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Canada's West Coast Ports Continue Cargo-Handling Growth as U.S. Ports Decline

Tuesday, March 4, 2014

By Jeremy Hainsworth  

March 3 — Canada's west coast ports posted growth increases in 2013—while U.S. ports showed declines—as Canada pushes port expansions with an eye to capturing an increasing portion of trans-Pacific trade with Asia.

Year-end statistics for Port Metro Vancouver showed the marine port handled a record 135 million metric tons of cargo, up from 123.8 million in 2012, which is an increase of 9 percent compared to 2012. Import and export tonnage maintained balanced growth, each showing a 9 percent increase.

Bulk cargo volumes rose 11 percent, buoyed by increases in coal and grain, the report said.

“Increased demand for Canadian products, an ongoing transition to a consumer-based economy in China, and recovery in Asia have fueled the continued growth of Canadian trade through the port,” said the statistical report release Feb. 24.

Port of Prince Rupert

Cargo handling varied by type at the Port of Prince Rupert on the north coast of the province of British Columbia.

In 2012, Prince Rupert handled 564,856 TEUs while in 2013 it handled 536,439.

While Prince Rupert's total TEU traffic was down, the loaded TEU handling was up 2.4 percent from 442,606 in 2012 to 453,428 in 2013. Total tonnage of TEUs was down 5.03 percent.

Bulk cargo moving through Prince Rupert was primarily on the rise, particularly for metallurgical coal which rose 13.28 percent, while thermal coal dropped 13 percent. Petroleum coke rose 2.97 percent.

Port Metro Vancouver

Total coal shipments through Vancouver jumped 17 percent in 2013 compared to 2012; metallurgical shipments rose 14 percent and thermal increased 22 percent.

Vancouver ports showed movement of 2.8 million TEUs, an increase of 4 percent over 2012, which had shown an increase of 8.2 percent compared to 2011.

It is the bulk cargo that is driving the growth in Vancouver, Garland Chow, associate professor and director of the Bureau of Intelligent Transportation Systems & Freight Security at Vancouver's University of British Columbia, told Bloomberg BNA. “The export of bulk is four times that [of] containers. China wants resources.”

Moreover, Chow said, U.S. ports have bulk capacity as a smaller part of their operations than does Vancouver.

He said the biggest bulk commodity growth moving through Vancouver is coal being shipped from the Westshore terminals. Much of that coal is from the U.S., he said.

“They don't have the capacity to export it from the U.S.,” he said. “It's all coming up here.”

“This could change, if the proposals to build a coal terminal in Washington state get passed, though there is as much resistance to that happening as there is to letting U.S. coal come through Canada,” Chow said.

Canadian Minister of Transport Lisa Raitt said in a Feb. 24 news release that the growth indicates the success of trade development-focused policies and infrastructure investments.

“As we have acted to increase trade ties with Europe through the Comprehensive Economic and Trade Agreement (CETA), and look now to expand opportunities with Asia through the Trans-Pacific Partnership (TPP), our forward thinking investments in infrastructure, coupled with Port Metro Vancouver's reputation as a reliable and competitive gateway, are contributing to the prosperity of Canadians across the country,” Raitt said.

Port Metro Vancouver is Canada's largest gateway, handling 19 percent of Canada's total trade, the report said.

Pacific Gateway Strategy

Data provided to Bloomberg BNA by the British Columbia government showed that between 2005 and 2011, the public and private sectors committed C$22 billion ($19.9 billion) to projects supporting infrastructure development for the Pacific Gateway. The province committed C$5.4 billion ($4.9 billion), the federal government announced C$1.7 billion ($1.5 billion) in funding, local governments are contributing C$900 million ($813 million) and the private sector has also committed to investing C$14.1 billion ($12.7 billion), the government said.

The Pacific Gateway Transportation Strategy (2012-2020) has identified more than C$25 billion ($22.6 billion) in investment—public and private—required to increase capacity and improve performance to support larger volumes of exports and imports in the next six years, the government said.

The work is being funded by the Canadian federal and British Columbia provincial governments, as well as by business partners.

Business Council of British Columbia president Greg D'Avignon told Bloomberg BNA that the western Canadian situation is a reflection of British Columbia working with other governments and the private sector to build infrastructure, provide training and ensure labor stability.

“I think it's a story of good planning on infrastructure, good salesmanship,” he said. “It's an example of public policy gone right.”

D'Avignon said Canadian Pacific and Canadian National railroads have invested in their networks to drive business. He also said that changes in policy have spurred companies such as Neptune Terminals and Teck to invest in local operations.

British Columbia's ports compete primarily against the U.S. Pacific ports in Seattle, Portland, Ore., and Los Angeles.

In a Feb. 20 speech, Port Metro Vancouver President Robin Silvester said the proposed C$2.3 billion ($2.08 billion) Roberts Bank terminal expansion, south of Vancouver near the Washington state line, would provide capacity for 2.4 million containers each year.

Seattle, Portland Ports

The port of Seattle moved 13,759 million metric tons of containerized cargo in 2013, compared to 16,122 in 2012, a drop of 17 percent, according to port website statistics. The port moved 1.6 million TEUs in 2013 compared to 1.9 million in 2012.

In 2013, the Port of Portland, in Oregon, recorded 178,451 TEUs with a cargo tonnage of 11.94 million short tons compared to 183,203 TEUs and 12.35 tons in 2012.

Chow said Portland is the only U.S. West Coast port specializing in bulk cargo but said the port has a low draft so ships cannot load up too heavily.

Port of Los Angeles

The Port of Los Angeles moved 165.1 million metric tons of cargo in 2013 compared to 174.9 million in 2012, according to port statistics. It moved 7.9 million TEUs in 2013, down from 8.1 million the previous year.

The port said in a Feb. 14 news release that overall January 2014 volumes increased 2.5 percent compared to January 2013, due in part to shippers moving cargo in advance of the Chinese New Year, which fell on Jan. 31. In a Jan. 15 news release, the port said December volumes increased 11.36 percent compared to the previous December.

Recognizing that trans-Pacific shipping is shifting, on Nov. 7 the port announced an incentive program in which an ocean carrier would earn $5 per 20-foot equivalent unit (TEU) for each incremental container it ships through the port in 2014. The rate jumps to $15 per TEU for all TEUs, if a carrier's container volume grows by 100,000 or more units for the same 12-month period.

“Carriers are rethinking their routes and relationships to be as competitive as possible,” port executive director Geraldine Knatz said at the time. “This incentive gives them another reason to strengthen their ties with the Port of Los Angeles.”

The release also said that under a five-year $1.2 billion capital improvement program, the port is modernizing terminals, increasing rail capacity and improving roads to maintain its facilities and meet industry needs.

To contact the reporter on this story: Jeremy Hainsworth in Vancouver at correspondents@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

Port of Prince Rupert statistics are available at http://bit.ly/1dIF2de. Port Metro Vancouver Statistics Overview 2013 are available at http://bit.ly/1eq9vwi. Port of Portland maritime statistics are at http://bit.ly/1hqpYoC. Port of Seattle statistics are at http://bit.ly/Nyc7Ci. Port of Los Angeles TEU statistics can be seen at http://bit.ly/1hio7TF. Port of Los Angeles tonnage statistics are at http://bit.ly/1exBSZv.

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