Vancouver port launches rail upgrades amid delays

Vancouver port launches rail upgrades amid delays

Cargo volume at the port of Vancouver is increasing faster than capacity, increasing container dwell time and causing rail delays. Photo credit: Shutterstock.com.

An agreement signed Thursday by the port of Vancouver, Canadian National Railway, and the Canadian federal government will upgrade rail infrastructure in order to reduce excessive container dwell times and improve traffic flow at the country’s largest port.

The development project, a timeline for which has not yet been published, will result in expanded road and rail infrastructure in the harbor area and beyond. It involves double-tracking a 4 km section of rail that links expanding import and export terminals on the south shore of the Burrard Inlet to the national rail network. The inlet services the Vantermand Centerm container terminals. The long-term development project to increase infrastructure capacity in the greater Vancouver area is designed to meet the demands of growing imports and exports as the port of Vancouver expands its share of intermodal traffic moving to eastern Canada and the US Midwest.

Capacity crunch

As a major gateway for North American trade with Asia, Vancouver has reached a critical stage. Cargo volumes are increasing faster than capacity, pushing terminal utilization to 85 percent, compared with a maximum industry standard of 80 percent, and causing rail delays.

“Increasing run-through rail capacity with strategic investments will benefit all aspects of the supply chain. With today’s announcement, Canada is signaling to our international trade partners that we take trade and its importance to the Canadian economy very seriously,” said JJ Ruest, president and CEO at CN.

If capacity concerns are not addressed, discretionary cargo will find other gateways. The infrastructure limitations are especially evident in the rail container dwell times. Like all North American ports, Vancouver attempts to keep dwell times under three days. On Wednesday, the dwell times at the Vanterm terminal were five to seven days, according to figures published by the port. Dwell times were three to five days at the Centerm terminal and more than seven days at Deltaport. Over the past 12 months, the only sub-three-day dwell time monthly average was recorded last May.

Vancouver’s marine terminals have been handling truck traffic with average turn times of about 40 minutes, said David Earle, president of the British Columbia Trucking Association. Contributing to the truck fluidity is a dashboard on the port of Vancouver website that shows truck wait times at the terminals in real time.

Regional competition

Vancouver continues to expand its market share in the competitive Pacific Northwest region of North America that also includes Prince Rupert and the Northwest Seaport Alliance of Seattle and Tacoma. Vancouver’s share of the region’s containerized imports from Asia increased last year to 48 percent from 44 percent in 2011, based upon a JOC.com analysis of Canadian and US port statistics. In 2018, Vancouver’s total laden import and export TEU volume, as well as empties, increased 4.4 percent from 2017, according to port statistics.

In addition to the expansion of rail infrastructure in the harbor area, Vancouver’s marine terminals are also engaged in expansion projects. Its three major container terminals are operating at 85 percent utilization, said Cliff Stewart, the port’s vice president of infrastructure. Port and terminal executives in North America consider 80 percent utilization to be a terminal’s maximum effective capacity before service levels begin to deteriorate.

Other major gateways, including Los Angeles-Long Beach and New York-New Jersey, have experienced congestion problems since fall, due in part to the front-loading of imports of consumer merchandise and manufacturing imports to remain ahead of threatened tariffs on imports from China.

Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter:@billmongelluzzo.