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June 11 2018

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4 The Journal of Commerce | June 11 2018 www.joc.com Mark Szakonyi THE STRONG CONTAINER volume flowing through ports from Vancou- ver to Halifax brings new challenges requiring infrastructure investment, innovation, and the Canadian empha- sis on collaboration. Over the last seven months, Canadian shippers and forwarders got a taste of what hap- pens when that formula falls short. Harsh winter weather and a surge of imports, both for domestic and US markets, flowing through Canada in the peak season caused delays at the ports of Prince Rupert, Montreal, and Vancouver. Western ports have since returned to normal rail fluidity, while truck turn times on average at Mont- real have fallen below one hour. Les- sons were learned. Stakeholders at the ports of Prince Rupert and Vancouver are investing to prevent a repeat peak-season performance; Montreal's marine terminals are collaborating on a pilot program extending truck gates. The pressure isn't letting up. Canadian container volume rose 7 per cent last year, and Maersk expects growth to at least equal to that this year. US container volume, by com- parison, will rise 2 to 4 percent, as the market grapples with a "trucking crisis," rail infrastructure needing improvement, and a lack of terminal competitiveness when compared to other advanced markets, according to Omar Shamsie, president of Maersk Line North America. "Meanwhile, the outlook is more positive for Canada, which promises to be one of the fastest-growing mar- kets in terms of container trade across the Americas this year," he said. It's going to be a close race with Mexico. To handle the short- and longer- term growth, the ports of Vancouver and Montreal are expanding terminal and rail capacity, while Prince Rupert is fresh off a project that added 500,000 TEU of annual capacity. Meanwhile, Canadian National Rail- way is investing hundreds of millions of dollars to build capacity and add daily trains from the west coast to Toronto and Chicago. But questions remain about not only where capacity is needed, but whether environmental regulators will allow it to come on line. The best example of the latter is in Vancouver, where the port authority's proposed Roberts Bank Terminal 2 Project has been deemed potentially harmful to western sandpipers by Environment and Climate Change Canada, as re- ported by The Financial Post. "Without Terminal 2, Canada will run out of capacity on the west coast. There is nothing else anywhere in the planning and permitting process that could deliver capacity for demand by the mid 2020s," Port of Vancouver President and CEO Robin Silvester told the local newspaper. The port of Quebec's plan to build a container terminal has sparked debate on the feasibility of the project and other greenfield proposals aimed at adding more mega-ship handling capacity to eastern Canada (Special Report on Canada, page 17). Montre- al, Canada's second-largest port after Vancouver, can only handle ships up to $5,000 TEU. That, however, hasn't stopped Maersk from adding a trans-Atlantic service to Montreal and Halifax. The carrier has high expectations for Canada-Europe trade as a result of the Comprehensive Eco- nomic and Trade Agreement (CETA). Unlike the US, Canada has a dedicated freight fund of C$2 billion to support infrastructure projects, and that will help, but only the most-needed projects will be able to fill the gaps by attracting private investment. In addition to the National Trade Corridors Fund, the Canada Infrastructure Bank plans to invest at least C$5 billon on projects supporting trade and transportation. It's going to take more than money; it's also going to take new collaborative approaches. Innovation can come in many forms. Global Container Terminals (GCT) Canada is launching its six-month pilot project at its Vanterm and Deltaport termi- nals that reduces the $50 flat fee for making daytime appointments to a flat fee of $35 on all appointments, both day and night. That's an effort to head off driver dissent that led to a crippling portwide strike in 2005 and 2014. The port authority, government ministries, and the container trucking industry have separately agreed to raise driver rates 2.6 percent. Technology is driving much of the innovation. Vancouver is using GPS-tracked trucks and transmis- sions from rail track readers to better identify rail and road bottlenecks, prioritize infrastructure projects, and optimize existing operations. At Montreal, efforts are under way to implement predictive analytics to provide predicted truck turn times to drivers and dispatchers. The port also is working to enhance its trucking app, showing turn times at terminals in real-time, to give advance notice of rail shunts so drivers can plan ahead. Cargo M — a group of federal, provincial, and municipal leaders, the port authority, supply chain partners, shippers, and industry associations — supporting the Montreal effort is an example of the collaboration needed throughout Canada, said Logistec CEO and President Made- leine Paquin, and vice chairman of the group. Paquin, who will deliver the keynote address on June 20 at the Canada Trade Conference in Toronto, said the Canadian logistics industry is moving in the right direction, with a greater willingness to improve visibility, create metrics, and team up to boost gateway fluidity. "We need even more collabo- ration going forward," Paquin said. "This would include collaboration on strategic infrastructure investment, technology introduction, environ- mental efforts and most of all on tal- ent from the education to workforce development. Canada's competitive- ness depends on it." JOC email: mark.szakonyi@ihsmarkit.com twitter: @szakonyi_joc Canada's moment The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, June 11, 2018, Volume 19, Issue No. 12. The Journal of Commerce is published bi-weekly except the last week in December (printed 25 times per year) by JOC Group Inc., 450 West 33rd St., 5th Floor, New York, N.Y. 10001. Subscription price: $595 a year. Periodicals postage paid at New York, N.Y., and additional mailing offices. © All rights reserved. No portion of this publication may be copied or reprinted without written permission from the publisher. POSTMASTER: Please send address changes to The Journal of Commerce, Subscription Services Department, 450 West 33rd St., 5th Floor, New York, N.Y. 10001. 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