Freight demand dramatically outpacing western capacity: WESTAC study

VANCOUVER — West Coast capacity won’t be able to keep up with skyrocketing trade as container throughput at Lower Mainland B.C. ports is expected to nearly triple in the next decade while break bulk could double.

So says a new report released this week by the Western Transportation Advisory Council, a non-profit group of business, labour and government leaders focused on the western Canadian economy and transportation system. The report — titled Preparing for Success: Forecasting Surface Freight Demand — draws from shippers and importers that rely upon the freight transportation. It details findings in containerized freight and in six commodity groups: coal, forest products, grains, fertilizers and potash, sulphur and chemicals.

The study was borne out of concerns in 2004 that the transportation industry on the west coast had “been lulled by a long period of excess capacity.” And then suddenly “huge volumes of containerized goods arrived on western shores from across the Pacific, while at the same time hungry foreign demand of raw materials and commodity stressed Canada’s export systems.”

There are several challenges standing in the way
of ramping up capacity at west coast terminals

Container movement is forecasted to grow from 1.86 million TEUs (twenty-foot equivalent units) in 2004 to 5.41 million in 2015, an average annual growth rate of 10.2 percent. Virtually all of the current container movements enter the region through four container terminals in Vancouver’s Lower Mainland, according to the report. By 2008, capacity at these terminals plus a new one current being built in Prince Rupert will be 3.79 million TEUs. Predicted throughput demand in 2010 is 3.55 million TEUs rising to over half a billion by 2015.

Currently, the west coast handles 48.5 percent of the commodities forecast, dominated by coal, grains and forest products, and this is expected to grow to 53.5 percent over the forecast period. In comparison, the eastbound system handles 24.5 percent of the region’s commodities, dominated by forest products.

“Shippers say the degree of use of containers will be determined by rates, service and availability of containers, and good connecting infrastructure between mills and ports,” the reports states.

There are several challenges in ramping capacity at west coast terminals over the next few years. Road infrastructure and feeder routes leading to the ports — especially tight roads from the mountains to the coast — needs to be vastly expanded, the report urges. Furthermore, additional train slots for both commodities and containers will be needed very soon.

“Some can be added on an incremental basis through co-production and other operational changes,” states the report. “The prospect of resurging bulk traffic on top of even higher container traffic raises concerns about the adequacy of rail capacity on some corridors.”

Fred Green, the new president and CEO Canadian Pacific Railway, said this week his company has boosted capacity by 12 percent this year and expects that number to climb in the near future. He predicted up to eight percent growth in 2006 for the railway, largely based on the $160-million track expansion completed last year. The project increases train capacity on the railway’s network between the Prairies and the Port of Vancouver, and includes a new 8,500- foot-long track at CPR’s Coquitlam yard near Vancouver.

The report continues by suggesting more land for transportation purposes — be it for rail, highways, or expanded port facilities — needs to be secured. And break-bulk facilities are essential for those markets and products that cannot utilize containers. “Areas such as Vancouver’s False Creek Flats will be needed to support rail operations and marine container terminal growth,” the report states.

Meanwhile, business stakeholders and government needs to step-up in expediting border-crossing systems “in light of the significant cross-border trade with the U.S., and particularly impacting the very large volume of Canadian trade moved by truck.”

The WESTAC report calls for further investment in equipment and infrastructure such as rail sidings, locomotives, roads and bridges, distribution centres, terminal berths and cranes, technologies to manage traffic and track flows, and new testing other routes, modes, and practices such as longer trains, balancing freight flows over directions, and experimenting with expanded operational hours in the days of the week.

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