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Posted May 19, 2014, 12:54 AM
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A hole being Doug
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Join Date: Dec 2013
Posts: 498
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Business in Vancouver: Sea change is coming in international container trade
Quote:
By Timothy Renshaw
Fri May 16, 2014 2:46pm PST
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Along with the Port of Prince Rupert, PMV is drawing a lot of Asian container traffic north at the expense of its nearest competitor: Seattle-Tacoma.
According to the United States-based Journal of Commerce (JOC), which specializes in global trade and transportation, Seattle-Tacoma’s share of the containerized shipping market along the North American West Coast dropped to 11.7% in 2013 from 12.6% in 2011. During the same period, Vancouver-Prince Rupert’s market share increased to 14.8% from 13.5%. Los Angeles-Long Beach got the lion’s share of container traffic at 63.7% both in 2011 and 2013.
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PMV shippers have become extremely adept at filling containers that would otherwise head back to Asia empty with B.C. commodities like lumber and wood pulp.
In southern California about 20% to 25% of containers are sent back to Asia empty; in Vancouver it’s closer to 10%. Being able to send back full containers lowers the overall costs.
The new rates, however, could alter this.
The viability of shipping commodities via container is cost-based, and the cost of the truckers’ agreement, when implemented, will be “huge … a game-changer,” said Ian May, chairman of Western Canadian Shippers Coalition, which represents companies and associations involved in the transportation of Canadian natural resource-based products like lumber, coal, pulp and paper, wheat and sulphur.
Simply put, said May, the deal, which includes a 12% increase in truckers’ trip rates and raises the per-trip fuel surcharge to $19 from $8, will double the labour costs of using containers to ship lumber, plywood and pulp offshore. B.C.’s forest industry currently accounts for roughly 80% of container exports through PMV.
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For example, in 1970 a container clause was agreed to in the contract between the BCMEA and the ILWU that required containers destined for Vancouver to be packed and/or unpacked on the dock by unionized longshore workers. But containerization has radically changed over the years and it has largely eliminated the need to pack or unpack goods on the docks.
So employers wanted to kill the clause. Shippers and container shipping lines also disliked the requirement that containers heading for other destinations be opened and de-stuffed on the waterfront.
In 1985’s ILWU and BCMEA contract negotiations, the union said if employers wanted to eliminate the container clause they would have to guarantee all B.C. longshoremen 40 hours of work per week.
Employers rejected the proposal.
Government legislation eventually eliminated the contentious clause in 1987 and replaced it with a per-container contribution to the union’s pension fund, which now adds up to around $30 million per year. The BCMEA estimates that since the container clause was eliminated, the Container Gainshare Fund contribution has added $318 million to the ILWU’s pension plan and a further $91 million to the ship and dock foremen’s pension plan.
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After more than four years of planning and construction, GCT Global recently opened Global Terminal, a new semi-automated facility in the Port of New York and New Jersey.
GCT Global’s overhaul and expansion will double the U.S. container terminal’s capacity using a relatively small footprint, Edwards said.
In L.A.-Long Beach, one of Port Metro Vancouver’s main competitors, an estimated US$1.2 billion is being invested in enlarging Long Beach Container Terminal, rechristening it Middle Harbor Terminal and outfitting it with container automation.
According to Edwards, GCT Global will introduce technology to its Vancouver operations as required, but has no immediate plans to bring its New York-New Jersey terminal automation to Vancouver.
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Port Metro Vancouver’s proposed three-berth Terminal 2 expansion at Roberts Bank, which will provide annual capacity for an estimated 2.4 million 20-foot equivalent units to meet what the port estimates will be a doubling of container traffic over the next decade, is envisioned as a semi-automated, state-of-the-art terminal.
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One advantage Port Metro Vancouver (PMV) has is that it is “big-ship-ready,” according to Stephen Edwards, president and CEO of GCT Global Container Terminals Inc., whose subsidiary TSI Terminal Systems Inc. operates PMV’s Vanterm and Deltaport terminals.
Shipping companies have built large ships expecting to go through the Panama Canal, which isn’t ready to accommodate them, said Walter Kemmsies, the New-York-based chief economist at Moffatt & Nichol, a major port engineering and consulting firm that also has an office in Vancouver.
The largest container vessels can now carry anywhere from 18,000 to 20,100 TEUs (20-foot equivalent units) – enough to fill a train 77 kilometres long. Those ships travel where?
They service the busiest global container shipping trade routes, which run between Asia and Europe, and have the largest and most efficient and automated container terminals, like Rotterdam.
But the next-largest vessels can carry 8,000 to 10,000 TEUs, and Vancouver’s harbour has the depth of water needed to accommodate those ships, Edwards said.
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