Port of Vancouver BC has Record Year for Containers, Capacity Projects

A coordinated, focused Canadian federal strategy has helped British Columbia ports improve market share, employment, and economic vitality. Image – BC Pacific Gateway Port, courtesy of Port Metro Vancouver.

The Port of Vancouver (BC) set new records in container and bulk shipments, and in capacity building infrastructure projects, in 2012.

Excerpts from Port Metro Vancouver’s news release (our emphasis):

“The 2012 year-end statistics report shows that Port Metro Vancouver handled 124 million tonnes of cargo through the end of December, an increase of one per cent over 2011.

“Port Metro Vancouver’s strong 2012 year-end growth is clear proof that the federal government’s continued strategic investments, such as the recent Deltaport Overpass Project, further enhances Canada’s Asia-Pacific Gateway as the gateway of choice between Asia and North America,” said the Honourable Ed Fast, Minister of International Trade, and Minister for the Asia-Pacific Gateway. “As we deepen Canada’s trade and investment ties in fast-growing, emerging Asia-Pacific markets, PMV’s competitive advantages and continued success are helping to create jobs, growth and long-term prosperity in British Columbia and every region across our country.”

“Port Metro Vancouver is a key part of the success of Canada’s Pacific Gateway, the preferred gateway to Asia for North American trade,” said Transportation and Infrastructure Minister Mary Polak. “It is a world class facility that offers shippers speed and efficiency, creates jobs for B.C. families and boosts our economy. Its continuing success is a sure sign that B.C.’s economic plan is on the right track.”

And Port Metro Vancouver is not done growing. A $2 billion project, Roberts Bank Terminal 2, “would add a 284-acre container terminal adjacent to the container and coal terminals south of Vancouver, on an artificial island connected to the mainland with a causeway. The addition would add capacity for 2.4 million TEUs, for a total of 6.5 million for the port.”

The growth is partly the result of Canada’s establishment of a nationally focused freight program, the “National Policy Framework for Strategic Gateways and Trade Corridors,” in 2007. This created a “system and merit based—rather than modal—approach to transportation, infrastructure, policy, investment and marketing.” A 2009 report on the initiative noted that “An integrated approach to an Atlantic gateway could significantly enhance Canada’s ability to capture a larger share of growing trade flows between North America and foreign markets.”

One program created out of the National Framework was a “merit-based fund to enhance infrastructure at strategic locations: major Canada-US land border crossings and key gateways/trade corridors” instead of peanut-buttering investment.

The result, as we noted in March 2012:

Canada’s share of international freight movement is increasing.  More businesses are thriving, more people are employed.

And it’s not just about business.  The focused strategy makes “a significant difference for local residents in mitigating the impact of increasing freight movements.”

And it’s not a “big brother” federal program.  Provinces and local community and business stakeholders play an important role in identifying priorities.

Another reason the British Columbia gateways ports of Vancouver and Prince Rupert are growing could well be the U.S.’s Harbor Maintenance Tax (HMT).   The Federal Maritime Commission (FMC) studied the issue, and estimates that a good amount of U.S. bound trans-Pacific cargo is passing through Canada in part to avoid the HMT, which may be as high as $109 per container. In fact the FMC concluded that half of the U.S.-bound import container cargo arriving first through Canadian ports would instead arrive first through U.S. ports if the HMT were to end. Read the FMC’s news release which summarizes why U.S.-bound goods from Asia first enter Canada; and a news release from U.S. Senator Patty Murray who along with U.S. Senator Cantwell called for the study.

Canadian officials dispute the finding. They believe the HMT is a relatively minor factor in shippers’ decisions as to where to route their cargo, and claim other factors influence shippers to use the British Columbia ports.  This presentation (pdf) from Robin Silvester, President and Chief Executive Officer of Port Metro Vancouver, has good slides and notes that explain the Canadian position.

The Seattle region is home to two ports, Tacoma and Seattle, which are perhaps the most impacted by the growing success of the British Columbia ports.  Tacoma and Seattle port officials, shippers, commodity groups and businesses have been sounding the alarm for years. They’ve advocated for federal and state policy changes and funding that could help the two ports increase their competitiveness, and sustain and grow jobs. A few elected officials have recognized the need and worked the issues hard, including U.S. Senator Maria Cantwell (D), and State Representatives Judy Clibborn (D) and Hans Zeiger (R). Newly elected U.S. Representative Denny Heck (D) is making SR 167 a priority issue. Others have carried the ball as well.

Seattle freight interests, while supporting the SR 167 project, are focused on the SR 509 project (learn more). This project would extend SR 509 from SeaTac Airport (itself a major freight movement center), providing an alternative truck route from the Port of Seattle, relieving some  I-5 congestion, and remove many trucks from SR 99 and local streets.

Port of Seattle Commissioner Bill Bryant (learn more about him) commented for this story:

“Tens of thousands of jobs across Washington State depend on the Ports of Seattle and Tacoma, which are in a competitive dogfight with the British Columbia ports. If we’re going to keep those jobs in Washington State we’re going to need to invest in infrastructure. We’re looking at over $100 million in deferred maintenance and refurbishing of important truck routes and bridges. If we don’t address that backlog, and keep our transportation network in adequate shape, jobs from Seattle to Eastern Washington will be at risk. That means the State has got to invest and that the Ports of Seattle and Tacoma must organize themselves so they are competing with British Columbia and not each other.”

While state legislators are grappling with transportation investment proposals that could help the Ports of Tacoma and Seattle and the jobs they support, there are some warning signs.  First, the Seattle community seems to be uniting behind locating a new NBA arena next door to the Port of Seattle. It would complicate if not inhibit future growth and operations at the Port. Second, while momentum is funding the SR 167 project in Tacoma, many state legislators seem reluctant to support a gas tax increase to fund this and other projects. Ironically, many of those legislators’ constituents have jobs directly or indirectly related to the two ports.

Unfortunately, it’s no stretch to believe that this time next year I’ll be writing about another record year for Port Metro Vancouver, no new funding for SR 167, and increased momentum for a NBA arena next to the Port of Seattle.