Numbers fail to show a container capacity crunch at West Coast ports

Editor:

Re: Country faces container capacity crunch without T2, port warns, Jan. 22

article continues below

There is no container capacity crunch. West Coast Canada will have sufficient container terminal capacity for the foreseeable future.

The Vancouver Fraser Port Authority (VFPA) has been spreading this myth for years but the facts say otherwise.

VFPA likes to forget that there are two major container terminals on the West Coast. Prince Rupert has capacity potential to grow to a super port handling four to five million containers per year. Add that to the expansions at Vancouver area ports and Canada will have container terminal capacity in the 10 to 11 million range when it is needed versus a best case scenario of about 8.2 million containers being handled by 2040.

VFPA has never produced a business case for T2. Many times it has been asked, but never has it produced a document that any normal business entity would rely on to justify a project of this magnitude. Instead it keeps repeating the myth of a coming “container crunch.” These are taxpayer assets and funds being invested in a multi-billion dollar project with no indication of the expected return on investment. Any normal business would have abandoned T2 years ago.

VFPA consistently underperforms against its forecast increases in container traffic. It has missed every one of its last five forecasts and its cumulative annual compound growth rate languishes at three per cent. Prince Rupert’s container volumes have doubled in the last five years, with its volumes increasing 12 per cent in 2018 alone.

With expansions underway or in place at two of Vancouver’s existing container terminals and a third one expected to start soon, plus ongoing expansion at Prince Rupert, there is no shortage of container capacity. In fact, Prince Rupert has the potential to grow to as much as four to five million containers (TEUs) if the market requires it.

Prince Rupert has seen its container volumes grow by double digits whereas Vancouver languishes in the three per cent range. Prince Rupert is two sailing days closer to Asia, has faster, less congested and easier rail access to the east and has very few environmental issues when compared to Vancouver.

T2, if built, would be the most expensive container terminal project anywhere in the world. Expansion at Prince Rupert can add container capacity equivalent to T2 for half the cost.

Rail traffic in and out of Vancouver is a big issue. The rail route east through the Rockies is heavily congested. Grain and potash shippers are complaining that their products are being delayed. More oil is being moved by rail. This southern route simply cannot handle the huge increases in containers were T2 to be built.

Presently VFPA in total handles 3.4 million containers (TEU) per annum, plus one million for Prince Rupert for a West Coast total of 4.4 million TEU. If total West Coast Canada container traffic expands by three to four per cent per annum (generous in view of past history), it will grow to 8.2 million by 2040, still far less than future capacity of 10 to 11 million if the total build out is required. And all this without T2.

Furthermore, as much as 25 per cent of containers handled are U.S. origin or destined, bringing little or no economic advantage. U.S. traffic can be re-routed via U.S. ports.

This current public relations push by the port authority -- speeches, interviews, media articles everywhere -- is all about trying to persuade the review panel to approve T2. It isn’t working.

Roger Emsley

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