Port Metro Vancouver (PMV) container terminals will be working on their night moves as of July 2.
The question is: who in the local goods transportation system is going to join them? Unless the majority embrace those moves, which involve extending container pickup and drop-off times to 1 a.m. Monday to Friday, the anticipated gains in Asia-Pacific Gateway cargo movement efficiency and reduced road and port congestion won't be delivered.
Extending container terminals hours will also do little to address overcapacity in Metro Vancouver's independent trucking sector. That issue was underscored again recently when the provincial government launched a whistleblower service to allow container truckers to lodge complaints over trucking companies failing to comply with pay rates and other requirements agreed to in the 15-point Joint Action Plan that ended the 28-day truckers' strike earlier this year.
With competition in the global container trade ramping up along North America's west coast and elsewhere around the world, increasing terminal efficiency and productivity is critical to retaining and expanding container traffic.
In May, TSI Terminal Systems Inc. and DP World (Canada) Inc. announced plans to add night gate openings at their Port Metro Vancouver container terminals. TSI, a subsidiary of GCT Global Container Terminals Inc., operates PMV's Deltaport and Vanterm container terminals and handles more than 75% of the containers shipped through the port. Dubai-based DP World runs Vancouver's Centerm terminal, which handles around 20% of PMV's container volume.
Container traffic through Port Metro Vancouver, North America's fifth-largest container port, is projected to more than double over the next 10 to 15 years.
But the night gate initiative requires more than terminals working later, and it's not the first time later working hours have been instituted at PMV container terminals. Everyone from trucking companies, freight forwarders and cargo transloading facilities to shippers, receivers and representatives of ocean carriers need to be available later or there will be limited goods-movement gains from extending terminal operating hours.
Much of Metro Vancouver's goods transportation system is based on a standard day shift. So, as BC Trucking Association president and CEO Louise Yako pointed out, many parts of that system don't run at night.
“For this to work, everyone needs to be open, or at least a large enough proportion that it allows enough volume to move at night.”
A 2013 Drayage Owner-Operators report agrees, but notes that only a few Metro Vancouver warehouses and off-dock facilities are open after 5 p.m.: “many off-dock facilities are too small to be open at night, leaving nowhere for a drayage operator to hold the container overnight.”
The report adds that “there is no compensation for overnight storage or for the additional unpaid trip to transport it the next day. Some containers hold valuable cargoes and must be secured; they cannot be left on the street.”
And as BC Maritime Employers Association boss Andy Smith pointed out earlier this year, “The local trucking industry is highly averse to working anything other than day shift; it's quite peculiar.”
Added costs and complications of the night gate initiative have raised concerns elsewhere along the logistics chain.
Ruth Snowden, Canadian International Freight Forwarders Association (CIFFA) executive director, said her organization, which represents everything from small local Canadian operators to major multinational freight forwarding companies, said night gates could open up access to more terminal gates for more freight forwarding companies.
But she pointed out that the night gate program reduces the grace period around trucker terminal reservations and will add costs to use regular day gates.
“The administration of dispatching and getting reservations – which is already very time-consuming, frustrating and expensive for freight forwarders and trucking companies – will not become easier or less expensive.”
In addition to the day gate reservation fee, she said, there will be costs from arranging overnight secure storage if transloading facilities aren't open and higher drayage fees if a driver has to make two runs – one to retrieve the container in the evening and another to deliver it to the importer the next morning.
“All of these combined could easily add up to more than $100 additional per container – on top of the new drayage fees arising from the [15-point] Joint Action Plan. Vancouver is already a very expensive port for Canada's importers, and these additional changes will add even more expense.”
That expense has convinced some companies to pursue alternative shipping methods.
In “Sea change is coming in international container trade” (BIV issue 1281; May 20–26), Ian May, Western Canadian Shippers' Coalition (WCSC) chairman, said costs from the 15-point plan will price container truckers out of the market for many of his coalition's members.
He said those companies, which use containers primarily to export wood products to Asia, continue to explore other shipping options, including using Prince Rupert, rail, break bulk and barges.
When asked what percentage of his coalition's membership is exploring those options, May said simply: “100.”
He estimated that in the short term approximately 20% of the export containers WCSC members now move by truck will be shipped via alternative methods.
May pointed to some basic math in the current container trucker situation: “there are too many trucks in the system.”
“You are probably looking at 700 too many licences, [so] no matter how much you pay per leg there are just too many trucks to get enough revenue … for one individual trucker to make a living.”
He added that the WCSC has previously organized night gate openings with TSI and off-dock facilities like Richmond's Coast2000 when shipping volumes justified them.
It's also not the first go-round for Vancouver port night gates. In 2005, the Vancouver Port Authority announced plans for its Extended Gates Program to increase annual container truck traffic by an average of 20% over five years.
The program was initiated in January 2006. In 2007, Vanterm and Deltaport offered night gates to 11 p.m. during the week. But the 2008 recession hit transpacific container traffic hard, and Vancouver terminals eventually eliminated their night gates.
However, terminal operators say marketplace factors are different today. DP World general manager Maksim Mihic said that when shipping volumes dropped during the recession there was no financial incentive for terminals to distribute that volume across 16 hours.
“[But] with the current volume and annual container growth of about 4%, we are approaching design capacity of the container terminals in Vancouver. Terminals are designed to operate 24-7, 365 days a year. Keeping gates open 8 a.m. to 4:30 p.m., Monday to Friday, is not working anymore.”
Mihic added that vehicle booking systems were in their infancy in 2006, and the “appointment concept was new, loosely managed and therefore inefficient.”
He also pointed to the addition of fees for using terminal gates during the day and reduced congestion at night as other incentives for shippers to use night gates.
Traffic congestion is becoming increasingly expensive for North American ports.
According to a March Journal of Commerce report, congestion at U.S. container terminals costs the port, shipping and trucking industry US$350 million per year. Main contributors to that congestion include ocean carriers using larger container ships that take longer to unload and longshore labour disputes over such issues as port automation.
Other major North American ports have long used night gates to try to reduce congestion.
The Port of Long Beach's (POLB) PierPass program of night gate openings to 3 a.m. began in 2005.
Its traffic mitigation fee, charged to cargo owners moving containers during peak daytime hours, was initially US$20 per TEU (20-foot equivalent unit). In August, it will be US$66.50 per TEU.
The daytime reservation fee for Port Metro Vancouver terminals has initially been set at $50, 30% to 50% of which will be subsidized by the terminals.
According to POLB assistant director of communications Art Wong, prior to the 2005 introduction of the PierPass night gates program, under 10% of containers were trucked at night. That percentage is now approximately 50.
PierPass president and CEO Bruce Wargo said Long Beach-L.A. night gates have helped reduce terminal traffic congestion.
“If I were to suggest anything [to address port traffic congestion] it would be that.”
