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Moving Goods through Marine Ports in Metro Vancouver

Metro Facts in Focus | Policy Backgrounder #1:

In 2012, 124 million tonnes of goods moved through marine ports in the Metro Vancouver – the most by any port region in Canada and along the west coast of North America.

The outlook for trade is for continued growth. The growth is driven largely by international demand for British Columbian and western Canadian natural resources, as well as domestic demand for consumer goods. Through the combined efforts of both the public and private sectors, billions of dollars have been spent in this region to expand port and transportation capacity. Additional future investments have also been identified.

But emerging proposals to increase infrastructure capacity in order to bring petroleum and coal to Asian markets, and to accommodate ever increasing container imports from Asia are engendering considerable discussion about the perceived and real trade-offs between economic prosperity, livability, and the environment. Integrating goods movement into regional planning and policymaking is fundamental to reconciling these objectives and identifying synergistic solutions.

A regional dialogue must take place now to help shape informed decisions about the implementation of the Regional Growth Strategy, goods movement infrastructure investments, regulations, policies, and other key considerations and strategic issues. The series of policy backgrounders on goods movement is being prepared to support such a dialogue.

Policy Backgrounder #1 provides important background information about goods movement in the region. Getting the facts on the table is the first step in helping to foster an informed discussion. Using information from publicly available sources, this booklet provides information about the type of goods that are handled by marine terminals in the region, the historical levels of throughput, and projections for the future. Policy Backgrounder #1 also shows some of the major infrastructure investments that have been committed or completed to support goods movement.

The Metro Facts in Focus Series is designed to promote a broad understanding of the key issues and opportunities that frame Metro Vancouver’s implementation of the Regional Growth Strategy and its mandate for delivering services and solutions for a livable region.

Metro Vancouver is a political body and corporate entity operating under provincial legislation as a ‘regional district’ and ‘greater boards’ that deliver regional services, policy and political leadership on behalf of 24 local authorities. These local authorities comprise 22 municipalities, one electoral area, and one treaty First Nation. Providing timely research and analysis of regional issues is an important service by Metro Vancouver.

Introduction

Moving Goods through Marine Ports in Metropolitan Vancouver2

Moving Goods through Marine Ports in Metropolitan Vancouver 3

ContentsA. Historic Goods

Movement Throughput .................. 4

B. The Region’s Place in Goods Movement ......................... 6

C. Projections for Goods Movement Throughput .... 12

D. Infrastructure to Support Goods Movement ....................... 14

E. Towards a Regional Dialogue ...... 16

4

128114.6

101.9118.5 122.5 123.9

0

20

40

60

80

100

120

140

160

180

200

2007 2008 2009 2010 2011 2012

PORT METRO VANCOUVER TOTAL GOODS THROUGHPUT

(million tonnes)

Moving Goods through Marine Ports in Metropolitan Vancouver

0.3%

13.5%

67.6%

18.6%

PORT METRO VANCOUVER CARGO PROFILE (2012, tonnage)

Auto

Break-bulk

Bulk

Container

A. Historical Goods Movement Throughput

A diverse mix of goods are moved through 28 marine terminals in Metro Vancouver, including commodities exported to Asia and consumer products destined for retailers in Metro Vancouver, elsewhere in Canada, and the United States. Bulk and breakbulk goods comprise close to 80% of all cargo handled by the ports by tonnage, followed by containers, and lastly automobile shipments. Overall, goods throughput by tonnage has rebounded close to pre-recession levels. In 2012, about 78 percent of all goods, by tonnage, were foreign-based (the destination or origin of the good was a foreign country).


2.5 2.5 2.2 2.5 2.5 2.7

00.51.01.52.02.53.03.54.0

2007 2008 2009 2010 2011 2012

PORT METRO VANCOUVER CONTAINER THROUGHPUT

(million twenty-foot equivalent units, TEU)

457 456387 382

298

384

0

100

200

300

400

500

600

2007 2008 2009 2010 2011 2012

PORT METRO VANCOUVER AUTOMOBILE SHIPMENTS

(thousand tonnes)

0

20

40

60

80

100

120

140

160

180

200

2007 2008 2009 2010 2011 2012

79 73 6880 84 84

PORT METRO VANCOUVER BULK & BREAKBULK THROUGHPUT (million tonnes)

27 2115 17 16 17

BULK

BREAKBULKExamples of Bulk Goods: Oil, wheat, durum, canola, barley, sea salt, caustic soda, wood pellets, fertilizers, potash, coal

Examples of Breakbulk Goods: logs, lumber, steel, machinery

Container throughput is commonly measured in twenty-foot equivalent units (TEU). Most ocean-going containers are 40-ft in length, which is equivalent to 2 TEU.


B. The Region’s Place in Goods MovementThe Metro Vancouver region is situated in an important location in the global movement of goods. This is reflected in the number of terminals in the region as well as the volume of goods they collectively handle. The region’s port authority, Port Metro Vancouver, oversees two automobile terminals, 22 bulk and breakbulk terminals, and 4 container terminals. By tonnage, the region is the largest port in Canada and one of the largest ports in North America. The region’s trade is supported by a network of roads, railways, and container transloading facilities.

Bulk, Breakbulk, and Automobile Terminals

1 Cascadia (grains) 9 Pacific Elevators (grains) 17 Alliance Grain Terminals (grains)

2 Fibreco (woodchips) 10 Pacific Coast Terminal (sulphur, chemicals)

18 Vancouver Wharves (chemicals)

3 Ioco (petroleum) 11 Richardson International Terminal (grains)

19 Kinder Morgan Westridge (petroleum)

4 Univar (chemicals) 12 Petro Canada (petroleum)

20 Westshore (coal)

5 Lynnterm (East Gate) (forest products & steel)

13 Cargill Terminal (grains)

21 Wallenius Wilhelmsen Logistics (automobile)

6 Lynnterm (West Gate) (forest products & steel)

14 Shellburn (petroleum) 22 Fraser Wharves (automobile)

7 Neptune Terminals (coal, potash, grains)

15 Stanovan (petroleum) 23 West Coast Reduction (fats, oils, waxes)

8 Canexus (chemicals)

16 Rogers Sugar (sugar) 24 Annacis Rail Marine Terminal (various)

Container Terminals

25 Centerm 27 Fraser Surrey Docks

26 Vanterm 28 Deltaport


18 2

1 15 14 19 12 1025 26

27

11 13

161723

9

7 65 4 8 3

28

22

24

21

20

CANADA-USA BORDER

Bulk, Breakbulk & AutomobilesContainers

Railways

Highways & Major Roads

L E G E N D

inbound goods movement

Canada

Mexico

Chile

Brazil

United States

ChinaTaiwan

Indonesia

Hong KongThailand

SingaporeMalaysia

South KoreaJapan

0 2 4 6

MalaysiaSingapore

ThailandHong Kong

MexicoJapan

TaiwanUnited StatesSouth Korea

China

TOP TRADING NATIONS (Inbound, millions of tonnes)


The region facilitates the nation’s critical economic linkages with Asia, the United States, Mexico, and South America. China is the top origin of imports, followed by South Korea and the United States. The top destination for outbound goods is China, followed by Japan and South Korea.


China

Indonesia

Hong KongThailand

SingaporeMalaysia

Japan

Mexico

Chile

Brazil

United States

Canada

Taiwan

South Korea

TaiwanBrazilIndia

IndonesiaChile

United StatesSouth Korea

JapanChina

TOP TRADING NATIONS (Outbound, millions of tonnes)

0 5 10 15 20 25


UNITED STATES

MEXICO

CANADA

Seattle/Tacoma

Prince Rupert

Portland

Oakland

MetroVancouver

Los Angeles/Long Beach

Ports on the west coast of North America are important globally. In 2011, ports on the west coast of Canada and the United States handled 51% of the 46 million TEU throughput in North America. By comparison, Atlantic and Gulf Coast container ports handled 44%, and Mexican Pacific ports handled a much smaller 5% of container throughput.

Along the west coast of Canada and the United States, shippers have options. Los Angeles and Long Beach in California dominate the container market by moving 60% of all west coast container port throughput. Metro Vancouver, with an 11.6% share of Canada/United States west coast container traffic, is more in line with Oakland, California and Seattle/Tacoma, Washington.

Metro Vancouver is the dominant west coast port for non-containerized (bulk and breakbulk) goods.

0 2 4 6 8 10

CONTAINER THROUGHPUTMAJOR WEST COAST PORTS

(2012, million TEU)

Los Angeles

Long Beach

8.1

6.0

2.7

2.3

1.9

1.7

0.6

0.2

Oakland

Seattle

Tacoma

PrinceRupert

Portland

Metro Vancouver

0 50 100 150

NON-CONTAINERIZED THROUGHPUTMAJOR WEST COAST PORTS

(2012, million tonnes)

Portland

Tacoma

Seattle

100.8

22.2

9.2

5.4

3.9

MetroVancouver

Prince Rupert

The demand for trade is a function of international, national, and provincial/state economies. Projections from various sources provide an indication of the magnitude of growth in goods movement. These projections have been important in influencing public and private investment decisions.

1. The Province of British Columbia’s Goods Movement Throughput Projections

The Province of British Columbia’s Pacific Gateway Transportation Strategy 2012-2020 sets out new province-wide projections for the volume of commodities to be traded through ports in the province. Most of these projections are contingent on market conditions and the expansion of terminal capacities.

C. Projections for Goods Movement Throughput

Commodity/Mode Projected Growth for British Columbia Ports 2011-2020

Additional Port or Processing Capacity Required to Meet 2020 Projections

Coal +150% (56 million tonnes) +24 million tonnes

Metals and Minerals +310% (5 million tonnes) +3 million tonnes

Liquefied Natural Gas +18 million tonnes +18 million tonnes

Potash +340% (19 million tonnes) +13 million tonnes

Forest Products +100% (4 million tonnes) +2 million tonnes

Grain +5% (1 million tonne) No gap; existing capacity sufficient

Containers +105% (3 million TEUs) No gap; planned capacity expansion sufficient



0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Actuals

High

Medium

Low

PORT METRO VANCOUVER CONTAINER THROUGHPUT ACTUALS AND UNCONSTRAINED PROJECTION

(million TEUs)

2. Port Metro Vancouver’s Container Throughput Projections

The last two decades have seen the relocation of manufacturing from North America to Asia, and the containerization of imported consumer and household goods into North America. Economic growth in British Columbia and central and eastern Canada have driven the majority of the demand for import containers.

The containerization of bulk and breakbulk goods for exports is also increasing. The growth of Asian economies is driving export demand – both for commodities (e.g. forest products, metals, and energy)

and to directly satisfy consumer demand (e.g. specialty crops, meat, fish, and poultry).

Port Metro Vancouver has commissioned the development of projections for container throughput. These projections provide “low”, “medium”, and “high” throughput scenarios. To realize even the low throughput scenario, the container capacities in the region would have to be expanded significantly.

Anticipating the need for expanded capacity, the Province, Port Metro Vancouver, Port of Prince Rupert, and the private sector are actively planning and building new infrastructure.


D. Infrastructure to Support Goods MovementIn the past 10 years, the combined efforts of both the public (federal and provincial governments, TransLink, Port Metro Vancouver, and local governments) and private sectors have resulted in significant infrastructure investments in the region to support goods movement by rail and trucks. This approach is likely to continue.

Rail and trucks are the dominant means to move goods into and out of the region today. Rail transport is currently the

most economically efficient means for moving most bulk and breakbulk goods to marine terminals. About two-thirds of loaded import containers are carried by rail, and the remainder on trucks. Conversely, about two-thirds of all loaded export containers arrive at container terminals by trucks. Barge transport is not currently a major means of transporting goods in the region. Some of the key projects are shown below (the project locations and extents have been generalized).

Completed Road/Rail Projects (Year of Completion) Road/Rail Projects in Progress Road Projects Under Consideration

1 Regional Transportation Management Centre (2013) 17 South Fraser Perimeter Road 32 Pattullo Bridge Strategic Review Study

2 Port Mann Bridge/Hwy 1 (2013) 18 Tannery Road and Scott Road Intersection Upgrade

33 Highway 91 and 72nd St Interchange

3 Brooksbank Ave Underpass (2012) 19 Roberts Bank Rail Corridor Rd/Rail Grade Separations (Delta projects completed)

Marine Terminal Projects (status)

4 Lynn Creek Rail Bridge (2011) 20 Neptune/Cargill Grade Separation 34 Deltaport Terminal, Road and Rail Improvement Project (in progress)

5 Nelson Road/Highway 91 Interchange (2011) 21 Low Level Road Re-Alignment 35 Neptune Terminals Coal Handling Expansion (in progress)

6 Nordel Way Intersection Upgrades (2011) 22 Philip Ave Overpass Project 36 Roberts Bank Terminal 2 Project (planning)

7 96 Ave Widening between 152nd St and Hwy 15 (2011) 23 Western Low Level Route Extension to Marine Drive (on hold pending additional funding)

37 Westridge Marine Terminal Expansion (planning))

8 Chester Road Intersection (2010) 24 Powell Street Grade Separation 38 Fraser Surrey Docks Direct Transfer Coal Facility (planning)

9 Coast Meridian Overpass (2010) 25 Stewart Street Elevated Structure 39 YVR Jet Fuel Marine Terminal and Receiving Facility (on hold pending Provincial environmental review)

10 Pitt River Bridge and Mary Hill Interchange (2009) 26 No. 6 Road Widening between Wireless Way and Highway 91

40 Southern Railway of BC Rail Barge Ramp (completed 2010)

11 Golden Ears Bridge (2009) 27 Westminster Highway Widening (Phase 2, Nelson to McMillan)

41 Deltaport Third Berth Project (completed 2010)

12 Highway 15 Widening (2008) 28 Nelson Road Widening (Blundell to Westminster Highway

13 Highway 91A Interchange Upgrades (2009) 29 Highway 99 and 16th Avenue Interchange

14 Highway 10 Widening between 120 St and Hwy 15 (2008)

30 Eastbound Truck Climbing Lane on Highway 1 between 232nd and 264th Streets

15 8th Ave/Hwy 99, 8th Ave, and 8th Ave/Hwy 15 Upgrades (2006)

31 Bridge replacing the George Massey Tunnel

16 Various Upgrades to Land Border Crossings (2005-2012)

14

31

CANADA-USA BORDER

23 22

109

32

1

21

24 25

4

3

20

2728

26

5

17

8

1813

31

19

41

34

19

19 19

29

15

16

15

16

19

12

1419

1919

19

11

3012

6

2

2

40

38

39

15

16 16

36

Infrastructure Projects

Railways


L E G E N D

33

7

13

3537

14

31

CANADA-USA BORDER

23 22

109

32

1

21

24 25

4

3

20

2728

26

5

17

8

1813

31

19

41

34

19

19 19

29

15

16

15

16

19

12

1419

1919

19

11

3012

6

2

2

40

38

39

15

16 16

36

Infrastructure Projects

Railways


L E G E N D

33

7

13

3537


E. Towards a Regional Dialogue


Metro Vancouver is unique for having achieved broad-based agreement on land use and environment objectives through the Regional Growth Strategy and other plans. But broad-based agreement among the levels of government for goods movement remains elusive.

The benefits of trade are not in question – trade enhances the standard of living in the region and the rest of the nation. The central concern is reconciling the desire to accommodate trade and facilitate the movement of goods with the region’s commitments to livability and environmental objectives.

A regional dialogue on goods movement is urgently needed to help reconcile different

perspectives and to work towards common goals. This dialogue must be supported by evidence-based analysis, and not by public relations rhetoric. Major investment decisions, such as expanding marine terminals, highways, and watercrossings, are being made to accommodate projected goods movement throughput. These decisions could have important implications for land use, land demand and prices, environmental quality, and human health and safety. Integrating goods movement into regional planning and policymaking is crucial to reconciling these perspectives and identifying synergistic solutions. To initiate a regional dialogue, some of the key issues have been identified.

18

ISSUE #1: Protecting Human Health and Safety, and the Environment

The private sector wants to expand infrastructure capacity within the region in order to increase the export of resource-based commodities, such as petroleum and coal. Serious concerns have been made by stakeholders and communities. These concerns range from the potential effects on human health and safety, and environmental quality for the communities hosting these facilities and activities, to the role that communities should play in helping to facilitate the burning of fossil fuels abroad.

1. Are current safeguards for the movement of goods, in particular dangerous goods, sufficient and appropriate for the protection of human health and safety, and the environment in highly urbanized areas such as Metro Vancouver?

2. Are regional and cumulative human health and environmental criteria integrated into project-specific planning decisions?

3. What is the role of communities, if any, in influencing the type of goods, and the associated impacts on global climate change, to be transported through or handled within their jurisdictions?

Moving Goods through Marine Ports in Metropolitan Vancouver

ISSUE #2: Optimizing Efficiencies in the Goods Movement System

There may be practical ways to optimize the current goods movement system to improve both efficiency and effectiveness. These opportunities may reduce the urgency and the scope of current proposals to expand marine terminals, highways, and watercrossings.

1. How much more throughput is achievable by expanding the hours of goods movement operations (e.g. 24 hours) or by investing in new technology to manage the logistics of goods movement?

2. How much more throughput can existing rail capacity accommodate?

3. What role could transportation demand management measures, such as facility tolling, play in expanded highway corridors to alleviate congestion for goods movement and still manage induced demand from single-occupant vehicle trips?

4. Considering the land constraints in the region, are container-handling facilities optimally arranged in the region?

5. What is the appropriate role of local governments in addressing goods movement efficiencies on roads, rail, and marine?


ISSUE #3: Coordinating Among Port AuthoritiesPort Metro Vancouver and the Port of Prince Rupert have statutory oversight for the major deepsea marine ports in British Columbia today. But the municipalities and regions hosting these two port authorities are vastly different in terms of the urban density, availability of land for port-related development, road and rail infrastructure, and community acceptance of the local economic value associated with increases in rail, truck, and marine traffic. Some have argued for a different balance in goods movement throughput along the west coast.

1. What incentives are in place for Port Metro Vancouver, Port of Prince Rupert, and other ports on the west coast of British Columbia to cooperate?

2. What efforts are underway to investigate the feasibility and efficiency gains/losses of out-of-region container terminals, such as those proposed by Port Alberni and Ashcroft, and their potential to alleviate goods movement traffic on Metro Vancouver roads and pressures to convert agricultural lands to port-related industrial lands?

3. What are the benefits, costs, and market feasibility for expanding short-sea shipping?

4. What is the role of the federal government in coordinating goods movement traffic through ports on the west coast of British Columbia?


ISSUE #4: Responding to Uncertainty in Market Demand Projections

In the past 10 years, the federal and provincial governments have made major infrastructure investments to increase the region’s capacity for handling goods. These investment decisions were based in part on the expectation for the continued rapid growth of Asian economies, and stable trade relationships, such as between Canada and the United States. Some of these assumptions may need to be reconsidered.

In the case of China, which set off the resource boom with its heavy industries driving demand for commodities, economists are speculating that its economy will unlikely grow at 10% annually as it had done so in the past two decades, and could settle to 6% by 2020 (however, other emerging Asian economies may compensate for slower growth in trade with China). In the case of the United States, there is pending legislation to impose a fee on all containers arriving in the United States regardless of whether they landed in an American port or passed through Canada or Mexico first.

1. How responsive and adaptive are proponents of infrastructure expansion to changes in market conditions?

2. What are the economic losses if the infrastructure planned and built today is oversized or undersized relative to the actual future demand levels?

3. What are the employment, taxation, and broader economic benefits and costs to Metro Vancouver, British Columbia, and Canada if marine terminal capacity expansion does not materialize as scheduled to capture the projected demand?

21Moving Goods through Marine Ports in Metropolitan Vancouver


Sources“The Pacific Gateway Transportation Strategy 2012-2020”, Province of British Columbia, 2012. Available online at: www.pacificgateway.gov.bc.ca/documents/120402_Gateway_Strategy.pdf

“2012 Statistics Overview Report”, Port Metro Vancouver, 2013. Available online at: http://www.portmetrovancouver.com/docs/default-source/about-facts-stats/pmv-2012-stats-overview.pdf?sfvrsn=4

“Preliminary Container Traffic Projections for Port Metro Vancouver: 2011 to 2030, Container Capacity Improvement Program (CCIP) Project Definition Report (PDR) Phase – Executive Summary”, WorleyParsons Canada, May 2011. Available online at: http://portmetrovancouver.com/docs/default-source/projects-ccip/Executive_Summary_-_09409-01-GE-REP-90006-500_Rev0_110527.pdf?sfvrsn=0

“Port Metro Vancouver Container Forecasts”, Ocean Shipping Consultants, August 2012. Available online at: http://www.robertsbankterminal2.com/wp-content/uploads/Port-Metro-Vancouver-Container-Forecasts-Ocean-Shipping-Consultants-2012.pdf

“Port Metro Vancouver Container Forecasts”, Ocean Shipping Consultants, July 2013. Available online at: http://www.robertsbankterminal2.com/wp-content/uploads/Port-Metro-Vancouver-Container-Traffic-Forecast-Ocean-Shipping-Consultants-July-20131.pdf

“Prince Rupert Container Terminal”, Prince Rupert Port Authority. Available online at: http://www.rupertport.com/facilities/fairview

“Canada’s Gateways: Supply Chain Performance Monitoring Initiatives”, Louis-Paul Tardif and Mimi Sukhdeo, Transport Canada. The 5th Asian Logistics Roundtable and Conference (Vancouver), June 14, 2012. Available online at: http://alrt2012vancouver.org/presentation_papers/

“China’s third-quarter GDP growth fastest this year, but outlook dim”, Reuters, October 18, 2013. Retrieved on October 18, 2013: http://www.reuters.com/article/2013/10/18/us-china-economy-gdp-idUSBRE99H02T20131018

“China’s Economic Growth Outlook Grim: Barclays Sees Economy Growing by Less than 6% by 2020, International Business Times, September 18, 2013. Retrieved on November 6, 2013: http://www.ibtimes.com/chinas-economic-growth-outlook-grim-barclays-sees-economy-growing-less-6-2020-1407434

“Goldman Strategist’s 6% Call for China Growth”, The Wall Street Journal, June 13, 2013. Retrieved on August 25, 2013: http://blogs.wsj.com/chinarealtime/2013/06/13/goldman-strategists-6-call-for-china-growth/

This booklet was produced with the research assistance of Colledge Transportation Consulting Inc.

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