SUPPORT REQUIREMENTS FOR PACIFIC PORTS (2007)

Without significant investment and transport linkage plans in all modes of transport, specifically those supporting our deep-sea ports, the Province of British Columbia and, ultimately, Canada will lose its competitive edge in global trade with Asia to the United States.

The Province of British Columbia, in conjunction with the federal government, needs a province-wide co-ordinated Port Support Strategy.

At present, our supporting infrastructure is both fragmented and severely in need of a comprehensive maintenance program and upgrade. Simply put, we are not strategically organized to be globally competitive in the port business.

Our primary focus for such a system should be global economic competitiveness as a group of ports even as they compete among each other. Prince Rupert, Terrace-Kitimat and the Northwest Corridor need to be part of the discussion, as do Vancouver and Vancouver Island ports.

We need a province-wide strategy for land use “best practices” and ensure improvements through transportation linkage plans covering all modes of transport and they need to be accomplished in a cost and environmentally effective manner for both ports and related infrastructure.

Bigger Vessels will demand more Productive Port Systems
Dr. Chang Ho Yang, a research fellow at the Shipping Logistics and Port Research Centre of the Korea Maritime Institute, recently wrote a paper in which he addressed the hub port concept , This concept demonstrates that as more very large container vessels are commissioned there will be a requirements for a mega-hub port for the North American Pacific coast. Not surprisingly, a similar approach would be considered for our principal trading partner, North East Asia, which would need to accommodate China, Japan and Korea.

He points out that shipping companies avoid calling at container terminals with low productivity in order to avoid port layover time especially with their larger vessels. Innovations in container handling systems are required to significantly increase productivity to meet the increased demand of the larger vessels.

“A hub port where very large container ships would call must not only be a simple hub port,” says Dr. Yang, “but also become a logistics platform. It must be developed as part of a concept that forms a part of the logistics chain serving individual industries and companies within them. In order to respond to the needs of strategic alliances among shipping lines after the appearance of very large container ships, ports must adopt a strategy to create a more competitive supply chain than other ports.”

The competitive posture for ports is determined mainly by vessel waittime, cargo-handling productivity, and transshipment service for cargos.

In the future “port competitiveness will depend on the integrated and efficient transport network for rail transport, feeder transport, and inland transport by truck, as well as that vertical and horizontal co-operation which provides value-added service to port users.”

An Integrated Port Authority for Canada’s Pacific Gateway
The Chair of the Fraser River Port Authority, Peter Podovinikoff, has presented a vision for a new integrated port authority: “Global Competitor, Community Partner.” In it, he points out that as Canada’s Pacific Gateway, Lower Mainland ports and, indeed, all Canada’s West Coast ports have a significant opportunity for growth.

The Gateway will require the building of terminal, rail and road infrastructure to meet increased cargo capacity required by 2015. Furthermore, the “Premier’s Challenge” calls for eight to nine million 20-foot equivalent units (TEU’s) to be handled within this system by 2020.

Mr. Podovinikoff said capital investments in Gateway will require billions of dollars for a BC Port Competitiveness Plan, including $3 billion for a provincial Gateway Program; and a proposed $590 million for a Federal Pacific Gateway Initiative.

As a step in this direction, the federal government has asked the port authorities to explore integration. InterVISTAS Consulting Inc. has been supporting the port authorities’ task force in this effort to find ways to become more globally competitive and capture a larger share of growing Pacific volumes.

Mr. Podovinikoff says, “The task force consulted with and surveyed 57 stakeholders, including other port authorities, government, shipping lines, shippers, domestic shipping, cruise lines and tourism operators, community groups, First Nations, labour organizations, trucking, railway and terminal operators. Eighty per cent of them supported an integrated port authority.”

While concerns were expressed through the consultation process about the potential for increased bureaucracy, reduction in local responsiveness and monopolistic behaviour, he adds, “supporters of integration see the opportunity for improved land use planning and co-ordination, more effective marketing, enhanced financial resources, possible overhead reductions, greater influence on national priorities and increased human resource opportunities and expertise.”

The task force has recommended that the three Lower Mainland port authorities should be amalgamated. It has also recommended that the new port authority should include at least one operating division for the Fraser River. To address these recommendations, a “Transition Committee” has already been formed with representatives of each port authority, to engage expertise and advice to develop a transition plan, develop the plan and then implement it.

Incentive Capital and Technology needed
All ports in British Columbia, which are serving the rest of Canada, depend on the same supporting infrastructure. Incentives are needed to bring out the capital and to develop the technology. These incentives could include fast write-offs, capital gains’ exemptions and others envisioned by investment bankers to encourage the application of risk capital.

There is an opportunity to create something new, which is more responsive and effective. A BC Ports Strategy is needed, but there is a very limited window in which to act.

THE CHAMBER RECOMMENDS

That the federal government support the development of port and supporting infrastructure development by:

a) Allocating funds in the current and subsequent fiscal years to support these projects;
b) Providing incentives from within its jurisdictional area to support capital contributions and technological development for port and supporting infrastructure development purposes; and
c) Ensuring that its applicable regulatory processes are configured for the rapid approval of projects in this sector.