By R. Bruce Striegler
Port Metro Vancouver is Canada’s largest and most diversified port, moving more than $200 million of cargo daily. It is also the biggest port in terms of export tonnage in all of North America. The Port connects Canada to the world, and the world to Canada, trading with more than 160 economies.
At the end of 2011, Port Metro Vancouver posted solid three-per-cent growth, handling 122.5 million tonnes of cargo. By mid-2012, the numbers indicate the Port is on track for a strong year. Port Metro Vancouver handled 62.3 million tonnes of cargo in the first six months of 2012, up six per cent compared to the same period last year. Foreign tonnage increased to 49 million tonnes, while domestic tonnage is up to 13.3 million tonnes.
“What we have seen to the mid-point in 2012 is continued resiliency in the Canadian export market. Although some Asian economies show slower growth overall, through the port we saw continuing strong demand for Canadian natural resources, with all the major economic benefits that provides for the Canadian economy,” said Robin Silvester, President and Chief Executive Officer of Port Metro Vancouver. “Thanks to capacity-building projects now underway, together with improved efficiencies, and this ongoing demand, we expect to see continued strength throughout 2012.”
Port Metro Vancouver saw mid-year growth in all five of its business sectors:
• Auto volumes of 223,000 units posted a strong rebound, increasing 47 per cent, mostly due to the resumption of imports after the devastating earthquake and tsunami in Japan in March 2011, which shut down a large part of Japanese industry for much of last year.
• Breakbulk cargo of 8.3 million tonnes represented an increase of five per cent overall, with continued growth supported by 5.5 million tonnes of forest products like lumber, logs and woodpulp.
• Bulk volumes rose to 42.4 million tonnes, a six-per-cent increase. Records have been reached with coal up 10 per cent at 16.7 million tonnes, while potash decreased nine per cent to 3.4 million tonnes due to weak demand in the first quarter. Liquid-bulk cargo ended the mid-year up seven per cent to 4.9 million tonnes, largely due to some recovery of crude petroleum exports.
• Container traffic at Port Metro Vancouver set a record in the first half of 2012, growing six per cent compared to the first half of 2011 to 1.3 million TEUs (twenty-foot-equivalent units).
• Cruise passenger numbers are expected to increase by one per cent over 2011, with fewer cruise ship calls, but more cruise passengers. This year, the Port anticipates 191 cruise calls with an estimated 670,000 passengers.
A competitive advantage: uniquely balanced container trade
Silvester says that within the overall growth is an 8.5-per-cent laden container growth, meaning more cargo is being loaded in containers for export to Asian economies. “A unique feature of the container trade in Vancouver compared with any of the other North American West Coast ports is our very balanced trade,” says Silvester. “The primary driver of the container trade is manufactured goods imported from Asia and what is unique about Vancouver is that we have a lot of export trade going back to Asia in those containers.” On average, for every ten containers that are imported through Port Metro Vancouver, nine are exported full of products such as lumber and specialty grain.
Silvester emphasizes the importance of this. “Some people see us as a port that imports a large volume of goods in containers for people elsewhere in North America. Actually, much of B.C.’s forest industry and the related economic benefits to communities are dependent on that container trade.” He explains that a large volume of lumber and a significant amount of wood pulp goes out in containers. “Now, we are seeing considerable volumes of speciality grain exported in containers – about 2.2 million tonnes were exported in containers last year.”
He suggests that increased container shipments of grain is mostly due to the fact that containers give grain exporters the flexibility to send smaller, controlled-size parcels of high-value grain products. “What we are seeing is the grain industry focusing more on top quality speciality products that depend on an efficient supply chain to be shipped to many more diverse markets around the world.”
Guaranteed long-term labour stability
With two long-term labour agreements in place until March 2018, labour stability is a contributing factor to Port Metro Vancouver’s strong position. After two years of negotiation, the British Columbia Maritime Employers Association, the International Longshore and Warehouse Union (ILWU) Canada (Longshore) and the ILWU Canada Local 514 (Foremen) ratified eight-year collective agreements. According to Silvester, the length of the contracts are unprecedented in North America.
“This is an especially important development for the users of the Vancouver Gateway. It has been very significant to be able to go to our customers and say that we now have a guarantee of six further years of stability in key labour areas.” Silvester observes that these agreements help confirm customers’ confidence in the Vancouver Gateway. “In other North American ports, many union negotiations are now underway, which are proving to be quite challenging. The agreements we now have in place in Vancouver are really an important competitive advantage for the Gateway.”
A collaborative approach pays off
The solid mid-year volumes can also be attributed to the success of Port Metro Vancouver’s collaborative approach with senior government partners, terminal operators, shippers and land transport partners to improve sustainability, capacity and efficiency. “The rapid recovery from the CP strike in May was a real endorsement of the collaboration between gateway partners and demonstrates the strength of our collaborative approach,” says Silvester. Government partners brought in swift legislation to preserve the integrity of the Gateway, and Port staff effectively collaborated on an hourly and daily basis with terminal operators, customers and railways to minimize impacts of the labour stoppage. In the end, the disruption caused by the seven-day strike was well on its way to recovery in record time of twelve days. “It is through collaboration that we were able to successfully minimize its impact,” says Silvester.