Inland Ports Conference Sparks Dialogue

Published originally in BC Shipping News (pg. 42-44), November 2016 Edition

Western Canada’s first Inland Ports Conference was: (i)crucial to Western Canada’s trade related transportation and logistics; (ii) vital to understanding the relationship between insland ports and seaports; (iii) valuable to regional and provincial economic development; (iv) full of unexpected comments. The only correct answer has to be (v) all of the preceding, but participants could be forgiven for additional commentary such as (vi) a long overdue and much-needed discussion; (vii) critical to Canada’s international trade performance; and even (viii) a nation-building event.

Almost to the day, the conference marked the 10th anniversary of the formalization of the Asia-Pacific Gateway and Corridor Initiative (APGCI) in 2006, Over the past decade, much of the national focus has been on the “Gateway” as opposed to the “Corridor” dimension of APGCI, so the dialogue sparked by the converence was most timely as the federal government contemplates the next wave of its $60-billion infrastructure investment commitment.

“We know about the economic impact of the sea ports,” Peter Wallis, President and CEO of the Calgary-based Van Horne Institute, the conference organizers told BC Shipping News. “Canada does have a port and corridor strategy as part of its national transportation policy. Along the corridors, there are some extremely important points – call them inland ports because thats what they are,” Wallis said.

The Corridor

The centres Wallis references have developed in the shadow of a spotlight on Canada’s two West Coast Gateway ports – the Port of Vancouver and the Port of Prince Rupert. The Conference has now shifted the focus to the nodes along the rail and truck routes connecting the inlands to the seaports. These corridor ports compose a network of logistics hugs located at Ashcroft, British Columbia; Edmonton and Calgary, Alberta; Regina, Saskatchewan; and Winnipeg, Manitoba. How the current roles of the inland ports – and more importantly, their potential – can relieve stress and contribute other benefits to the seaports and their adjacent regions was insightfully elaborated through the multiple perspectives of the comparable port regions in Europe and North America. The inaugural conference did not disappoint the 150 attendees mainly representing academe, business and government across Canada’s four western provinces, although the absence of representation from the Government of British Columbia was noticed. Even if inadvertent, the negative symbolism reflects poorly on the idea of distributing the economic benefits of Canada’s seaports to other regions.

“Inland ports themselves are interesting economic generators … there is a list of ancillary business that results from the activities of the various distribution centres,” said Wallis. “Inland ports are extremely important elements in ensuring that the sea ports are as strong, viable, efficient and effective as they can be. A seaport that doesn’t have a direct connection to the major distribution centres that have been set up across western Canada to facilitate the trade flows is not going to be as robust as it can be.”

Kleo Landucci, Vice President of Ashcroft Terminal, Platinum Sponsor of the Conference, told BCSN there was an “infrastructure deficit” for supply chain solutions. These solutions “are not just at the marine ports, and they’re not just at the source where the producer affects the product, or prepares the product for market, but it’s throughout the whole supply chain, and every region is a little bit different,” Landucci said. “So, given the geographic expanse and challenges in Canada, what should we be doing to catch up?”

The answer to that question may have been most succinctly expressed by panelist Mark Szakonyi, Executive Editor of JOC.com, who framed the central issues as: “What’s moving through the supply chains, and what makes sense for the shipper?”

William McKinnon, General Manager for D.B Schenker’s Western Canada region,. offered a freight forwarder’s perspective with a list of solutions beneficial to shippers: design a scalable solution to meet the expanding needs of producers and customers; integrate advanced technology; manage speed to market variables; minimize freight touch points; operate a solution with minimal asset investment; achieve door-to-door service versus individual segments; and assist producers and shippers in opening new markets. McKinnon also identified the need for increased collaboration between producers, shippers, forwarders and the port partners, while James Auld, Senior Manager, Corporate Development at CN, expanded the idea of collaboration even further in his keynote luncheon address, recommending supply chain stakeholders work collaboratively to develop inland markets.

West Coast Seaports

That innovative idea produced the Conference’s most divergent of views from the Port of Prince Rupert (PPR) and the Port of Vancouver (PoV), whose two spokespersons both cited their governing legislation, the Canada Marine Act, although from radically different perspectives.

“I’m personally somewhat frustrated by the fact that our enabling legislation probably limits us…” said PPR President and CEO Don Krusel. “As far as Prince Rupert has evolved, I’m starting to thik of the port as a logistics company. You think a port is all about building the right facilities so the goods flow through the marine environment safely. [But] it would be beneficial for some entity such as the port to have a more formalized role in enabling the cargo to move from origin to destination, and getting more involved – somehow make a logistics company, but we can’t do that currently under the legislation,” Krusel said

“My definition of an inland port would be where cargo clusters. And maybe there are ways of making these clusters, or inland ports, more efficient. The clusters for PPR would be what makes us grow, so we are going to be focused on the inland clusters,” Krusel added.

Peter Xotta, Vice President, Operations and Planning, for the Port of Vancouver, said the federal legislation defined PoV’s primary mandate as a landlord port. “Under the Canada Marine Act, our job is essentially to ensure a process for the movement of goods in a safe and environmentally sound way. We do that principally by drawing private capital into port facilities,” said Xotta.

But Xotta also admitted that the port’s tremendous container growth and the critical shortage of industrial land in the Lower Mainland – the main drivers behind the sustainability of the inland ports – meant that a greater role for the inland ports was on the PoV’s radar. “The issue about protecting industrial land in the Lower Mainland – it’s a key issue in preserving the work we’re doing – but it’s not addressing the value of the land underlying that. The nature of the work that we do in transloading and distribution centres can support a certain cost of land, but beyond that we’re going to see more and more inland facilities being necessary to support the port activity”, Xotta said.

Xotta told BCSN: “We have for a long time been focused primarily on our marine terminal capacity, recognizing that things like urban congestion, roadway issues and increasing land value and scarcity are going to drive change. We see that change as the processes that are going to continue in the Lower Mainland, so we need to continue to be focused on being as efficient as possible, but we will expect to see these inland terminals playing a greater role ion goods movement in the foreseeable future.”

Xotta also gave a hint as to what that means in more concrete terms. Asked from the conference floor how co-operation between PoV and an inland port could be formalized, Xotta replied: “What is evident in each of these jurisdictions is the degree of work that needs to be done by the inland ports themselves – the put forward a co-ordinated value proposition. I question whether there’s a role for the Port in deciding that, or a role for the Port in engaging with each of the inland ports – particularly through other service providers, whether that’s the container terminals, or the companies, or the railway. It’s fairly dynamic: if there’s a structure to be brought to that – that is efficient for all those parties – we’d have to be prepared to participate in that.”

Conclusion

The Van Horne Institute is to be commended for launching this important conference, and the organizers say they plan to make it an annual event. Perhaps one additional component should be added to the future inland ports’ agenda. As a network of logistics and transportation hubs, the ports can also gain a collective operational benefit connecting through a technology platform known as a Port Community System.

A timely report, The Infrastructure That Matters most, produced in June 2016 by the Canadian Chamber of Commerce in co-operation with the Canada West Foundation, notes that since 2009, Canada has dropped from 10th to 23rd in the World Economic Forum’s Competitiveness Index for the Quality of Overall Infrastructure. It’s author, John Law, formerly CEO of Regina’s Global Transportation Hub and a senior official with the Saskatchewan government, argues for making trade-related infrastructure investment an equal priority in the federal government’s new infrastructure spending over the next 10 years. The report notes that trade-related infrastructure “delivers long-term benefits by facilitating the transportation of goods and services more quickly, reliably and at lower cost.” To this end, it calls on the federal government to “renew its commitment to Canada’s trader corridors.”

Law told BCSN shortly before the Inland Ports Conference that the federal government’s “three infrastructure investment buckets” (Green, Social, Transit) have a lot to recommend them, “but without a trade and transportation bucket, I think we’ve left something really important out. When you look at supply chains you have to look at them end to end – and the context for the role of the inland port is about the inter-connectedness of the supply chains.”

Click here and go to page 42 of BC Shipping News to read the full November 2016 article.