Labour, reliability and the creation of a national transportation strategy have topped the list of challenges at Port Metro Vancouver as it closes out 2010.
Last week, port president and CEO Robin Silvester touched on each of those issues at a Vancouver Board of Trade luncheon at the Hyatt Regency hotel downtown.
More generally, he said collaboration is key to driving change and growth on B.C.’s waterfront, but Silvester also emphasized the need for the federal government to be more active in labour negotiations that have stretched into their 12th month (see “Wharf operators seek bargaining changes to secure labour stability” – issue 1082, July 20-26).
On the sidelines of the luncheon, Business in Vancouver asked Silvester what he’s focused on as the port sails toward a new year.
The reliability issue is one where we do need the employers, the federal government and the union to work together to find a solution. We’ve had a long history of negotiations in the [Asia Pacific] Gateway that, in reality, have not delivered a solution. We still have the threat of disruption, our customers are still worried about the threat of disruption and that damages the ability of the Gateway to deliver on the economic potential of its investments.
The answer lies with Ottawa getting involved, and we are seeing that to some extent, which is positive. Through the current 12-month negotiation process we’ve seen a lot of attention from the federal government. The long-term solution has to come from federal government involvement.
This would be part of it, but I think a national transportation strategy really needs to have a couple of elements. You can think of it almost as the hardware and the software. The hardware is the infrastructure, and we’re spending billions of dollars developing infrastructure. We’re doing that through the Gateway in a really well- planned way, but I think there is an opportunity to build a clearer national strategy on how we most effectively create the infrastructure that will serve Canada best in the long run. The software part is then how we make sure the system uses that infrastructure most appropriately, whether it’s through labour and reliability, whether its through wider supply chain operations and efficiencies.
Part of it is just around collaborating, working together with the infrastructure we have because, fundamentally, the port is not running above capacity at the moment. I’ve certainly had break-bulk exporters and forest products experts complaining that they can’t get containers to export products. The reason for that is that the container volumes went down so hard [during the recession] container factories in China stopped making containers. But trade came back so quickly that the industry has been caught out and has been going through this frictional adjustment process. I think it’s a short-term issue that will resolve. It’s also partly commercial. We have a lot of empty containers going back to Asia to refuel on the import leg. It’s good because there’s empty capacity in Vancouver, but commercially when they can bring import loads in at $2,800 a load they want to rush the containers back empty because they’re not getting enough revenue on the back haul to justify holding the container on the dock to get it filled. So there’s a bit of commercial equilibrium that needs to re-establish and we’re already starting to see that.
In 2011, we’re expecting growth in all of our major cargo sectors, whether it’s growth starting to return in the cruise business, continuing growth in coal or growth in container trade. So we’re looking at 2011 being a much more normal year where we see a continuing recovery.