousie University, is that its port is too far from where goods are produced and too small a city to buy them, increasing the cost of rail and trucking services.

The news isn’t good for Atlantic business leaders and politicians that envision the region being transformed into a premier 21st century trade gateway for North America.

Recently, Nova Scotia announced a new Gateway Logistics Park and highway improvements in the region to attract more business.

Industry has spent the last few years lobbying for a reduction of trade barriers and uniform transportation rules, as well as infrastructure enhancement partnerships with bordering U.S. states like Maine.

The concept, dubbed by some as "Atlantica," involves the creation of a major trade corridor extending from the Port of Halifax through New Brunswick and Maine to Ontario, Quebec, and New England, encompassing a wide variety of transportation modes.