By Keith Norbury

Buoyed by the early success of a short-sea container shipping operation at its Duke Point terminal, Nanaimo Port Authority on Vancouver Island is looking for cash to help bankroll a $50 – $70 million expansion of the terminal. “We’re expecting to hear something from the Liberal Party,” Port Authority CEO Bernie Dumas said in a recent interview, his comment in reference to a promise the federal Liberals made during last October’s election campaign to boost infrastructure spending. The port is also prepared to put up its own money but would need to borrow $20 million, twice the amount it is currently permitted to borrow, he said.

“It’s a big chunk of money for us because we’re a small port,” Mr. Dumas said.

The project would add a second berth, 600 feet long, and other improvements that would enable the 13.5-metre-deep terminal to handle container ships with capacities of up to 4,500 TEUs. “We have the drawings and engineering work on it,” Mr. Dumas said. “It’s just trying to find the money.”

The terminal just received $9.3 million in improvements that included upgrades of the new barge berth and a deepsea berth, as well as a $4 million shore crane that arrived last year from Brazil and is expected to be in operation by March. The port chipped in $4.65 million for the project with the other half coming from the federal government through a short-sea shipping fund of the $1.4 billion Asia-Pacific Gateway and Corridor Initiative.

“So we can handle a barge and a ship now,” Mr. Dumas said. “We couldn’t do that, say, six months ago.”

Operator praised for “entrepreneurial approach”

That was phase 1, Mr. Dumas said. The second phase, he admitted, “is a bit of a shot in the dark because of the amount of money required.” However, he is optimistic that the port can pull off a public-private partnership that also would include terminal operator DP World Canada. DP World, which specializes in container handling, took over management of the Duke Point operation in 2011 from Western Stevedoring. The following July, DP World began weekly barge service to move containers between Duke Point and DP Word’s Centerm operation in Vancouver.

Transportation analyst Darryl Anderson said the Port Authority’s decision was brilliant for “recognizing they had an asset but that their (previous) stevedore wasn’t in the market that they needed to be in.” Mr. Anderson also praised DP World for taking an entrepreneurial approach to running the Duke Point terminal by aligning the service with needs of shippers on Vancouver Island, primarily in the forestry sector. “At every single level, DP World didn’t behave like a terminal operator,” said Mr. Anderson, who is Managing Director of Wave Point Consulting in Victoria, B.C. “They basically said to themselves if we can attract the cargo before it leaves Vancouver Island, we can actually get it to stick and go through our terminal rather than lose it to (competitor) Deltaport once it gets in a transload on the other side.”

Duke Point’s new crane — a used 2008 Liebherr LHM 500S 104-tonne capacity shore crane that arrived last summer from Brazil — is expected to be able to service post-Panamax ships of any cargo type, and will reduce congestion and delays, Mr. Dumas said in a Jan. 26 news release from the port. “And this is perfect timing given the significant growth in our cargo volumes for 2015,” he added. The crane will replace an aging 40-tonne Canadian-made Canron container crane, which the port had acquired for $1 in the 1980s. The Canron crane will be retired eventually, but will remain in service for about six months until the dock’s workers become comfortable with the new machine, Mr. Dumas said.

International Longshore Workers Union crane operators are receiving training at the B.C. Maritime Association’s new training facility on Mitchell Island in the Fraser River near the heart of Greater Vancouver. The technologies on the Liebherr, such as joysticks, are similar to the controls on the gantry cranes at Port Metro Vancouver, Mr. Dumas said. “So the learning curve is more than just the reach and being comfortable in it. We’re not just doing retraining,” he said. He expected the Liebherr to begin service by the end of February or early March.

Rob Ashton, Union Vice-President said the union’s Vancouver Island local 508 as well as local 514, which represents foremen across B.C., will be working with the Liebherr crane. The new crane opens up a “brand new world of cargo,” Mr. Ashton said. “It’s really exciting and we’re proud to be a part of it.”

Aside from handling containers, the new crane will load and unload breakbulk cargo at the dock. That includes pipe and modules for liquified natural gas projects proposed for the Island – should those projects go ahead. “It’s newer, it’s mobile and has lots of flexibility to it, and it’s multipurpose,” Mr. Dumas said. “It’s going to be a good asset for the port for many years and it gives us opportunities we didn’t have before.” Mr. Dumas also expects the mere presence of the crane to attract more project cargo to the port.

Container volumes at the port were up 39 per cent in 2015 compared to the previous year, the port reported in its Jan. 28 news release. Cargo handled at the port totalled 4.85 million tonnes in 2014 with exports increasing 23 per cent over 2014 and imports rising 12 per cent. In 2015, 241 ships visited the harbour, one fewer than in 2014.

In 2014, Nanaimo was ranked 48th among North America container ports in TEU volumes, according to figures from the American Association of Port Authorities. Nanaimo handled 24,405 TEUs in 2014, 18.8 per cent more than the 20,535 TEUs in 2013. Among Canadian container ports, Nanaimo was sixth, exceeded by Vancouver, Montreal, Prince Rupert, Halifax, and Saint John.

Mr. Anderson is impressed that in four short years Nanaimo was able to crack the top 50 of North American container ports. “What they’ve done is taken what appeared to be an under-utilized asset and turned it into a real growth and success story particularly for forest exporters from Vancouver Island,” Mr. Anderson said.

At present the terminal occupies about 20 of the 75 acres the Port Authority owns at Duke Point. The rest, which is leased out, contains brownfield areas where the terminal could expand, Mr. Dumas said. He hopes would the work to begin by no later than 2020. “We are the only cargo facility on Vancouver Island,” Mr. Dumas said. “The Island is growing and we see an opportunity to help the community grow” Mr. Dumas said.

Mr. Ashton said the longshore workers union is also hoping the port can pull off the expansion. “A terminal that has two berths has so many more opportunities than a terminal with only one,” Mr. Ashton said.

In the coming year, the port is going to shift attention toward more inbound cargo, such as containers destined for the Island’s box stores. At present, containers from Asia are being de-stuffed at distribution centres on B.C.’s lower mainland and even in Calgary, Alta., before being loaded into 53-foot truck trailers. Those trailers are then dropped onto ferries to be taken to the Island.

Distribution centre envisioned eventually

Eventually, Mr. Dumas hopes a small distribution centre could be established in Nanaimo so that the containers carrying those consumables could be brought directly to the Island. “It’s like the chicken or the egg thing,” Mr. Dumas said. “We’re trying to show that there is a potential and we’re looking for companies that are willing to invest in a small warehouse. We haven’t found anybody yet but there is more volume that is being handled, so we’re getting there.”

Mr. Dumas said the port has also initiated talks with the Canadian Border Services Agency about handling intact containers from Asia. “The problem is that CBSA thinks all ports should be the same,” Mr. Dumas said. “So they’re looking at us to get scanners and radar. That’s a bit of a challenge for us.” Mr. Anderson said a distribution centre would be another good for move for Nanaimo, although he said companies in the retail realm would need a little more economic certainty before they commit to making an investment. “There isn’t really a shortage of industrial land in and around Nanaimo,” Mr. Anderson said. “So it’s a question of, is the economic climate and the timing right?”

The Port Authority is already working with DP World to bring in more import boxes “because the export side does have a limit,” Mr. Dumas said. “There’s only so much business here.” Duke Point has handled some import business, most of it having cleared customs at DP World’s Centerm facility in Vancouver, Mr. Dumas said. “And we’ve done some domestic intermodal boxes from some of the trucking community. So we’re looking maybe to tap Walmart and Costco and Canadian Tire, and London Drugs, these type of guys, for the island.”

In addition to DP World’s barge service, Westwood Shipping Line has begun a regular monthly liner service to Nanaimo. It employs combination break-bulk/ container vessels that also call frequently at Vancouver’s Lynnterm and at Squamish on Howe Sound, Mr. Dumas said. At Nanaimo, the ships load breakbulk, such as lumber, into the hold, and then containers on the deck. “And they’re going directly to Korea and Japan,” Mr. Dumas said. Each month those containers include shipments of bottled water from a plant at Fanny Bay, about 75 kilometres north of Nanaimo. “And there’s all kinds of other oddball little products. But mostly it’s dimensional lumber, wood pulp, and bottled water,” Mr. Dumas said.