Six years ago, Port Metro Vancouver launched a unique program to collect supply chain data as an aid to transportation planning in the gateway. Data captured during the early stages of the port’s Supply Chain Strategy identified interface issues that were impacting the functionality and efficiency of goods movements through key gateway corridors. The subsequent Gateway Improvement Program, a $1 billion, multi-stakeholder investment program, has resolved a number of these infrastructure-related issues. On the operational side, “we decided to take that data and use it to enhance the service offerings and capability of the supply chain,” says Peter Xotta, Vice President of Planning and Operations. Six years later, several leading reliability initiatives have improved the reliability and fluidity of the supply chain. “Even though we’ve faced some challenges in 2014, we continue to work hard with our operators and stakeholders, focusing on further improvements in service. And being even more transparent about how we’re performing,” continues Xotta. Five key pillars form the foundation of the port’s reliability initiatives: labour, rail, marine, trucking, and terminals.
Four years of a total of eight remain in the labour agreements between the B.C. Maritime Employers Association and the International Longshore and Warehouse Union’s (ILWU) Locals 500 and 514. “The effect of this labour stability has been significant”, according to Xotta. “Certainty and stability is paramount for shippers; it’s absolutely a key influencer from their perspective.” He adds that this benefits the gateway, in the context of current negotiations between U.S. west coast ports and the ILWU, with local terminals seeing some unanticipated additional volume as a result of customer uncertainty about possible service disruptions to the south. A key benefit to Port Metro Vancouver is the long-term labour stability for customers, businesses, and employees.
The gateway has become more fluid as a result of significant increases in the rail capacity in key transportation corridors. This includes significant increases in rail operations in all trade areas. While rail operators have faced a number of unexpected challenges over the past year – primarily related to extreme winter weather conditions, an unprecedented grain crop and unanticipated shipments related to uncertainty around labour negotiations at U.S. ports – according to Xotta, these adversely affected dwell times for the first part of 2014, but operators are working hard to return to the previous level of 2.5 days. “In spite of all the challenges, the recovery of service was, in our view, as quick as was possible. We’re pleased with the response of the major railways.”
In the marine sector, Port Metro Vancouver’s Container Vessel On-Time Performance Incentive Program continues to be a success and resulted in more than $2.8 million in discounts to recognize on-time performance of container shipping lines in 2013. Last year, the number of vessels that arrived within eight hours of the start of the assigned berth schedule improved by 12 per cent over 2012 levels. Three container lines achieved greater than 90 per cent on-time performance in 2013: Maersk Line, CMA CGM Group and Mitsui O.S.K. Lines (MOL). “The port operates common user terminals, so arriving on time is really important to the efficient operation of the supply chain, and we greatly appreciate those carriers that make it a priority to do so,” says Xotta. “It puts us in the best possible position to deliver good service to them.”
One of the consequences of the strong harvest of Canadian grain last year was prolonged wait times for grain vessels at anchorage, as vessels waited to load agricultural products. This impacted the efficiency of vessels in other sectors when nearby anchorage space was unavailable. Consequently, Port Metro Vancouver is reviewing its protocol for assigning anchorages. While they’re typically assigned on a “first come, first served” basis, Xotta states that changes may be necessary to ensure efficient operators have fair and appropriate access to anchorages. “We’re starting that conversation with industry and we expect to conclude that analysis and potentially implement changes next year.”
Recent infrastructure improvements and supply chain initiatives have resolved a number of supply chain inefficiencies that once impacted the drayage sector. Yet in March 2014, ongoing contentions by truckers of unfair compensation practices and terminal congestion resulted in a labour dispute that severely affected port operations in the container sector. Following negotiations with mediator Vince Ready, a 14-point Joint Action Plan was endorsed by driver representatives, the federal and provincial governments, and Port Metro Vancouver.
Among the various plan stipulations, Port Metro Vancouver is required to revise and fast-track certain elements of its Smart Fleet Trucking Strategy, a three-year action plan launched in 2013. The review of the Truck Licensing System (TLS), a program that provides a framework for managing licensing, safety and environmental performance, has been accelerated. One component of the plan was to expedite the roll out of equipping local trucks with GPS technology. In July, Port Metro Vancouver became the first North American port to have 100 per cent of the drayage fleet accessing port facilities equipped with GPS technology. A staffed call centre has replaced the web portal, making it more convenient for truckers to register changes in their fleet and update drivers’ contact information. Additionally, the audit program has been expanded and a confidential whistleblower phone line set up.
Another Action Plan requirement has Port Metro Vancouver working on a common technology platform that will measure performance using data collected through truck’s GPS systems. The data will then be used to enhance reservation system processes at and between terminals and to improve access to drayage related information. The Common Data Interface (CDI) will ultimately optimize truck movements within the gateway. The first phase focuses on data collection and reporting and is scheduled for completion in January 2015. Full use of the CDI is expected in March 2016.
Another key trucking issue being addressed is compensation and, while the federal government is looking to devise a response to rate auditing, Port Metro Vancouver is concerned with the issue of supply. “There’s a continued concern about the issue of oversupply of trucks and the impact on rate stability,” states Xotta. “And the port, along with the government, are trying to develop a better understanding of this important concern and seeing if there’s a way it can be better managed.” Recommendations will be forwarded this fall to the Steering Committee that is overseeing follow-up of the Joint Action Plan.
One of the ongoing contentions expressed by truckers has been the lack of compensation for delays caused by congestion at container terminals. While a pilot project was originally stipulated in the Action Plan, major container terminal operators have moved directly to incorporating extended hours at three container terminals, five days a week. This has spread business over more operating hours and already resulted in a dramatic reduction of wait times at those terminals. According to Xotta, this has also provided more certainty to other supply chain operators, such as warehouses. “From our perspective, it’s been a huge success and a necessary step forward for the gateway as it evolves.”
An initial report containing recommendations related to performance measures and standards addressed in the Action Plan was submitted by Vince Ready in June. Ready is currently working on another set of recommendations regarding remuneration that will be presented in a report in September or October.
By prioritizing each of these reliability pillars with steadfast focus on the overall stability of the supply chain, Port Metro Vancouver is moving the needle on what it means to be a fluid gateway.