BELLEDUNE, N.B.–Canadian ports face mounting infrastructure and productivity demands as 21st century free trade deals stimulate increased maritime cargo flows and the trend of vessel gigantism notably by ocean container carriers appears unstoppable. Such a ‘new normal’ outlook dominated discussions at the 56th Annual Conference and AGM of the Association of Canadian Port Authorities (ACPA) hosted by the Belledune Port Authority, New Brunswick, on August 17-20.
“Global trade and transportation patterns are shifting as emerging economies and trade agreements open up new markets,” jointly stated ACPA president Wendy Zatylny and ACPA chair Sylvie Vachon (President and CEO of the Port of Montreal) before participants began their business sessions. They commented, too, that climate change is opening up potential new shipping routes in the Arctic region.
The 18 ACPA member ports handle over 60% of Canada’s waterborne cargo valued at $162 billion annually.
Welcoming the port and transportation industry executives, Vachon noted that while the United States remains Canada’s leading trade partner, Canadian trade with the rest of the world, particularly Asia and the United Kingdom, has risen much more substantially in the past decade.
Mega ships getting still bigger
As still bigger and wider ships offering enhanced economies of scale come on stream, Vachon said “the challenges can be opportunities if managed the right way. There is always room for improvement in the movement of cargo.”
In recent months, giant 18,000-TEU containerships have made their appearance on the high seas initially between Europe and Asia, with Maersk Line, the top box carrier, leading the assault.
These behemoths, more than four football fields long, are currently defined as ULCVs (Ultra Large Container Vessels). So what, observers wonder, will the 24,000 TEU mega vessels with maximum draft of 16 metres now on the drawing boards be called !?
“The size of ships is out of sync with the rest of the transportation chain,” candidly acknowledged Peter Ladouceur, assistant vice-president, international sales and marketing of CN. “There is a lot of impact for all of us.”
As an example, he said in an interview that several years ago a typical ship calling at Vancouver’s big Deltaport container terminal would require 3-4 freight trains to discharge all cargo. “Today, it can be up to 7 trains.”
He described the worldwide trend of ever-larger ships to further shave unit costs as “a relentless force in globalization. What is counting is the end price to the consumer.”
In a keynote speech, federal transport minister Lisa Raitt said that strengthening Canada’s marine transportation and infrastructure networks fell within the context of “an aggressive trade agenda.”
Raitt recalled that the Conservative government has concluded free trade agreements with 10 countries in under sevenyears, including Korea, and is negotiating with 30 more. And the remaining technical details of a Canada-European free trade agreement (expected to be ratified by 2016) were recently completed.
Offering access to Canadian exporters to a market of more than 500 million consumers, Raitt said the Comprehensive Economic and Trade Agreement (CETA) was “broader in scope and deeper in ambition” than the 20-year-old North American Free Trade Agreement (NAFTA).
“Once implemented, it will cover virtually all sectors and aspects of Canada-EU trade, including transportation.”
Following the launching in 2006 of he Asia-Pacific Gateway and Corridor Initiative in 2006, some $1.4 billion has been invested in various projects in partnership with all four western provinces municipalities and the private sector, Raitt said.
Over the same period, the Canadian authorities have also announced 39 strategic infrastructure investments in nine provinces under the $2.1 billion Gateways and Border Crossings fund.
The latter have included investments in the so-called Atlantic Gateway and Trade Corridor where an integrated multimodal system is being expanded.
“We have demonstrated the power of collaboration, engagement and public-private partnerships to achieve a common goal,” Raitt said, adding: “And we continue to help the economy by strengthening supply chains and making the most of trade opportunities in important international markets such as Asia, Europe, and North and South America.”
Raitt underlined the need for “world-class infrastructure as the platform on which to base our country’s economic productivity.”
In this regard, Charles McMillan, professor of international business at Toronto’s York University, suggested that Canada was performing better than the United States in maintaining infrastructure.
“Because of gridlock in the United States, Canadian gateways can sometimes represent a viable alternative to the US for
shippers trading with North America.”
Congestion or waterfront labour issues at US ports periodically results in some US-bound shipments being diverted to Canadian ports.
In the latest example, cargo interests began diverting substantial volumes of US-bound containerized freight through PortMetroVancouver and Prince Rupert as a hedge against possible labour disuption associated with union negotiations at US west coast ports.
Ranking of Canadian ports on productivity
On the productivity front, Joseph Bonney, senior editor of The Journal of Commerce, a widely-respected US trade publication, pointed out that berth productivity and terminal performance were not viewed in the same manner. “Carriers want ships worked as quickly as possible. Cargo interests are more concerned with overall terminal performance.”
Where do Canadian ports rank on the productivity scale of container moves per ship per hour?
According to JOC estimates, ports in Asia are generally more productive than those in the Americas, Europe and the Middle East, though Jebel Ali and Khor were comparable. The world’s leading ports situated mostly in China are handling between 100 and 120 container moves per ship per hour. The top US ports of New York/New Jersey and Long Beach come in at 80-85 container moves per hour. Canadian ports remain some distance away: Prince Rupert at 72, Vancouver at 68, and Montreal and Halifax both at 51.