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Western port investments promise to ease OEMs pain

 

Feeling No Pain

With the opening of its new Vancouver Automotive Compound, CP is increasing capacity and alleviating congestion

Build it and they will come. Scratch that, if there is a need, build it and then they will come.

That was the genesis behind the recently opened Canadian Pacific (CP) Vancouver Automotive Compound (VAC), which opened this past spring in Canada’s third-largest city.

“We had conversations with some of our automotive customers and shippers who weren’t our customers about where their pain points were in their North American distribution networks, and in every single case, the answer was Vancouver,” says CP’s vice president sales and marketing, intermodal and automotive, Jonathan Wahba, who was in attendance at many of those meetings.

Vancouver is Canada’s import gateway for cars coming from Japan and South Korea as well as being a large destination market for cars made in North America, which is the area CP, on basis of those conversations decided to concentrate their efforts.

Jonathan Wahba, CP vice president, sales and marketing Intermodal and Automotive and Tim Quesnel, Ford Canada regional sales manager–Vehicle Sales Western Market Area, cut the ribbon at the new Vancouver Auto Compound (VAC).

“Our OEM customers told us there was a need in the market, which got the wheels turning for us,” says Wahba. “So we went to our real estate and industrial group and said, ‘Here’s the market situation, is there something we can do?’”

That’s when the idea of using 19 of the 100 acres of land adjacent to CP’s main line and its Vancouver Intermodal Terminal took shape.

However, there was one caveat—issued directly from CEO Keith Creel—before the project was given the green light, an anchor tenant needed to sign on first.

Sure enough, when CP went back to some of those same customers who had asked for a solution to their Vancouver issues, Ford stepped up, and bought 50 per cent of the compound on a long-term, exclusive contract.

According to Wahba, the compound will be the destination for all Ford models shipped to the Vancouver market.

Eleven active Ford assembly plants are shipping to the VAC: two plants in Mexico, one plant in Canada and eight plants from the U.S.

In terms of the models at the facility, thre will be Ford and Lincoln trucks, cars and chassis arrving from Kansas City, Michigan, Kentucky, Chicago, Mexico as well as Ford Edge and Flex and Lincoln MKX models from the Oakville, Ont. manufacturing plant.

The VAC can handle 36 multi-level auto racks and has nearly 1,200 stalls for vehicles.

CP has also deployed a new yard logistics system that automates yard processes and supports real-time inventory reporting, to give customers better visibility of their shipments. The system strengthens the company’s damage prevention processes by enabling immediate uploading of inspection images.

That, along with guaranteed access to capacity and direct access to the CP main line, is what convinced Ford to come aboard says Wahba, who also points out the area was in desperate need of an alternative to Vancouver’s only other auto facility—Annacis Island, located on the Fraser River.

For decades, it had served at British Columbia’s main automotive compound, serving a dual purpose: as a destination terminal for cars made in North America and inbound vehicles from Japan and South Korea.

“[Annacis] had a monopoly on the marketplace in Vancouver and with that came longer lead times and higher levels of delay and higher damage levels because of how crowded the facility was,” says Wahba. “You also need to use a short line railway to access facility, which is an additional cost.”

While there is still plenty of land left surrounding the VAC, Wahba says expansion is not in the cards.

“We’re not focused on expanding the 19 acres. What we are focused on is securing additional anchor customers. We’re actively engaged with several OEMs, working with them to move their business to our compound and I would suspect by the end of the year CP will likely have another announcement regarding the Vancouver Automotive Compound.”

 

The Port of Prince Rupert handled a record 1 million TEUs and 27 million tonnes of cargo in 2018. (Prince Rupert Port Authority)

Master of its Own Destiny

The future of Prince Rupert’s port may involve stepping up capacity to reach 7 million TEUs

Prince Rupert Port Authority (PRPA) announced the completion of a container terminal master plan that outlines the potential of future container terminal capacity and sequencing of development at the Port of Prince Rupert. The planning work identifies the long-term potential to develop six to seven million TEUs of capacity through the development of multiple terminals at the Port of Prince Rupert.

The plan’s research, completed with the assistance of AECOM, considered capital costs, operating efficiencies, optimization of construction sequencing to minimize disruptions to ongoing operations, and mitigation of human receptor impacts (air quality, noise and lighting) as criteria to determine the feasibility and sequencing of container terminal potential at the Port of Prince Rupert.

“Conducting this work ensures we have a clear understanding of the future potential for terminal development and contributes to a vision for the future of our container business to respond to the growing market demand for capacity at the Port of Prince Rupert,” said Shaun Stevenson, president and CEO of the Prince Rupert Port Authority. “The terminal development potential identified in the study ensures that we can accommodate the short, medium and long term supply chain needs of Canadian exporters while continuing to provide the unparalleled reach, reliability and speed shippers have come to expect at the Port of Prince Rupert.”

The master planning concluded the potential for further expansion of Fairview Terminal and the development of a second container terminal at the Port of Prince Rupert’s South Kaien Island site. This second terminal features a capacity of 2.5 million TEUs and was identified as the next phase of terminal expansion for the container business at the Port of Prince Rupert following the expansion of Fairview Container Terminal announced with DP World in 2018, increasing its current capacity from 1.35 million TEUs to 1.8 million TEUs by 2022. Both the current Fairview Terminal and South Kaien sites are in close proximity to expanding export logistics operations on Ridley Island, and will fully integrate with these operations following PRPA’s construction of the Fairview-Ridley Connector Corridor scheduled for the end of 2020.

“DP World continues to invest in terminal capacity, including advancing our current expansion project at Fairview Terminal,” said Maksim Mihic, GM of DP World (Canada) Inc. “We fully support the Prince Rupert Port Authority’s development vision which enables Canadian trade and improves the balance between imports and exports through the northern corridor.”

“The Port of Prince Rupert continues to be an important part of CN’s supply chains to and from international markets,” added JJ Ruest, president and CEO at CN. “This strategic port provides a rail connection to key markets and its continued expansion will further solidify the port’s place as a world class gateway. Our recent record capital investments further underpin our commitment to getting Canadian natural resources and consumer products to markets safely and efficiently and the Prince Rupert gateway is key to that strategy.”

The Port of Prince Rupert handled a record 1 million TEUs and 27 million tonnes of cargo in 2018.

“Our planned container terminal capacity expansion ensures Canadian shippers will be able to meet their supply chain needs well into the future and Canada will be well-served in meeting its objectives of growing trade in the Asia Pacific region,” added Stevenson.

 

The vehicle carrier Tranquil Ace docked at the Port of Nanaimo on March 8 to deliver the first Mercedes-Benz cars for the port’s new Vehicle Processing Centre. (Port of Nanaimo)

Open for Business

Port of Nanaimo offers Mercedes-Benz Canada new access to Western Canada

Mercedes-Benz Canada welcomed its first official delivery of vehicles through the newly opened British Columbia Vehicle Processing Centre (BCVPC) in Nanaimo. The Port of Nanaimo and the BCVPC is the first and only Western Canadian entry point for European automobiles. This new all water approach for European—and potentially additional—importers, establishes new cost-effective and environmentally responsible supply chain options for the West Coast of Canada.

“This outstanding new facility represents a new era for our operations, allowing our B.C.-bound vehicles to travel an efficient all-water highway to this important market,” said Brian D. Fulton, president & CEO of Mercedes-Benz Canada. “This second point of access to the Canadian market is an example of our constant focus on innovation, which extends beyond our vehicles to all aspects of our business. I’m proud to be representing the first European automotive manufacturer to partner with Western Stevedoring and BCVPC to use the Port of Nanaimo facilities to deliver our vehicles to the B.C. market.”

Mercedes-Benz Canada’s dealer network comprises 59 dealerships, of which eleven are located in British Columbia. The newly established facility allows for a new shipping route to supply Mercedes-Benz Canada’s B.C. dealerships. Mercedes-Benz passenger cars, SUVs, and vans will travel from the EU to the Port of Brunswick in Georgia, where Sprinter vans will be collected from the company’s U.S. factory, in North Charleston, South Carolina (opened in 2018) before continuing on through the Panama Canal and up North America’s western coast to Nanaimo.

Following the first shipment, new vehicles are expected to arrive every two weeks for the first year of operations, totalling 10,000 within the first year.

The BCVPC will have access to nearly 27 acres of port land, and is projected to boost B.C.’s gross domestic product by $12.2 million in the short term and about $52.7 million over the next five years.

“The BC Vehicle Processing Centre provides an opportunity to showcase how the Port of Nanaimo delivers local benefits with its global reach, with direct shipment of vehicles to our facilities,” commented Ian Marr, president and CEO for the Port of Nanaimo. “This investment, made with key partners, utilized approximately 40 companies and over 50,000 person hours to prepare the processing centre for operation and has diversified our local economy, providing new jobs and important employment benefits. We look forward to attracting more business to Nanaimo and Vancouver Island as a result of this collaborative venture.”

The first shipment from Mercedes-Benz on March 8 was received in Nanaimo and allowed safety protocols to be tested with great success, said acting chair of the Port of Nanaimo, Donna Hais. “We are now anticipating on-going shipments and full production for the Processing Centre—a goal that we have been working towards as a team for over a year and for the benefit of greater Nanaimo and the Vancouver Island Region. Once fully operational, the Vehicle Processing Centre will be able to handle between up to 25,000 vehicles per year in phase one creating 40 to 60 direct full-time equivalent jobs, then expanding as early as 2024 creating 80 to 100 direct full-time jobs.”


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