By Keith Norbury, The Duke Point terminal at Nanaimo on Vancouver Island passed a test of its container-handling capability in December when it unloaded damaged cargo from MV Zim Kingston. The container ship made headlines in late October when it anchored off the Victoria, B.C. waterfront after heavy winds had knocked more than 100 containers into the ocean. During its anchorage, things went from bad to worse when some containers remaining onboard caught fire. In December, tugboats and Coast Guard vessels escorted Zim Kingston to Duke Point where the damaged containers were carefully removed. Registered in Malta and built in 2008, Zim Kingston has an overall length of 260 metres and a summer deadweight of 50,782 tonnes.
“It was definitely a challenge because of what was being removed, as opposed to just regular containers,” said Ian Marr, President and CEO of Nanaimo Port Authority. “I think the crews out there did an amazing job, and everybody pulled together to make it happen. I think it bodes well for the future just in showing how ready we are to do stuff. It’s clearly the way we want to go.”
Maksim Mihic, President of DP World (Canada) Inc., agreed that unloading Zim Kingston was an “excellent” test for the company’s Duke Point operation. “It was excellent for us. It was excellent for removing that from clogging the supply chain, but it also proves Duke Point as a viable option,” Mr. Mihic said.
HALF-CENTURY LEASE SIGNED
In February 2021, DP World signed a 50-year lease with Nanaimo Port Authority. The agreement is “an important first step” in a planned $105 million expansion of Duke Point, noted a news release at the time. Project funding includes $46.2 million from the federal National Trade Corridors Fund and $15 million from B.C.’s Economic Recovery Plan. “We are in the process of obtaining the necessary approval permits,” Mr. Mihic said. Once those are in place, engineering requests for proposals will be issued. The project will extend the existing berth to 325 metres from 182 metres at present. It will also include a new truck gate, warehouse, administration and maintenance building, and an expanded container yard storage area. A pair of 16-container-wide electric quay cranes will replace an existing diesel quay crane. “It’s still scheduled to be delivered in 2024,” Mr. Mihic said of the expansion project.
When completed, the terminal will be able to handle container vessels of up to 6,000 TEUs capacity, as well as one or even two breakbulk ships and barges. “It will have a mixed facility for the container or breakbulk lumber,” Mr. Mihic said.
“It just gives us big flexibility,” Mr. Marr said.
When completed, the expanded terminal will have an annual capacity of 300,000 TEUs, Mr. Mihic said. “That is total capacity,” he said. “We will ramp to it, slowly.
As a rule, a container terminal’s capacity is one TEU for every six people who live in its area, he explained. Based on a Vancouver Island population of about one million, that extrapolates to 150,000 to 200,000 TEUs of import and export capacity. But the Vancouver Island market is bigger than that because its local manufacturers have limited existing options to access global markets.
IT’S A BIG ISLAND
Mr. Mihic pointed out Vancouver Island was the largest island in the Americas that does not have a container operation. He also noted that the Island has nearly 20 per cent of B.C.’s population but only 14 per cent of its gross domestic product. He attributed that to the Island’s inability to access world markets because it lacks a proper container facility. Expanding Duke Point will enable Island manufacturers — including pulp and paper makers, lumber manufacturers, and bottled water producers — to reach exports markets more directly. Initially DP World used a short-sea shipping barge service to Vancouver to build container volume at Duke Point. More recently it has introduced direct calls of container ships. “So now we have vessels calling once a month, and once you build more capacity, someone will start to call directly,” Mr. Mihic said. “So they’ll bypass this unnecessary leg to Vancouver. We think that we can grow to a decent volume in the foreseeable future.”
However, as the availability of industrial land diminishes in the Lower Mainland and prices rise, he also envisions logistics services being developed at Nanaimo to divert commodities like lumber from the Vancouver area. “And we can do a reverse supply to the Lower Mainland,” Mr. Mihic said.
COVID IMPACTS CARGO VOLUMES
The COVID-19 pandemic significantly reduced cargo volumes at Duke Point, although they rebounded slightly in 2021. The terminal handled 25,055 TEUs last year, up from 22,329 TEUs in 2020, but down from 29,762 TEUs in 2019, and a high of 44,891 in 2018. Total volume at Nanaimo increased to an estimated 4,322,437 tonnes, up from 3,347,000 tonnes in 2020, but down from 4,646,330 tonnes in 2019.
The pandemic has also had an impact on the new B.C. Vehicle Processing Centre, which received its first shipment of automobiles from Europe in March 2019. The $19 million venture had received $6.3 million from the National Trade Corridor Fund. “It did well in its first year of operation and was going along and then it hit,” Mr. Marr said of the pandemic. “It changed because demand went down. And then with the other stuff going on, the whole supply chain was disrupted. It has been disrupted for quite a while now.”
Shortages of semiconductors and other pandemic-induced supply chain issues have reduced the numbers of automobiles being sold. “It’s clearly impacted the auto industry to quite a quite an extent, to the point where there’s not a lot of inventory out there in the various places,” Mr. Marr said without specifying any numbers. “And it’s been universal in its application.” In any event, he is confident the volumes will rebound once the pandemic runs its course. “It’s not a point you want to dwell on,” Mr. Marr said. “It’s just the fact of the industry.”
FAST FERRY PROPOSED — AGAIN
In other news at the port, Western Canada Marine Response Corporation was poised to open its base in Nanaimo as this was going to press. And a new high-speed passenger ferry was preparing to launch as early as this summer to connect Nanaimo with downtown Vancouver. Announced in September 2021, the ferry is a joint venture of the Port Authority, the local Snuneymuxw First Nation, and Conqora Capital Partners Inc. “COVID has slowed various discussions and various abilities to finalize certain things,” Mr. Marr said. “But I’m still anticipating launching this summer.” if that happens, it will succeed where other ventures have failed before. As the Victoria Times Colonist noted, three previous ferry services collapsed financially while others simply failed to materialize.