RECENT disruptions in moving grain to the West Coast are symptoms of inadequate attention, planning and investment in Canada’s Asia-Pacific trade route.
Labour disputes, derailments and winter storms only exacerbate a chronic problem associated with trying to push an increasing amount of traffic through the narrow funnel of two rail lines to two ports. The tieups hurt the entire economy, but agriculture particularly suffers through rising costs and declining reputation as a reliable supplier.
Leaders of Canada’s pulse industry recently testified before the Senate standing committee on transport and communications that Canada had lost pulse sales to Britain because India and Pakistan provided better transportation service.
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They said they were once able to rely on an average shipping time of 30 days, but that has increased to 45 to 60 days, occasionally longer.
Companies in the bulk handling system, despite all the investment in inland terminals and 100-car spots, complain turnaround times have not improved. Shippers of other commodities and goods have similar complaints.
How did we get to this situation?
Between 1995 and 2005, Canada’s exports to China more than doubled to $7.1 billion. In the same time, our imports from the country grew 550 percent to almost $30 billion.
Most of the goods from China are moved in steel containers. The standard unit of measurement in containers is the 20-foot equivalent unit, or TEU.
With the explosive growth in Asia-North America trade, container traffic across the Pacific is expected to more than double to 33.5 million TEUs by 2015 from 15.3 million in 2003.
Ships built nine years ago were designed to carry 6,000 TEUs. Today the largest are built to carry 11,000.
No North American west coast port has adequately expanded to accommodate this increase in traffic and most are scrambling to catch up.
In Canada, the recognition has been tardy, but a plan is starting to develop.
The two railways have increased capital spending to fix bottlenecks.
Prince Rupert is building a container port that, at a cost of $160 million, will be able to handle 500,000 TEUs annually, with future expansion plans to two million TEUs. Vancouver Port has also invested in improvements.
The federal government in October produced the Asia Pacific Gateway and Corridor Initiative with a target of spending $591 million for a variety of infrastructure, transportation technology and border security projects. The private sector has committed $3 billion to the initiative.
It capitalized on the facts that Vancouver and Prince Rupert are closer to Asia than American ports and that Canadian railways have direct routes to the U.S. industrial midwest. The goal is to increase Canada’s share of container traffic to 14 percent from nine percent.
These initiatives are laudable, but more must be done.
Serious consideration must be given to proposals from several prairie cities for inland container ports co-ordinating container traffic to reduce the pressure on West Coast facilities.
Regulations that severely limit container movement in Canada should be eliminated. These two initiatives should help free a supply of containers for agricultural goods.
But the solution to west coast congestion does not solely rest on infrastructure and regulation.
There is a strong perception in the agricultural community that the railways’ management of their infrastructure, particularly CN Rail, adds to congestion and shipping problems.
This perception was reflected last week in a formal complaint by smaller grain shippers to the Canadian Transportation Agency and by the Western Grain Elevator’s Association’s urging that government amend the Canadian Transportation Act to impose more accountability and penalties for poor rail performance.
While penalties might be required, so too is a change in thinking. Finger pointing and recriminations among players in west coast trade and transport should be replaced by a sorely lacking spirit of co-operation. This could be given form through a regular forum created to share information, identify constraints and improve co-ordination. By strengthening the whole trade and transport chain, each link becomes stronger.
Only though this spirit will the rewards of booming Asian trade be fully captured and distributed to all.
Bruce Dyck, Terry Fries, Barb Glen, D’Arce McMillan and Ken Zacharias collaborate in the writing of Western Producer editorials.
