Harbour Link Blog Archive

Policy Question: Canada’s Ports

Posted 2012-01-18 by Harbour Link in opinion

We are often asked who is responsible to ensure that Canada’s Ports are cost and performance competitive and are operated in a manner to optimize the movement of Canada’s international trade for the benefit of all importers and exporters.

Why the Question: The question flows from the ongoing challenges being experienced at the Port of Vancouver with respect to achieving the efficient and cost competitive movement of containers to and from the Port.

In attempting to address these challenges many port stakeholders lack certainty as to who is ultimately responsible for ensuring that the Port is competitive and operates on a level playing field to enable Canada’s trading community to compete in the global marketplace.

Responsibility for the Port of Vancouver rests with the Vancouver Fraser Port Authority, otherwise known as Port Metro Vancouver (PMV), which is responsible for the governance, oversight and management of the Port. The less certain issue is what authority does PMV have to correct the behavior of a stakeholder or stakeholders when they adopt policies that adversely impact the cost of doing business at the port for the greater good of the Gateway.

The uncertainty of PMV’s authority to intercede when a stakeholder arbitrarily adopts a policy without first obtaining PMV approval is extremely disconcerting. Surely it makes good business sense and practice for a stakeholder to engage in prior consultation with the stakeholders that will be affected by the proposed policy by obtaining their input and a comprehensive understanding of the ramifications the policy will have on the flow of trade at the port. Such prior consultation allows the policy to be appropriately modified. It also contributes greatly to achieving consensus and support for the adoption of the policy as an enhancement for the greater good of the Gateway.

Unfortunately, the adoption of self serving operational policies by individual stakeholders in recent times has resulted in the operational performance of the Port being adversely affected because they are based strictly on enhancing their own interests, without considering the impact the policy will have on the Port’s customers and the continued support of their trade.

We at Harbour Link are very supportive of new initiatives by stakeholders, providing prior meaningful consultation with the affected stakeholders is undertaken to ensure the initiative is not flawed and will improve the competitive flow of trade for the greater good of the Gateway. However, who intercedes, when the fluidity of cargo and container transit is hampered by the operational priorities of one or more of the stakeholders to the detriment of others, and who bears the responsibility to ensure that stakeholders correct their behaviour to serve, in a balanced and fair manner, the needs of all the Port’s customers equally?

We believe this responsibility rests with Port Metro Vancouver. PMV was given this responsibility by the Government of Canada through the Ministry of Transport and Transport Canada. These responsibilities include providing leadership in the development of the Gateway to optimize the competitiveness of Canada as an international trading nation and to develop and enact initiatives needed to improve port performance, interconnectivity, cooperation and the deployment of integrated port systems for the benefit of all port stakeholders and their customers.

When one or more stakeholders enact a policy that adversely impedes the performance of other members of the port community, we believe the Port Authority has a responsibility to intercede to correct the situation. Moreover, we believe that when the Port Authority is blocked in its efforts to remedy a detrimental situation, a mechanism must be in place to enable the Government of Canada through Transport Canada to intercede to resolve the matter through a consultative process that achieves a mutually workable resolution for the betterment of the Gateway.

Indeed, in our opinion, it is imperative that Canada’s Ports continue, foremost, to serve Canada’s trading interests and are a key component of Canada’s transportation system in providing competitive and seamless supply chains for the transit of Canada’s international trade.

Recent examples of policies adopted at Vancouver by stakeholders without first engaging in prior consultation with the affected parties of the policy to assess the acceptability and impact the policy will have on Port stakeholders include the following:

• The adoption of an annual license fee of $300 per truck by PMV, without first assessing the fairness and the differing cost impact of the fee on a local and a long distance truck carrier. A long haul carrier moves, at best, one container per day depending on the inland point of origin or destination, whereas a local truck carrier is able to move an average of 5 containers per day. A much fairer application of the fee (introduced by PMV to offset the costs incurred to administer the truck licensing system), would be to apply the fee based on container units (picked-up/delivered) not per truck.

• The decision by PMV to impose an indefinite moratorium on the issuance of truck licenses to Owner Operators without first assessing, through discussion with the trucking sector, the impact such a moratorium will have on the business of individual trucking firms and the growth of both the port’s and a trucking firms customer base.

• The adoption of the Terminal Gate Container Initiative (TGCI) by the terminal operators without first engaging in discussions with stakeholders to explain the rationale for adopting the initiative and obtaining their input to gain a full understanding of the ramifications such an initiative will have on the cost and flow of port trade. After announcing the TGCI in May for implementation July 2011, it required a further 6 months of intensive discussions led by the BCTA for inclusion of modifications before being finally adopted on January 1, 2012 to dovetail with the commercial requirements needed by Canada’s exporting community.

Given the recent miss queues that have been encountered, we believe the time has come for PMV to take on a greater leadership role in the oversight of port activities. Allowing stakeholders to enact policies without first engaging in meaningful discussions with the affected stakeholders of the policy, and thereby gain a comprehensive understanding of the impact the policy will have on port users is a sound respectful business practice that contributes to building greater cooperation between all stakeholders. It also fosters supportive and open dialogue to achieve enhancements for the greater good of the Gateway.

We also believe similar oversight is required by PMV in the adoption of new port charges by stakeholders without the stakeholder first substantiating the rationale and fairness of the costs to support adopting the charge or imposing a specific or general rate increase to a charge/charges.