Canadian ports: Opportunities and challenges in the age of expansion



Dr. Michael C. Ircha, Senior Advisor, Association of Canadian Port Authorities, Ottawa, Canada


In 2005, a forecast of container trade growth found that global containerisation should almost double in the coming decade, with container throughput in North America expected to increase by 75 per cent. Much of the anticipated growth comes from increased trade with China and other Asian nations. Container ports can be seen as gateways that connect continental trade corridors with the global marketplace. This article will outline international trade trends and the opportunities and challenges facing North American ports. The development of gateways and trade corridors is also considered, along with the impact of container trade growth on ports.

As a result of the earlier Free Trade Agreement (FTA) with the US and the subsequent North American Free Trade Agreement (NAFTA) that included Mexico, Canada’s international trade has shifted north-south. This trend has led to numerous trade corridor promotion organisations across the country. Trade corridors involve products, services and information flowing through communities in geographic patterns.

Gateways for trade corridors
During the past decade, governments have paid considerable attention to trade corridors, seeking to provide public investment to facilitate trade. Most proposed north-south trade corridors link US Interstate Highways with their Canadian counterparts. However, other than some improvements in selected border crossings, little has been achieved.

In recent years, trade has become increasingly global. Trade corridor proponents have come to see ports as gateways connecting proposed corridors to the global marketplace. In the Canadian context, the first gateway is the Asia-Pacific Gateway and Corridor Initiative focused on the lower British Columbia mainland, Prince Rupert and the ports’ hinterlands. The Asia- Pacific Gateway Initiative received C$591 million in federal funding to supplement provincial, municipal and private support to develop and enhance essential transportation infrastructure. The Initiative’s aim is to reduce congestion and ease the flow of goods through the ports of Vancouver and Prince Rupert.

The Halifax Gateway Council was established in 2004. Its objective is to tap into the growing container trade with Asia being diverted through the Suez to the east coast due to congestion concerns in west coast ports. Last year, Melford International Terminal Inc. purchased a large tract of Nova Scotia land, valued at C$5 million, for its planned container terminal at the Strait of Canso, as part of a broader Atlantic Gateway initiative. Sydney, Nova Scotia, has joined the queue, seeking container terminals for its port. Meanwhile, Halifax and Saint John continue to seek additional container throughput for their existing under-used container terminals. However, merely focusing on ports and terminal improvements as a gateway strategy may not be the most effective approach. A more comprehensive model is needed to also address congested highways and intermodal rail systems.

Container trade
Container traffic continues to grow worldwide. A 2005 forecast of container trade growth by Ocean Shipping Consultants found that global containerisation should almost double in the coming decade with container throughput in North America expected to increase by 75 per cent. Much of the anticipated growth comes from increased trade with China and other Asian nations. Although a significant proportion of this throughput will go through west coast ports, growth is expected in Asian traffic to and from the east coast via the Suez Canal. In 2004, some 22 per cent of Asia-US traffic moved through east coast ports, with this trade growing at almost twice the rate of the west coast due to congestion delays. Added port constraints on the west coast include environmental restrictions and increasing intermodal rail rates. These will probably encourage a further shift to eastcoast ports. Optimistic container growth forecasts now need to be tempered by the US economic recession. In recent months, US west coast ports have noted a decline in container throughput due to problems in the US housing market and the associated loss in consumer confidence.

In recent years, containerisation growth has caused congestion and ship delays in west coast ports. In Vancouver, delays led the two Canadian rail operators CN and CP to take the unprecedented step of co-operating by sharing regional rail lines to move containers more efficiently. In the US, major investments have been made to improve intermodal movements through congested urban areas, such as the Alameda Corridor in Los Angeles/Long Beach.

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