Choke Points, Challenges, Congestion, Capacity – West Coast Ports

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Our west coast ports in particular point to a supply chain that is stressed. Last month I participated in a live JOC webinar where we discussed signs that increasingly point to a supply chain struggling to keep up. Starting around minute 20, I describe the ‘snapshot of the summer of 2014’ and outline some of the reasons for the problems. The pictures of Prince Rupert and Vancouver were not pretty and the situation hasn’t changed dramatically since.
See: Prince Rupert Performance Statistics

Both west coast ports and terminals are backlogged trying to load containers to rail, many of which are bound for the U.S. Midwest through the two major Asia Pacific Gateway ports, a spike at least partially due to this summer’s US west coast labour negotiations. Congestion is also evident on the intermodal network, where railroads are struggling to recover from a 2013-2014 winter ‘from you know where’ that hit service levels hard. Add in a bumper grain crop and lots of oil moving by rail and we have a recipe for challenges. But, we have to ask the question – “Is this a ‘perfect storm’ type of scenario not likely to be replicated over the next five years or is this an indicator of the need to build greater capacity because this could happen more and more frequently over the next few years?”
Global trade is a mainstay of Canada’s economic growth strategy. Canada has negotiated nine new free trade agreements since 2006 and has many more in the works, from the CETA (Comprehensive Economic and Trade Agreement) with the European Union to the Trans-Pacific Partnership (TPP). To support this international trade, Canada needs to invest in our physical and our communications infrastructure and in ensuring that we have the right regulatory regime in place to support trade.

Last March, in the middle of the truckers’ action at the Port Metro Vancouver CIFFA wrote a letter to the Honourable Lisa Raitt, Transport Minister. We opened by saying, “Canada’s successful conclusion of a free trade agreement with South Korea this week will most certainly fail to drive economic growth, employment or opportunity for Canadians if Canada’s premier Asian gateway at Port Metro Vancouver is not open for business. And, more importantly, Canada’s entire investment in international trade will be for naught if Canadian exporters and importers do not have a global transportation system that is reliable, trustworthy and competitively priced.”
Everything isn’t doom and gloom. The Port of Halifax on Canada’s east coast has invested heavily over the past few years in pier extensions, new gates and cranes and has 6 km of rail on and are preparing for the big boost in trade expected from the CETA. Likewise Port Saint John New Brunswick has rapidly growing container numbers and flexible rail service. The Port of Montreal is also investing heavily to connect that European market serving the US mid-west, Ontario and Quebec. All of our east coast ports seem ready and able to accept all water cargo from Asia now and position themselves for a spike from Europe in the future.

The Association of Canadian Port Authorities President Wendy Zatylny wrote in the Globe and Mail “We will only be able to capitalize on this expanded market and increase our competitiveness through strengthened port facilities and improved supply chain efficiencies. With the expansion of trade comes the necessity for the expansion of port infrastructure.”

It is more, however, than simply investing in port infrastructure and physical capacity. It is investment in the development of an integrated, national, intermodal transportation strategy. It is working across industry sectors to create an information pipeline that delivers data to every stakeholder – terminals, railroads, the CBSA, carriers, forwarders when needed. It is developing a regulatory environment that supports international trade and the movement of goods. It is building capacity and competency.