Reduced Traffic Through the Port of Vancouver
A softened global economy, the weakened Canadian dollar, and some containerized cargo shifting back to United States ports following an extended labor disruption on the west coast last year are primary factors contributing to lighter than usual traffic through the Port of Vancouver, according to the port authority’s 2016 mid-year statistics report.
Despite the short-term slow down, forecasts show that long-term growth in trade will continue to bolster the Canadian economy.
Total cargo for the half-year ending June 30, 2016 was 66 million metric tons, an overall decrease of 5.9 percent over the same period in 2015. These results represent a softening of volumes in all major commodities except grain, where increases in barley (up 41.8 percent) and canola (up 40.1 percent) contributed to overall growth in that sector.
“The slight decrease in cargo volumes in the first half of 2016 was expected, given the record year we experienced in 2015 and the softening global economy,” said Robin Silvester, President and CEO of the Vancouver Fraser Port Authority. “The long-term outlook for Canadian trade is one of growth, and the port will be ready to handle increased volumes through Canada’s west coast.”
In the bulk sector, more grain is being exported overseas to new markets resulting in an increase of 4.8 percent over record 2015 volumes. Supported by a bumper harvest and strong overseas demand, Canadian bulk grain exports through the Port of Vancouver have had back-to-back record years in 2014 and 2015.
Reduced investment due to a slowdown of industrial activity in western Canada, along with the weakened Canadian dollar, led to an 11.7 percent decrease in volumes of machinery, vehicles and construction materials moved through the Port of Vancouver. Other resource-based decreases include a 38.7 percent drop in exports of power-generating thermal coal to key Asian markets. However, metallurgical coal, which made up approximately three-quarters of total coal volumes, saw a much smaller decrease of only 4.1 percent.
In the container sector, volumes weakened in the first half of 2016 compared to last year, when the port experienced a temporary surge of cargo in 2015 as shippers chose to move freight through Canada due to labor disruptions at U.S. west coast ports. Between January and June 2016, 1.4 million container TEUs moved through the Port of Vancouver, representing a decrease of 6.5 percent from the same period in the record-breaking 2015 year. Compared to 2014, 2016 volume is up 1.3 percent.
Changes in Canadian consumer behavior in the first half of this year, in part as a result of weaker purchasing power due to the reduced value of the Canadian dollar, led to a 2.5-percent decline in containerized imports of consumer and related goods, most notably household goods.
Ocean Shipping Consultants, a U.K.-based economic consultancy, recently completed an independent forecast of container traffic through the west coast of Canada that considers emerging global economic trends and data. The report predicts growth in containers from 2016 to 2030 at four percent annually. At that rate, the Port of Vancouver will need to create additional terminal capacity by the mid-2020s.
The Vancouver Fraser Port Authority and terminals within the Port of Vancouver continue to invest in infrastructure and technology to increase capacity in anticipation of growth. In addition to improvements to maximize the use of existing container terminals, the port authority is proposing to build a new terminal at Roberts Bank, a project now being reviewed by an independent review panel appointed by the Federal Minister of Environment and Climate Change.
“Shippers continue to express confidence in the Port of Vancouver,” said Silvester, “and we continue to see significant investment projects moving forward in the gateway.”