For decades, dating back to the 1950s, Port of Nanaimo has built its reputation and business on serving Vancouver Island’s forest industry. Situated on the Island’s east coast, about 110 kilometres north of Victoria, Nanaimo is within easy trucking distance of the vast coniferous forests of the Island’s central and northern regions. Lumber, and to a lesser extent logs, was such an important commodity to the port that it is fair to say that Nanaimo depended on the timber market.
That vulnerability was exposed when the U.S. housing market tanked in 2009 in the wake of the world financial crisis the previous fall. In 2008, the port exported 142 million board feet of lumber. The following year that collapsed to just 10 million board feet. “Our prime commodity around here has always been dimensional lumber and we have traditionally been a breakbulk facility,” said Bernie Dumas, the Port Authority’s current President and Chief Executive Officer, who joined the Port in January 2009, just as everything was unravelling. “So when I came on the scene and started working with the guys, it was quite noticeable that the port had a serious problem. And the problem was the lack of a variety of products that we could handle here.” It was obvious that to survive, the port could no longer rely on lumber. It needed to diversify.
Overall Port volumes plummeted in 2008 to 1.45 million tonnes. The following year volumes stabilized at 1.5 million tonnes, even though export volumes sank further to 260,000 tonnes. Since that time, however, the Port never looked back. Export volumes skyrocketed to 2.34 million tonnes in 2014, while import volumes grew steadily, resulting in record-breaking performance in 2014, with total volumes handled of 4.1 million tonnes. Of the total, logs led the way (2.0 million tonnes), with forest products not far behind (1.3 million tonnes). At 302,000 tonnes, container tonnage grew from zero in 2011 to more than 7 per cent of overall volumes in 2014.
The Port Authority’s Bernie Dumas commented: “ While we know the economy began its recovery in 2010 and we approached business with a new partner – DP World – there is no single reason for our success. Our strategies, combined with the efforts of our partners such as Island Timberlands, TimberWest, Western Forest Products, Harmac, Coastland, Schnitzer, Imerys, Teal Jones, ABC Recycling, Project Cargo opportunities, Westwood Shipping and others, began to turn the tide. Yes, we re-tooled with infrastructure upgrades in our deep sea terminals and focused on more diverse and relevant services, better suited to our customer’s needs, but overall and this sounds cliché, it is the sum of the parts that has made the difference. Our relationship with our partners has improved and we have better information to report since 2010….which is part of the statistical improvement and must be acknowledged. Our collaboration with partners is definitely a part for our success but everyone’s efforts in the market place has played a significant role. We are all paying close attention to what matters to our clients and looking for solutions to support their success.”
Move to container shipping to help port diversify
Mr. Dumas has a background in containerized shipping, having been general manager of China Shipping (Canada) Agency Co. Ltd., and also having worked for firms like Montreal Shipping Company across Canada from Halifax to Vancouver during a 30-year career. So it seemed logical to Mr. Dumas that Nanaimo should look at containers as a way to diversify the port’s business. In 2013 that idea took a giant stride forward when the federal government announced it was contributing $4.5 million toward a project to turn Nanaimo’s downtown Assembly Wharf into a short-sea container handling facility. The Port Authority will match that figure. “This project will not only enhance the Port’s ability to handle increased volume, in a more efficient manner, creating jobs and growth in our communities, it will also reduce road congestion and travel time for users.”
Nanaimo has already been handling containers since January 2012, at its Duke Point Terminal. By converting the Nanaimo Assembly Wharf, which currently handles mostly logs and little else, into project cargo and other uses, Duke Point will be freed up to expand into other potential cargo areas as well, including more handling of bulk commodities.
Earlier attempts at containerization faltered
Nanaimo’s move toward containerization goes back much further, to the 1980s, Mr. Dumas said. That’s when the Port Authority purchased, for $1, a 40-tonne Canadian-made Canron container crane that had been the original crane at Port of Vancouver’s Centerm operation. Nanaimo relocated that crane to Duke Point, with the thought that it might capitalize on a lack of container capacity at Vancouver ports. “But it never materialized because the container terminals got bigger in Vancouver and the situation changed,” Mr. Dumas said. So, for years, the Canron crane did very little work. “The port used it for different things, moving cargo on different ships and what not but it was done sparingly,” Mr. Dumas said.
In the wake of the collapse of the lumber business, Mr. Dumas said, he approached officials at Western Stevedoring, which had been looking after Nanaimo’s two cargo terminals for three decades, about diversifying into containers. But Western wasn’t into containers in a big way, Mr. Dumas said, so at the end of 2011 the Port made a switch and hired DP World to take over the management of its Duke Point, Assembly Wharf and cruise facilities. Based in Dubai, DP World is heavily into containers, which accounts for 80 per cent of its revenue. DP World has 65 terminals on six continents, according to its website. In B.C., DP World has 16 locations, including the Centerm container terminal in Vancouver.
Container barge service began in 2012
In July 2012, DP World began to operate a weekly barge service to transport containers from Centerm to Nanaimo’s Duke Point facility. Because the crane had originally been in service at Centerm, DP World dispatched mechanics from there to refurbish the Canron crane, Mr. Dumas said. “We spent a fair chunk of cash to bring it up to speed,” Mr. Dumas said. “And it’s working quite well.” While the crane can handle about 20 containers an hour, compared with about 25 for the more modern machines at Centerm, Mr. Dumas said it is nearing the end of it useful life. As a multipurpose terminal that also handles project cargo, breakbulk lumber, scrap metal and occasional bulk commodities, Duke Point is getting pretty busy. And the success of the barge service, which is now calling twice a week, has created growing pains. “One of the huge challenges that we’re facing is when we have a lumber ship on berth at Duke Point, the barge has to wait,” Mr. Dumas said. So Mr. Dumas approached then federal Industry Minister Ed Fast about accessing funds from an Asia Pacific Gateway Corridor initiative for short-sea shipping that hadn’t been tapped. The Port made its application and on July 3, 2013, the federal government announced its $4.65 million contribution. The new barge berth is now in development and will allow servicing a ship and barge loading or discharging simultaneously.
Search for newer mobile container crane
About $3 million of the roughly $9 million total cost of the project was earmarked to purchase a mobile container crane, similar to a Liebherr EMH 320 crane that was installed in 2012 at Port of Thunder Bay. “We were looking for a used model that didn’t have that many hours on it,” Mr. Dumas said. “There are a number of them around the world.” The Port would have preferred to buy it from the manufacturer in order to have it under warranty. “The idea is we are trying to be a multitask terminal. So we are looking at project cargo as well,” “We were hoping to be able to find a crane that can do both.”
Finally, a suitable used Liebherr 500 crane was located in Brazil in early 2015, purchased and shipped to Nanaimo, where it arrived on July 25. Bernie Dumas sees the arrival of the Liehberr 500 heavy lift mobile harbor crane as significant for Vancouver Island’s long term economic vitality particularly for the mid-island area. “The Port’s focus is to improve port infrastructure to meet future needs of customers on Vancouver Island,” he said. “As part of the Port’s ongoing upgrade program and with the help of the federal government, the Port is undertaking a short-sea shipping project that will provide an independent barge berth to deal with congestion issues with more capacity and versatility for superior loading and discharge options.
The purchase of the Liebherr 500 mobile crane is a major step in this $9.3 million dollar initiative for the Duke Point Deep Sea Facility.” “This heavy lift mobile harbor crane opens a world of opportunity for Nanaimo Port Authority with superior versatility to service various cargo types from larger ships with growing tonnage. The Liehberr 500 increases our lift capacity significantly to 104 tonnes from our gantry crane with a maximum lift of 40 tonnes purchased in 1975. With a longer and higher reach, and a multi-directional range we can now service up to post panamax vessels with added efficiencies and broader capabilities for most cargo types and loads.”
Other business opportunities on the horizon
The Port is also looking at expanding its business in other areas. In 2011, it completed a cruise ship terminal and welcome centre at a cost of $24 million adjacent to the Assembly Wharf. We have six cruise ship calls on the books for 2016 including the Explorer of the Seas, the largest ship on the Alaskan route carrying over 3,000 passengers with 1,500 crew. The Port is trying to build those numbers up to 20 to 25 ships a year. “We’re really not trying to compete head on with Vancouver or Victoria, but we’re trying to create our own little destination,” Mr. Dumas said. “Central Vancouver Island is positioned very well in the travellers’ market with high endorsements over many years from Travel & Leisure Magazine and Condé Nast Traveler. We are currently in the process of building our shore excursion opportunities, working with local partners, Tourism Nanaimo, our Downtown Business Association and other professional tour operators, to engage local communities for further support. At the end of the day the central island business community benefits from these visits with opportunities for passengers to return for longer overnight stays. It’s a collaborative approach; we have a solid 14 year history of hosting 80 large cruise ships and 135 pocket ships, a first class cruise docking facility and terminal plus very high marks with the cruise industry for hospitality.”