Harbour Link Blog Archive

Optimizing Port Capacity

Posted 2019-10-28 by Harbour Link in opinion

In a blog posted in June 2014 we raised the question “Is T2 still needed”.<\p>

We have a long history as a direct participant in Vancouver’s container business, which includes successfully establishing the Port’s first container facility at Centennial Pier (now Centerm), establishing Vanterm, ridding the Gateway from the shackles of the “Container Clause” and subsequently transitioning Vanterm from straddle carriers to an RTG operating system.<\p>

Harbour Link’s business approach is to achieve seamless supply chains that are able to adapt to the evolving trends and demands of the container industry. Achieving seamless supply chains, requires Harbour Link’s staff to be knowledgeable in all the logistical components needed to get containerized cargo seamlessly from point of origin to its final destination. Indeed, it requires us to look well beyond the boundary of our specific involvement as a port interface drayage service provider and to understand the complexities of each customers supply chain by working closely with all stakeholders to achieve the harmonized and uninterrupted transit of containers between the Port and point of origin / destination.<\p>

In our previous post, the cost to build T2 (a terminal planned to accommodate the Port’s future container growth) was projected to be in the order of $2.5 billion. From recent reports the development of T2 is now projected to be about $3billion. Similarly, the permitting hurdles that must be crossed before the development of T2 can begin appear to be mounting. Community opposition also continues to be very vocal and disconcerting.<\p>

As noted in our previous blog, the hurdles to build T2 appear to make the business case for its development at this time increasingly challenging.<\p>

An alternative to T2 has been put forward by GCT, the terminal operator of Deltaport, to construct at their own cost a 4th berth and additional uplands to Deltaport. This is proffered by GCT to be an excellent solution to enable the Gateway to have the port infrastructure required to accommodate both projected ship calls and growth in traffic volumes.<\p>

GCT’s proposal appears to fulfill the immediate requirements needed to enable the Vancouver Gateway to handle forecasted growth in the Port’s container trade. GCT’s expansion plan also appears to be much less intrusive to achieve both Permitting and Community acceptance and is a much less costly solution to enable the Port to facilitate projected traffic volumes in the near term.<\p>

Add the evolving dynamics that are taking place in the container shipping sector, i.e. the emergence of much larger vessels (18,000 - 23,000TEU), which are already plying trade lanes between the Far-East and Europe, and the continued consolidation of marine carriers into shared venture service alliances, makes the challenge of forecasting port infrastructure requirements in the longer term, a leap of faith into the unknown and a bit of a crap shoot.<\p>

Regardless of which path VFPA takes to ensure that adequate infrastructure is in place to accommodate projected container trade growth, we believe the time is now to focus on achieving a solution that results in faster transit of containers through the port, and by extension, better utilization of existing terminal uplands and infrastructure.<\p>

We are aware of the excellent advances that have been introduced to expedite the flow of rail traffic at the Gateway, particularly the enhancements made at Deltaport by GCT. These enhancements have resulted in the accelerated flow of rail traffic and by extension, has increased the throughput capacity of Deltaport, We applaud all the parties involved in bringing this new paradigm of rail intermodal connectivity together.<\p>

Regrettably, however, getting containers through the port by truck remains a laborious and time consuming event. It commonly takes 3 days after an import container is released by the shipping line and regulatory authorities, to obtain the essential reservation needed by the TLS drayage carrier to pick up the container, or conversely to deliver an export container to the port. And when a container is culled for examination by CBSA in accordance with Canada’s new security objectives, the same reservation protocols are applied, resulting in the dwell time for these containers escalating to 6 days or more.<\p>

To achieve greater throughput capacity at the Port’s existing marine terminals, we believe greater focus should be placed on minimizing container dwell time and improving operating processes to optimize the throughput capacity of the existing footprint of the marine terminals.<\p>

Unlike many of the major container gateways in Asian and Europe, who have for many years recognized the value of their rivers as natural arterial corridors to expand their inland markets, Vancouver has neglected to take advantage of the natural corridor provided by the Fraser River, with its ability to shuttle container’s by barge to strategically located nodes (situated at key points along the river) for the staging and transfer of containers to trucks and railheads on a 24/7 basis to match customer supply chain requirements.<\p>

We believe significant cost and speed-to-market benefits can be achieved by establishing a barging service that connects the Port’s container terminals to strategically located nodes along the Fraser River (eventually to Mission). These nodes would serve as focal points for the distribution and consolidation of containers to/from importers, exporter, 3PL entities and the CP & CN intermodal railhead located in Port Coquitlam and Port Mann respectively for non-unit train transit points. A barging service would significantly reduce container dwell time at the Port (24 hours) to enable greater use of existing port uplands to handle significantly greater annual throughput on the existing port infrastructure footprint.<\p>

Other cost benefits would flow from the use of barges. These include achieving a significant reduction in road truck traffic to mitigate the present convergence “Funnel Effect” created by the need for all truck traffic to go directly to the Port. It would also achieve a reduced carbon footage for the transit of containers and result in the deferment of essential capital projects that will otherwise be needed to maintain traffic fluidity; i.e. the development of additional road infrastructure, tunnels and bridge crossings at the Gateway.<\p>

As a solution based intermodal carrier focused on the Port of Vancouver Gateway, we strongly believe the deployment of shuttle barge services will provide the solution needed to achieve traffic dissemination that will enable the Gateway to seamlessly handle future projected container volumes.<\p>

The alternative of maintaining the status quo will exacerbate the “funnel effect” of the road corridors that link the port with the geographic region of its growing market. This funnel effect will result in worsening traffic bottlenecks and community NIMBY uprisings against port activities, and will adversely impact the Gateway’s competitive advantages.<\p>

Another consideration that would increase the capacity of the Port’s existing footprint is the development of a near-dock container depot with rail sidings linked to the Port’s rail corridors. This facility should be capable of handling westbound double stack trains and be used to clear the trains of empty containers and export containers that arrive before the earliest receiving date (ERD) of the intended vessel. This simple step of clearing westbound trains of empty and export containers before the train enters the port would free up large areas of the port’s existing container terminals to enable each terminal to handle substantially greater throughput. It would also substantially reduce the volume of truck traffic visiting the terminals to pick-up MT containers that are presently received at the terminal ex-rail and needed by locally based exporters to accommodate their loading activities.<\p>

The near-dock container depot could also be used to reassemble containers after CBSA examination in readiness for subsequent pick up by the beneficial owner, rather than returning them to the Port as is presently the case. Alternatively, CBSA containers could be transferred to Harbour Link’s own CBSA Sufferance Bonded and highly secure Off-Dock terminal, which is located in close proximity to the TCEF CBSA examination facility.<\p>

So to answer the question “Is T2 still needed” our conclusion is that significant market changes are taking place that impact the merits of the assumptions used to warrant the T2 development.<\p>

Initiating a strategic plan to reduce the dwell time of containers at the Port’s terminals by achieving the expedited transfer of containers via shuttle barges to strategically located container nodes on the Fraser River will, in our opinion, add substantial additional throughput capacity to the Vancouver Gateway. The addition of strategically placed near dock container depots to clear unit trains of empty containers and also export containers designated to be loaded to ships before the earliest receiving date (ERD) of the intended vessel will also add further throughput capacity. We believe the above described initiatives combined with the adoption of the GCT option to add a 4th berth and additional uplands to Deltaport provide the solutions needed to accommodate projected near-term growth in the port’s container trade.<\p>