Canada’s West Coast ports

Port Metro Vancouver In 2011 Port Metro Vancouver entered into an eight-year period of labor peace. Other than short-term shutdowns by container truckers, the port has moved a long way towards gaining the reputation of being a dependable, efficient port. This reputation has, directly or indirectly, given the port an opportunity to expand and to meet the demands of Asian shippers. In commenting on the labor agreement on May 10, 2011, Canada’s Minister of Labour said: “The collective agreement between BC Maritime Employers Association and International Longshore and Warehouse Union Canada (ILWU-Canada) is great news for both parties, but the real winners are Canadians. This agreement will help to strengthen our still-fragile economy because it means trade can continue to flow through the Port to destinations across Canada and around the world.”

Now, roughly half way through the agreement, Canada’s largest port has played a significant role in meeting the challenge of strengthening the Canadian economy and, in return, the port, the unions, the railways and shippers – all with a vested interest in the port – are working more closely (the buzz word is “collaborating”) to not only forward major infrastructure projects such as the Asia Pacific Corridor Initiative, but to manage new initiatives. Major projects in the approval process at the port right now are: • Twinning of the Kinder Morgan Tran Mountain Pipeline that will increase the capacity of the oil transport system from 300,000 barrels per day to 890,000 barrels between Edmonton, Alberta (the Oilsands), and Port Metro Vancouver. • A new grain export terminal and major upgrades to two other existing grain export terminals; owned by Viterra and Richardson. The new terminal is being proposed by G3 Global Holdings, a limited partnership between Bunge Canada and Saudi-based SALIC Canada that has entered a joint venture with Western Stevedoring Company Limited to examine the feasibility of building an export grain terminal at Lynnterm, a breakbulk terminal on the North Shore of Burrard Inlet. Bunge Canada and SALIC Canada, the G3 Global Grain Group, was selected as the successful applicant for the purchase of the remnants of the Canadian Wheat Board in April of this year. • A new export potash terminal will handle potash originating at the Legacy mine to be developed near Moose Jaw, Saskatchewan, by German-based K+S Potash in 2016. The terminal, at the existing Pacific Coast Terminals site in the Port Moody area, will be designed to load up to 2.2 million tonnes annually of the crop nutrient. • A C$400 million expansion of the Fortis BC LNG plant, at Tilbury industrial park. The expansion will add approximately 1.1 million gigajoules of LNG storage as well as approximately 34,000 gigajoules of liquefaction capacity per day to the existing plant located adjacent to the Fraser River. Port of Alberni Traditionally a lumber port, Alberni has experienced a decline in lumber shipments but has had a new company locate within the port boundaries that manufactures activated charcoal, made from waste wood resulting from milling lumber and other sources within the forestry industry. Called CanTimber the firm will initially be shipping their product to the Port of Nanaimo by container for shipment to Asia, according to David McCormick, spokesperson for the Port of Alberni. However, the port is now working towards building a mixed breakbulk service that would make it possible for CanTimber to ship activated charcoal by ship directly from the port. Activated charcoal has a myriad of environmental uses ranging from spill cleanups, groundwater remediation, drinking water filtration and air purification to winemaking where it is used to absorb brown color pigments from white grape concentrates and for removing oil impurities and other pollutants from the air. The port, located on a 40 km inlet on the west side of Vancouver Island is also proposing an automated container handling terminal that would unload containers from ocean-going container ships and transfer them to barges or smaller ships for delivery to customers at ports up and down the West Coast. Zoran Knezevic, President and CEO said the project is the Port Alberni Transhipment Hub (PATH), a proposed container terminal to serve distribution centers primarily located along the banks of the Fraser River in Greater Vancouver area via barging. A study made of the concept says the new terminal would “service vessels from the smallest barge up to the 22,000 twenty-foot equivalent unit (TEU) container ships.” Knezevic said the port has applied to the federal government for funding under the Build Canada Plan and is actively looking for investors in the project. Port of Prince Rupert In a move that will dramatically expand its traffic mix, the Port of Prince Rupert recently completed construction of a road, rail and utility corridor to nearby Ridley Island, opening access to a 1,000-acre industrial park. The site provides shippers with: • An access road consisting of two lanes that parallel a rail loop with an overpass and an underpass to permit access to a proposed potash terminal and industries at the south end of the island. • A 3.4 km 69 kv powerline that will be owned by the port and will connect customers to the existing transmission system. • A 7.8 km loop corridor with capacity for 14 inbound tracks and 11 outbound tracks. In addition to a major potash terminal, plans are proceeding for an LNG terminal, and WestPac Terminal Inc. of Calgary, Alberta, has already entered into an agreement to build and operate an LNG receiving terminal. The island is already home to a major coal terminal. Recently, the port gained a foothold in the project cargo business on the West Coast when AAL, a global breakbulk, project cargo and heavy lift shipping operator based in Singapore, delivered equipment destined to the Alberta oilsands through the port’s recently installed ro-ro dock. AAL said its Pacific Service will now be making monthly calls at the port utilizing a fleet of three modern ‘A-Class’ 31,000-dwt multipurpose, heavy lift vessels – each with a combined lifting capacity of 700-mt. The calls by AAL are in addition to two other container services that have added the port to their itineraries: Cosco’s South China-US Southwest Coast Express (SEA) service—which recently dropped a call in Oakland—has added Prince Rupert to its port rotation and will continue to operate two other services, making some revisions in the rotations. Hanjin has also added a service called the Pacific Northeast Hanjin Express (PNH) Service. The rotation will be: Ningbo, Shanghai, Busan, Prince Rupert, Seattle, Portland, Vancouver, Busan, Kwangyang and Ningbo. Fairview Terminal, the port’s about-to-be expanded container terminal also had another banner year with a 25.11% increase in June compared to last June, rising from 52,843.TEUs to 66,111.75 TEUs, with imports up 16.77% and exports up 36.32%. However, grain and coal exports through the port were down due to an extremely cold winter, rail transportation problems and unfavorable coal markets. Port of Churchill The Port of Churchill, Canada’s only Arctic port, located in Hudson Bay is closest to the nation’s grain producing prairies. The Canadian Government’s legislated changes at the Canadian Wheat Board that removed the agency’s monopoly power and pushed it to become a commercial grain company that has now been taken over by a partnership between a Saudi grain company and U.S.–owned Bunge which also took away the port’s strongest supporter. Prior to the changes the wheat board was a major shipper of wheat and barley through the port and in the past few years grain shipments through the port have been shored up by a C$25 million five-year subsidy from Ottawa that was put in place to encourage companies to use the port after the board monopoly was removed. According to Canadian Grain Commission records for the crop year 2011-2012 a total of 5,078,000 tonnes of grain were exported through Churchill during the navigable months of August, September and October (with October being the largest at 219,000 tonnes.) But, that subsidy (of roughly $9.20 per tonne) will come to an end next year and the future of the port, owned and operated by Denver-based Omnitrax, is uncertain. Merv Tweed, President of OmniTRAX Canada, told AJOT that the railway is working hard to find customers for the port. However, a plan to export crude oil through Churchill was abandoned last year. “Last year we didn’t do any shipping from the wheat board,” he said. “So we’re kind of anticipating the same this year, knowing they’re moving to a bigger entity and they have their own facilities and demand.” He said, “We’d be happy to do more for them, but we’re looking at new business and new opportunities and anything they offer to us would be good, but we’re not expecting much.” Tweed said the port has been able to get a couple of serious commitments from companies and queries from companies throughout the industry wanting to learn more about the port’s facilities and shipping during the three-month ice-free season. Western Canadian potash has been considered as a commodity that could be shipped through the port, but Tweed said that while discussions with the industry are continuing they have not been successful. Asked if U.S. grain companies have expressed an interest in the port, Tweed said: “A little bit, we’re getting calls on by-products of grain, like pellets and things like that. “We’re looking at every possible opportunity. Our challenge is the short shipping season.” He said the port is prepared to look at handling any product that makes sense and is also looking for products that can be imported through Churchill. In previous years Russia has delivered fertilizer through the port and at one time expressed interest in partnering Churchill with the Russian port of Murmansk.