(The following story by Brent Jang appeared on the Globe and Mail website on June 10.)
TORONTO — The world’s ports are bursting at the seams because of booming Asian trade, spurring plans for massive expansion, and Canada’s West Coast stands to benefit, a study has found.
Containers filled with consumer goods from China are pouring into North America, putting pressure on West Coast ports from Vancouver to Mexico, said the report released yesterday by UBS Securities LLC.
Business is so brisk along North America’s West Coast that ports spend much of their energy just keeping up with the wave of containers arriving, said the study, whose co-authors include UBS analysts Fadi Chamoun in Toronto and Rick Paterson in New York. “There is a fine line between busy and congested,” the report read.
While traffic jams have hit all major ports, the Los Angeles-Long Beach region has been especially congested, forcing Asian exporters to look elsewhere. At one point last year, more than 90 ships off Los Angeles were kept waiting for a berth.
Some container shippers in Asia have opted to go through the Panama Canal to deliver goods to East Coast terminals, “but ultimately, there is no escaping West Coast ports,” the authors wrote.
That means that Vancouver and Prince Rupert in British Columbia are well positioned to benefit.
“We expect alternative ports, particularly northern ports, to increasingly become first ports of call,” the UBS report said.
“We believe some additional freight will head east, but we think this has somewhat limited potential.”
New projects on the horizon include the Port of Prince Rupert’s construction of a container terminal, to be completed by early 2007, and a multiyear expansion at Lazaro Cardinas in Mexico.
Industry Minister David Emerson said Canada is doing all it can to meet demand for port services, but acknowledged more should have been done earlier to boost capacity. “I think we’re doing enough.”
Compared with last year’s bottlenecks, this year’s flow of goods should be smoother than last year’s, as terminal operators, trucking firms and railways have added thousands of workers and expanded infrastructure, the study noted.
“If significant congestion is to occur again this year, it could start with the truckers,” the authors wrote in the report, referring to a driver shortage.
The UBS analysts also said the trend toward ever-larger container ships won’t necessarily reduce congestion, as too many arrive at once.
(With files from reporter Simon Tuck.)