Canada’s west coast container ports rank among the worst in the world, according to a recent report.
The Port of Prince Rupert rated 344th out of the 370 container ports ranked by the World Bank and S&P Global Market Intelligence for 2021.
The Port of Vancouver fared even worse, taking the 368th spot on the list. Only the ports at Long Beach and Los Angeles rated lower.
“It’s definitely not where you’d want to see Canada rank,” said Greg Northey, vice-president of corporate affairs with Pulse Canada.
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“It’s not great and there is clearly room for improvement.”
Mark Hemmes, president of Quorum Corp., said the report opened a lot of eyes.
“There’s a multitude of reasons why the ratings went so low but it is bothersome,” said Canada’s grain monitor.
“All the west coast ports in that study just got trashed.”
The Vancouver Fraser Port Authority said the report reflects an analysis at a unique point in time that included impacts from last summer’s wildfires and severe November flooding in British Columbia, which cut off the port from supply chains fully or partially for 17 days.
“In addition to these extraordinary weather events, the Port of Vancouver and all west coast ports were impacted by the surge in North American demand for imports from Asia, which resulted in significant congestion and delays,” the port authority said in an email.
Hemmes said COVID is a big reason why all of North America’s west coast ports performed so poorly.
Shipments from Asia were severely curtailed at the start of COVID and then came on like gangbusters when people started going back to work.
Ports operate on a just-in-time system that functions well as long as there are no major disruptions.
“And then all of the sudden COVID hit and then it just went into the toilet,” he said.
The ports are taking the brunt of the criticism but the fault lies with the entire system.
The railways parked their fixed fleet of rail cars that carry containers and then suddenly had to bring them back into service and move three times the normal volume with the same number of cars.
Hemmes also noted that Canada’s west coast ports had a harder time rebounding from the COVID disruption than other ports because a lot of the goods flowing in from Asia need to be transported far away to places like Chicago and Toronto and Montreal.
The length of haul in a port like Rotterdam in Europe is a fraction of what it is in Canada, so it is easier to get back to a normal flow of goods.
The Vancouver Fraser Port Authority said it is constantly working on reducing bottlenecks and improving efficiencies.
It is currently leading a more than $1 billion infrastructure program with projects under construction across the Lower Mainland.
“Since its amalgamation in 2008, the Port of Vancouver’s international trade has grown by approximately 40 percent, which is a testament to business confidence in the port,” said the authority.
Hemmes gives the port good markes for initiatives such as finding a large lot in which to store empty containers and reduce congestion at the terminals.
However, he said there is a long way to go to fix the existing problems. He just returned from a motorcycle trip to B.C. and was “astounded” by the number of empty containers parked in Vancouver and Prince Rupert.
“It’s going to take another couple of years before we get things back into something that is akin to what it used to be,” said Hemmes.
Northey said the operational environment at the Port of Vancouver is “really challenging.”
“Other container ports can create a lot more space offsite for instance with containers just because there’s less of that urban environment around them,” he said.
Northey feels the federal government is aware of the troubles at Canada’s west coast ports.
“There is a lot of focus on it, which is good,” he said.
“Government has taken notice. They have put a priority on it, especially the Port of Vancouver.”
Deputy minister of transport Michael Keenan visited the Port of Vancouver in early summer to talk about the problems. The visit resulted in the establishment of a container working group and a bulk vessel working group to address some of the larger issues facing the port.
Northey said the good news is that container shipping rates have come down and are now about half of the recent highs.
The bad news is that those levels are still historically high and direct shipping routes from Canada to places like Latin America and India remain cancelled.
“Obviously, everyone is hopeful with the new crop coming off but the underlying conditions haven’t necessarily eased to the point where folks think it’s going to be back where it was,” he said.
“It’s definitely not to the point where we’d like it to be.”
According to the World Bank report, more than 80 percent of global merchandise trade is transported by marine vessels and 35 percent of that volume moves by container.
Container cargo tends to be high-value goods, which is why it accounts for more than 60 percent of the commercial value of merchandise transported by ships.
“Poorly performing ports are characterized by limitations in spatial and operating efficiency, limitations in maritime and landside access, inadequate oversight and poor co-ordination between the public agencies involved, resulting in a lack of predictability and reliability,” according to the 104-page report.
“The result far too often is that instead of facilitating trade, the port increases the cost of imports and exports, reduces competitiveness and inhibits economic growth and poverty reduction.”
The Container Port Performance Index 2021 is the second edition of the index.
The rankings are based on data provided by S&P’s Port Performance Program, which includes 11 of the world’s largest liner shipping companies, accounting for close to 80 percent of the global fleet.
In 2021, the shipping companies captured a series of time stamp data for 164,500 port calls involving 443 ports.
For a port to qualify for inclusion in the index it must have registered at least 20 valid port calls in the calendar year, which is why the number shrunk to 370 ports.
The report authors believe the S&P data provides an objective measure for comparing performance across ports.
