With capacity becoming tight and future growth prediected, the Port of Vancouver has a plan
Ports don’t create trade, they facilitate it.
That’s the opinion of Peter Xotta, the Vancouver Fraser Port Authority’s vice president of planning and operations. And there is plenty to facilitate.
After a record-setting 2017 the Port of Vancouver has only seen volumes rise this year, with mid-year overall cargo hitting 72 million metric tonnes (an increase of 4.4 per cent) and containers reaching 1.64 million TEUs.
With this kind of volume, and the recent ratification of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which is expected to bring billions of dollars more in trade, there are concerns about Canada’s ability to capitalize on future opportunity and transport goods in and out of the increasingly busy West Coast, particularly Vancouver.
“Part of the narrative around Canadian supply chains—and Vancouver specifically—has been concerns around capacity or congestion and we’ve been involved in some initiatives at the forefront of acknowledging where we have some bottlenecks and trying to address those,” he says.
“It’s not about trying to pull the wool over anybody’s eyes, because customers know full well when they’re experiencing good service or not, so we’re trying to act as a catalyst for having the right conversations.”
The Deltaport Terminal, Road and Rail Improvement Project will allow for an increase in container capacity at the GCT Canada-operated Deltaport terminal of 600,000 TEUs.
The gateway gang
What does that look like?
Since 2009, $7.5 billion has been invested in port infrastructure to support port activities, and that doesn’t include over $2 billion in private investments in bulk terminals facilities.
Much of the funding has come from the federal level, under two governments and various programs. The latest source of funding has come in the form of the National Trade Corridor Fund, under the auspices of Transport Canada’s Transportation 2030 strategic plan.
According to Xotta, the port authority’s response was to work with local stakeholders to maximize the region’s opportunity under the umbrella of the Gateway Transportation Collaboration Forum (GTCF). It consists of the B.C. Ministry of Transportation and Infrastructure, the port authority, TransLink and the Greater Vancouver Gateway Council.
“It’s kind of unique in that it was the stakeholders locally acting as self-catalysts to put together as comprehensive and cohesive a message to Ottawa about what the priorities were,” says Xotta.
The ‘Greater Vancouver Gateway 2030’ was the GTCF’s strategy for infrastructure investment and nearly 40 transportation projects were identified, with the port authority submitting nine funding applications, encompassing 17 of the 40 projects, to the National Trade Corridors Fund.
Earlier this year, the federal government announced funding commitments of more than $200 million for Gateway 2030 projects.
That remarkable success was in part because the government recognized the importance of the Vancouver Gateway, says Xotta. “They recognized the diligence that had gone into assessing and identifying those priorities and recognized that deploying capital in this region will allow us to continue the growth trajectory we’ve experienced as a country and in Vancouver.”
Included on the list of ongoing projects is the Delta Terminal, Road and Rail Improvement Project, a partnership between Deltaport operator Global Container Terminals (GCT) Canada. A series of upgrades to existing transportation infrastructure serving Deltaport terminal, including reconfiguration of the intermodal yard will allow for an increase in container capacity from 1.8 to 2.5 million TEUs.
The introduction of semi-automated operations is the key to increasing capacity and velocity. Eight electric low-emission, wide-span Kuenz intermodal cranes lift containers on and off rail cars. The cranes are fed by manually-operated auto-decoupling yard tractors that deliver containers from the vessel. The containers are dropped off at the rail transfer facility.
The port authority has also approved the permit application for the Centerm Expansion Project and South Shore Access Project. With construction set to begin in early 2019, the projects at Centerm container terminal, operated by DP World Vancouver on the south shore of Burrard Inlet, would increase peak handling capacity from 900,000 to 1.5 million TEUs.
The proposed Roberts Bank Terminal 2 Project is currently undergoing a federal environmental assessment by an independent review panel, under the Canadian Environmental Assessment Act, 2012 (CEEA).
Pending approval, construction of the 2.4 million TEU container terminal is expected to be complete by the late 2020s.
The Tsawwassen Container Examination Facility for the inspection of shipping containers imported through Deltaport, in partnership with Tsawwassen First Nation and the Canada Border Services Agency (CBSA), has been completed and is expected to be fully operational by the end of this year or early in 2019.
According to Xotta, this facility is a big step forward for the Gateway that will drive both security and efficiency while meeting anticipated growth. The facility, which has 15 shipping container examination bays, will join two similar centres on the west coast, one in Prince Rupert and the other in Burnaby.
Global demand for Canadian agricultural products also continues to foster significant private investment in bulk terminal facilities, says Xotta. That investment, he says, has followed the dramatic shift in the annual throughput of agricultural products in Vancouver since 2012, which saw the historical average of 16 to 19 million metric tonnes skyrocket to 26 million in 2017.
Front and centre is the creation of G3 Terminal Vancouver, a new $550 million grain terminal. The “first new grain terminal in Vancouver in generations and the first on the west coast of Canada since 1984,” says Xotta.
And it’s not just grain that is getting investment dollars. K+S Potash Canada and Pacific Coast Terminals (PCT) recently commissioned the opening of a state-of-the-art potash handling facility at PCT’s Port Moody terminal in 2017. Work included modifications to PCT’s existing facility as well as the construction of a new 263-metre potash storage warehouse with capacity for 160,000 tonnes of product.
The Vancouver Fraser Port Authority works with supply chain partners and port stakeholders to build future capacity through increased efficiency, says Xotta and the port does its best “to make sure there is a balance of interests because we need to respect all of those critical players in the supply chain.”
To that end, the emphasis, he says, is on data visibility and transparency.
An example of this is the port authority’s Supply Chain Visibility Project. Launched in 2015 with a $250,000 matching grant in 2017 from the federal government, the project’s goal was to assess real-time information on supply chain performance for all bulk cargo moving to and from the port. This joint effort between Transport Canada and the port authority served to provide visibility into current supply chain performance, better identify rail and road bottlenecks, support the prioritization of infrastructure projects and optimize existing operations.
The initial pilot project tracked bulk grain, coal and fertilizer rail shipments near real-time from the inner provinces of origin through to Vancouver marine terminals to vessels. Future phases will include other commodities, such as forest products and container shipments. The data is made available through a dashboard for all those participating in the project, including CN, CP, terminal operators, Transport Canada and other supply chain participants.
The idea, says Xotta, is that the project could ultimately be a national foundation for supply chain monitoring by the federal government.
“Our suggestion to them has been that as the regulator, this kind of initiative brings an opportunity to assess and know in real-time where the challenges are, and thus where public resources might be best deployed.”
There is very little, ultimately, that ports control, says Xotta, but he feels they can have influence and the strategy should be getting better visibility, which leads to conversations about how to use information technology to predict or anticipate future challenges.
“And the port authority wants to be part of those conversations.”
Maritime Capital: Behind the scences, one organization is leading the charge to make Vancouver a leading world maritime centre
The Port of Vancouver facilitates trade for Canada around the world, but to be considered a leading international shipping centre requires more than exporting grain and importing appliances.
Attracting the businesses behind international trade is the job of the federally and provincially funded Vancouver International Maritime Centre (VIMC), which is focused on attracting new investments and selling the advantages of basing shipping industry companies in Vancouver, especially those in the sector’s lucrative and high-paying service arena.
According to executive director Kaity Arsoniadis-Stein, the VIMC has promoted Vancouver as the preferred global location for the international shipping market. By marketing Canada’s strategic location and business opportunities, the three-year VIMC project has exceeded all its targets and has had an economic impact of over $1 billion. The initiative created well over 200 jobs, in the first year, and has attracted over 16 international companies to date. Renewed funding, notably from the minority NDP provincial government elected in May, is being sought for the pilot program that expired earlier this year and was supported by the previous Liberal government.
“Canada is known for its strong modern economy, universal healthcare system, stable political environment, world-leading banks, high caliber business support services, high-tech capacity as well as easy access to capital markets in North America,” commented Arsoniadis-Stein during a ceremony welcoming the city’s latest shipping tenant: the China Navigation Company (CNCo).
CNCo is a leading provider of sustainable shipping solutions, based in Singapore and held directly by the parent company John Swire & Sons, headquartered in the U.K. The new office is CNCo’s biggest in North America and will oversee the dry bulk and liner businesses under its Swire Bulk and Swire Shipping divisions, respectively.
Some of the global shipping industry companies that have major offices in Metro Vancouver now include Seaspan Corp., Teekay Corp., Pacific Basin Shipping Ltd., Mediterranean Shipping Co. and Methanex Corp.’s Waterfront Shipping Co. Ltd.
“Over the years Vancouver has been a significant regional hub for North America’s shipping activities, with its deep-rooted history in the forestry and mining sectors, along with its role as the main export point for Canada’s vast grain and potash exports to Asia and the rest of the world,” said Robert Heal, general manager commercial, Swire Bulk West Coast Americas. “Through the VIMC, we have learned of Canada’s business advantages and globally competitive standards.”
While the city still trails other leading maritime ports, a recent study highlighted factors that make it an attractive option.
Deloitte’s EU Shipping Competitiveness Study was commissioned by the European Community Shipowners’ Associations to provide data on competitive threats to the EU’s ports and to provide ideas on how to retain and expand market share.
Vancouver is one of five “leading international shipping centres” used in the report’s comparative benchmarking analysis. Singapore, Hong Kong, Dubai and Shanghai are the others.
The report noted that, while most of the five still have minor global market share relative to the EU, “they experience high growth rates and are named the main competitors to the EU for location of strategic, commercial and operational shipping activities.” Vancouver scored well in the report’s regulatory, economic and political factors category.
However, it still lags behind other shipping centres in availability of finance and is even further behind when it comes to local access to the legal, finance, logistics, insurance, brokering, chartering and professional services that are critical to success in the complex business of international shipping.
Arsoniadis-Stein said the report will help the organization’s mandate because it gives Vancouver top scores in critical areas, making it a good place from which to conduct business.
But she said improvements are needed in several areas to increase the attraction of Vancouver to major shipping industry companies, including immigration complications for top executives, which need to be eliminated if the region hopes to attract more head offices.
Arsoniadis-Stein added that, while “Canada has some of the strongest banks in the world, none of them have international shipping expertise, and therefore there is no availability of ship finance. This is a big weakness. Shipping is a capital-intensive industry sector that requires significant investment.”