The ILWU/PMA port labor contract negotiations, congestion, and a variety of other operational problems have created significant challenges for shippers using the US West Coast ports. On the Canadian West Coast, Port Metro Vancouver (PMV) and the Port of Prince Rupert in British Columbia face their own challenges, but offer some interesting contrasts to the US situation.
Over the past year, the Canadian dollar has lost 20 percent of its value against the U.S. dollar, reducing costs for US shippers moving goods through Canada. Although shippers have been shifting cargo to the BC ports over the past year in response to the unpredictability they face in the US, PMV and Prince Rupert have largely been able to handle increased traffic, even during unexpected freight surges during the holiday shipping season when Canadian shipments had to be given temporary priority.
The BC ports also do not face some of the more vexing issues of their US counterparts – they are natural deep-water ports with available land for expansion; PMV has invested $9 billion and Prince Rupert $2 billion on infrastructure, including upgrading docks and terminals and building rail grade separations; labour relations are reported to be good; chassis pools are run by trucking companies; employers do not pay the full cost of health insurance, a significant portion of which is covered by the provincial health plan; the higher ratio of imports to exports means lower shipping costs and fewer empty containers; and ocean carriers use common terminals rather than operating their own.
PMV is Canada’s largest port, the third-largest on the West Coast (after Los Angeles/Long Beach), and the fourth-largest in North America (after LA/LB and New York/New Jersey). PMV reports it is working with rail, labour, ocean carriers, and truckers to provide shippers timely, reliable and transparent service information. Working with truckers and the federal and provincial governments to develop the Smart Truck Programme, PMV also seems to have finally resolved nagging issues with port truckers though a new licensing scheme and the addition of night gates to improve truck turn times, driver compensation, and reliability.
While Prince Rupert is a much smaller port, it is among the fastest-growing in North America, and is the closest to Asia with transit times 3 days shorter than LA/LB. The port also provided the city an economic lifeline and 3,000 jobs following collapse of the logging and fishing industries. Canadian National Railway (CN) has on-dock rail service, substantial available capacity, and a rail line that runs through the lowest grade crossing in the Rockies to Chicago and the US Gulf coast.
Finally, unlike the US, Canada has an integrated national transportation plan that includes its ports. This plan makes it easier for the Canadian government to set and implement national freight transportation priorities, such as the investments in PMV and Prince Rupert. The Canadian federal and provincial governments also seem more willing than the US federal government to step in quickly to resolve labour disputes that could disrupt the freight transportation system, as seen most recently with threatened strikes at CN and Canadian Pacific (CP) Railway.
While the BC ports appear to be operating well, there are some concerns. First, as in the US, adoption of labour-saving technologies at the ports could be a thorny issue with BC longshoremen, also represented by the ILWU, when their contract comes up for negotiation in 2018. Second, as in the US Pacific Northwest, there is increased competition for rail capacity among intermodal (i.e., cargo containers), bulk cargo (e.g., grain, coal, and timber), and natural gas/oil shippers. Third, PMV in particular, has to rebuild its reputation for reliability with shippers after threatened truck, rail, and tug-boat strikes and service disruptions since 2013. Finally, the recent BC government decision to drop proposed minimum trucking rates and set them through an appointed container trucking commissioner is certain to increase port trucking costs and may make rates somewhat less predictable for shippers.