By Keith Norbury

Yes, shippers, project cargo can move by road and rail through the mountains of B.C. to resource developments in the east of the province and neighbouring Alberta. That’s one of the key messages of an ad hoc project cargo working group consisting of representatives from Port Metro Vancouver, the port’s two breakbulk terminals, and the B.C. Trucking Association. It’s a message members of the group plan to deliver loudly and clearly at the PMV booth at the Breakbulk Americas 2013 conference in New Orleans, Sept. 23-26.

“I guess what’s happened is that in the absence of the port and its terminals marketing themselves, we’ve allowed the opportunity for other gateways to describe the Vancouver gateway for us,” said Doug Mills, Senior Account Representative for bulk and breakbulk cargo for Port Metro Vancouver. “And in doing so, they perhaps have put a spin on it that supports their own gateways as opposed to ours.” He and the port’s terminal operators have discovered that their competitors at other ports haven’t exactly been touting the virtues of shipping large loads through B.C.

Misinformation stifles project potential

Brady Erno, Manager of Sales and customer service for Fraser Surrey Docks, one of the port’s breakbulk terminals, said he has been receiving pushback from potential customers who labour under the impression that they cannot ship large loads through B.C. “But really the trouble is they’ve made a decision without being able to get a firm answer,” Mr. Erno said. As a result, project cargoes destined for the Alberta oil patch have been landing in U.S. ports like Houston, Texas, or Longview, Washington. That’s despite those U.S. ports being a much longer haul by road to Alberta than is Vancouver.

Shippers have avoided B.C. routes to Alberta for various reasons, some with justification, others because of misinformation. So the Project Cargo Working Group is attacking the problem on all of those fronts. It wants to publicize that B.C. highways can handle wide loads, and what the processes are for doing that. The group is also working with the B.C. Ministry of Transportation and Infrastructure to streamline those approval processes.

“We’re trying to be the glue in the middle to pull it all together,” said Dave Lucas, Vice-President of Operations for Western Stevedoring, which operates the Lynnterm breakbulk facility in North Vancouver. “At Western, we’re very well connected with the shipping companies, the heavy haul truckers, the terminals of course, and the freight forwarders,” Mr. Lucas added.

Competitors unite for Canada’s benefit

Fraser Surrey and Western compete head-to-head for project cargo business in Vancouver. So working together on a common challenge is something out of the ordinary, admitted Mr. Lucas, who became Western’s VP of Operations in September. But for the moment the companies have decided to ignore that they are competitors, to promote the southern gateway of Vancouver. “We’re looking to get some of that Canada-bound cargo through Canadians ports,” Mr. Lucas said.

For its part, Port Metro Vancouver is working on setting up a project cargo portal on its website. Its purpose is to provide potential shippers with information about all the resources within the Port’s jurisdiction for handling project cargoes, Mr. Mills said, because “it was clear to us that there was not just one place you could go for that kind of information, and we were hearing about frustrations from shippers in their attempts to find that information.” The Port and the two terminals commissioned a study by Calgary-based logistics firm Prolog Canada to examine those issues and explore the potential for project cargo business through the port. “And after we reviewed that, we realized that there was a significant opportunity that we needed to look at,” Mr. Mills said. The next phase was to look at the various parts of the supply chain and identify the pinch points that have inhibited those cargo movements.

Pinpointing the pinch points

“Once we started the dialogue, it became evident that a number of the pinch points were not insurmountable and, in fact, may have some relatively simple fixes,” Mr. Mills said.

The worst pinch point, he said, has been uncertainty. A logistics firm in a competitive bidding situation needs answers quickly, he pointed out. Unfortunately, B.C.’s permitting process wasn’t, and still isn’t, built for speed. “You have a number of disparate agencies and firms that need to put in their little bit into the equation,” Mr. Mills said.

Another pinch point is that approvals for over-dimensional cargoes often have required engineering costs reaching into several tens of thousands or even hundreds of thousands of dollars – even on routes that had previously accommodated loads of similar dimensions and weight.

Mr. Mills and others declined to specify what options have been discussed with the Transportation Ministry to address those concerns. However, he did say that the loads greater than five metres might be possible in B.C. “if we look at non-traditional routes for over-dimensional and overweight cargoes – other than existing highway systems that have tunnels and snow bridges, for example.” Mr. Mills acknowledged that until about six years ago, the Port was more focused on breakbulk cargoes like forest products, and had let U.S. ports capture project cargo business without much of a fight. As a result, he said, project carriers started to make home bases at those ports and a natural supply chain developed to feed those corridors. “And so we’re kind of a little bit behind that ball,” Mr. Mills said.

Pre-approvals would improve prospects

Mr. Lucas said one objective of the port’s project cargo group is have the province designate more pre-approved corridors for over dimensional loads. Such a designation could reduce the time to obtain a permit to two days from the 12 to 16 weeks under the present system. He noted that B.C. has recently pre-approved several routes already for loads up to five metres wide. A map on the website of the B.C.’s Ministry of Transportation and Infrastructure shows the locations of those routes:

“That will take the vast majority of the project cargo that we’re looking at,” Mr. Lucas said. “So it’s more a question of getting the word out that you can get a five-metre load through the southern corridor.”

Louise Yako, President and CEO of the B.C. Trucking Association, confirmed that the organization has been working with the Port and other groups “primarily to make sure that the provincial government is aware of the breakbulk opportunities for B.C. and to be aware that there are regulations and policies in place that might inhibit the movement of those kinds of goods.” The trucking association is also providing the Port, terminals and other parties in the supply chain “with information about current heavy haul configurations, the types of loads that are being transported already and those types of opportunities,” said Ms. Yako, whose organization represents 1,200 trucking fleets, the majority based in B.C.

Ms. Yako and Mr. Lucas both said that discussions are proceeding with the B.C. government. “The ministry is very keen to help in streamlining the process and promoting what we’re capable of, and they also see the opportunities that are out there,” Mr. Lucas said.

Wider perspectives needed

That might take a change of attitude. “What British Columbia calls oversize big loads and what the rest of the world calls oversized big loads are two different things,” noted Ed Scherbinski, Vice-President of Mullen Trucking LP in Calgary. B.C. sets the bar at five metres wide. It’s not a limit per se, because B.C. will allow wider loads, but only after a complicated and costly permitting process. In Alberta, the equivalent measure is 7.31 metres, Mr. Scherbinski said. “It’s easier to go around British Columbia,” he said.

Ms. Yako said she is well aware of those concerns, given that her association’s members operate in B.C. and Alberta as well as Washington state. “Over the last few years in particular, there’s been an emphasis to try and align the rules so that the provincial boundaries don’t act as a trade barrier,” Ms. Yako said. Mr. Mills said informal talks have also begun with Alberta officials “to maximize the opportunity for the gateway to move those cargoes.”

The B.C. Ministry of Transportation and Infrastructure didn’t make anyone available to comment on the matter. However, the Ministry did issue a statement confirming that it “is working with major Ports on an initiative that will simplify and improve transportation planning for international shippers that work with project cargo.” The initiative also “includes identifying maximum weights and dimensions that can be accommodated on the provincial highway system, and making this information available to shippers and freight forwarders.” The statement also noted that oversize cargoes “can be handled within the framework of existing regulations and approval processes” and pointed out that shippers can apply for permits through the website of the Ministry’s Commercial Vehicle Safety and Enforcement branch,

Distance is to Vancouver’s advantage

Such initiatives should help Vancouver leverage the one huge advantage it has over U.S. Ports in moving project cargo to Alberta. According to Google maps, Houston to Fort McMurray is 3,906 kilometres. That’s more than double the 1,588-km distance between Vancouver and Fort McMurray. And from Longview to Fort McMurray is 2,475 kilometres along the Highway 12 route. Houston also has the added disadvantage, and costs, of cargo arriving from Asia having to pass through the Panama Canal. “There are tremendous advantages on the time side,” Mr. Erno said. “And, as you know, time equals money.”

Houston, on the other hand, does have its upsides. It has a mix of unionized and non-union terminals, which reduces labour costs, Mr. Erno admitted. He didn’t have exact figures, but estimated that Vancouver’s port costs are about 30 per cent higher than Houston’s.

But other factors play in B.C.’s favour. They include, for smaller project cargo loads, the ability to transport pieces to Alberta on a single railway. Also playing in B.C.’s favour is that U.S. Highway 12, the present favoured route for project cargo, has become the target of protesters. Initially, these protests were from locals complaining about loads tying up traffic and damaging the roads. But a recent protest this August targeted the cargo’s destination, the oil sands. In response to that, the oil industry in Alberta is moving toward building smaller modules that can be transported on routes with smaller clearances. That is expected to open more opportunities for trucking those pieces through B.C. And, as the province’s project corridors develop, the advantages of Vancouver will become even more apparent, Mr. Erno said. He anticipates, for example, that as more heavy cargoes move from Vancouver, the railways will begin making more heavy-lift-capable cars available. At present, it can take two to three months to arrange for such cars to arrive at the port, Mr. Erno said.

Alberta boom drives cargo demand

That Alberta has become a prime destination for project cargo seems beyond dispute. “Most of the development we’re seeing is in Alberta because of the oil sands projects,” noted Perry Lo, Managing Director of Toronto-based Caanan Transport Group Inc. That’s why his company, which his father founded in Vancouver in 1981, opened an office in Calgary last year.

The port and terminals would like to capitalize on that boom. But to do that, they need to explain to their customers how that can be done through B.C.’s mountainous terrain. That in itself is complicated. “And it’s something that’s a bit embarrassing not to have a firm answer on because there are multiple parties involved,” Mr. Erno said.

One of the biggest obstacles is simply the perception that B.C. highways don’t allow wide loads. A potential customer might have seen a document that specified a limit on a certain road, Mr. Erno said. However, that document wouldn’t have revealed that B.C. has a permitting process that allows for heavier and wider loads.

The Project Cargo Working Group, however, is also lobbying the Ministry of Transportation for engineered pre-approval of certain routes so that each time a party wants to move another wide load, it doesn’t have to go through the process, and expense, all over again. “The intent here is not to create a burden for the network, but to allow for what can move to move,” Mr. Mills said, adding, “There’s a lot of lost value if it doesn’t move through here.”