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Vancouver Port Congestion take vows
On the Burrard Inlet in Vancouver, tall cranes hoist containers off ships onto the docks of Canada’s busiest port. And there the containers sit.
North American ports try to get boxes from ships to railcars within three days
, but at Port Metro Vancouver, which handles more containers than all
other Canadian ports combined, only about half the containers make it
out in that time. This year, almost a quarter sat for six days or more.
The port’s problems are typical of the productivity issues confronting
Canada. Facing fierce competition from the United States, Port Metro
Vancouver is in the early stages of a makeover aimed at radically
increasing its efficiency and opening up an important but little-noticed
bottleneck in the Canadian economy. Despite sometimes tense labour
relations at the port, it’s an initiative that both management and
unions say is vital.
“You can’t have a container sitting on the dock for a week if Americans
can get it off in a day or two,” said Mark Keserich, president of
International Longshore and Warehouse Union Local 500. “We’re in
different times. Containers can go through any port. Nobody wants to see
the work go to an American terminal.”
Last year, $75-billion worth of goods crawled through the port. Moving
those goods more quickly would benefit companies across the country,
speeding the delivery of merchandise ranging from electronics to running
shoes, and ensuring that money isn’t tied up in unsold goods in
transit.
An improved port has the potential to kick-start Canada’s productivity
engine, which has stalled in recent years. Canadian productivity has
inched ahead by just 0.7 per cent a year over the past decade, according
to the Organization for Economic Co-operation and Development.
Higher productivity is vital if Canada wants to maintain a high standard
of living and compete against foreign rivals. At Port Metro Vancouver,
which battles for business against U.S. ports in Seattle, Los Angeles
and Long Beach, Calif., the fight against international competitors is
already intense – but until recently no one could even quantify the
port’s problems.
Dale Thulin, a supply-chain consultant, was brought in by the port in
late 2008 to try to tally the situation. He produced his initial report
in spring, 2009, showing for the first time that the port was operating
far below its potential. “Up until that point, there was a lot of
hearsay, but no real hard facts,” Mr. Thulin said.
The roots of the port’s problem are tangled. The terminal operators that
handle containers have a long history of discord with the railways that
move the cargo. Strained labour relations with the longshoremen on the
docks compound the problems.
At the centre of it all is Port Metro Vancouver, born in 2008 out of the
amalgamation of three local port authorities. It is a non-shareholder
corporation overseen by a public and private board of directors, which
ultimately reports to Ottawa’s Minister of Transport. It has little
direct power to order changes and functions more as a referee,
overseeing the various players that use the port.
Robin Silvester, president of the port since April, 2009, wants 90 per
cent of containers moving through the port in three or fewer days, but
he isn’t predicting how quickly that will happen. “I’m loath to commit
to a date, but we’re already seeing substantial improvement,” he said.
One bright sign is the improving relationship between the operators that
unload the containers and the railways that transport them. Flare-ups
were common in the past. If a ship arrived late, an operator might be
reluctant to bring in extra longshoremen or pay overtime to get
containers off a boat in the middle of the night if there was no
assurance that railcars would be available for the containers.
Relations took a major step forward in late July, when Canadian National
Railway Co. signed a deal with the port’s biggest terminal operator,
TSI Terminal Systems Inc., to improve on-time arrival and departure of
CN’s trains, ensure waiting railcars get filled, and reduce so-called
“dwell time,” a measure of how long it takes cargo to move through the
port.
At the heart of the deal is daily sharing of information between CN and
TSI, which handles about 70 per cent of the containers moving through
port. The two exchange reports on containers that are piling up, as well
as available railcars, providing both parties with a near-live picture
of port activity.
“If you see problems sooner, if you can understand that issues are
developing … then all of a sudden you have time to do something
different,” said Claude Mongeau, chief executive officer of CN. “If
you’re only looking at what happened last week, and especially if you
don’t have mutual trust, quickly it becomes finger pointing.”
Thanks to the agreement, the old anger between terminal operators and
railways is fading, said Eric Waltz, president of Global Container
Terminals Canada, which owns TSI. “Right now, the relationship we have
with the railways is as good as I’ve seen it,” Mr. Waltz said.
Labour relations with longshoremen remain a hot issue, though, noted Mr.
Silvester. Current contract talks are being overseen by federal
mediators.
TSI and ILWU Local 500 recently appeared in front of the Canadian Labour
Relations Board over a late request for additional longshoreman by the
terminal operator after a mechanical problem delayed unloading of a
ship. The board found the union left the ship at the dock longer than
needed and ordered it to provide better service.
But Mr. Keserich, president of the local, insisted workers are playing a
key role in the increasing efficiency of the port, saying longshoremen
are setting records by loading more than 30 containers an hour onto
railcars, a 20-per-cent improvement over previous levels, thanks to
faster cranes and the growing practice of grouping containers aboard
ship by final destination, rather than scattering them randomly.
Source: The Globe and Mail
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