The Port of Vancouver initially launched the EcoAction program in 2007. The goal of the program is to reduce ship emissions by providing discounts “on harbour dues to vessels meeting voluntary environmental best practices that reduce emissions, underwater noise and other environmental impacts.” In rewarding vessels that have equipment and technology on board that promotes beneficial environmental practices, the hope is that overtime vessels and vessel owners will continue to strive to reduce their environmental emissions.

Prior to arriving into Port, a vessel’s agent will obtain relevant supporting documentation directly from the vessel including: cleaner fuel category, energy efficiency design index certification, international energy efficiency certificate, environmental ship index, right ship index, clean shipping index, green marine index, shore power capabilities, vapor control recovery systems, underwater noise reduction systems or ship classification notations. Once the relevant documentation is received, the agent will submit the application on the vessel’s behalf to the Port of Vancouver through their online portal.

Once submitted, the application is reviewed by the Harbour Master’s office. If certain criteria are met (see below link for further information on relevant criteria), the vessel will be awarded either a gold, silver, or bronze rating. Each rating coincides with a discount on the vessel’s harbour dues (which are paid by the agent on behalf of the operator). For a gold rating there is a 47% discount, for silver a 35% discount, and bronze ratings receive a 23% discount. Harbour dues are calculated by the vessel’s gross registered tonnage multiplied by a base rate of $0.094. When applicable, the discount reduces the base rate of a given vessel. As you can imagine, for vessels that call Vancouver continuously, it can be quite advantageous for owners to invest in these emission reducing technologies.

For more information on the EcoAction program, please see this brochure from the Port of Vancouver.

The Vancouver Fraser Port Authority has released their mid-year cargo statistics report for 2019 which shows growth in the dry bulk and container sectors in the Port of Vancouver. Wheat exports were observed to be 22.4% greater than June of last year while Canola is down 12.6%. Overall, total foreign vessel calls to the Port are on pace (currently -0.1%) with laden outbound vessels growing to 5.2% larger. The Port of Vancouver released the following recap as a supplement to the statistics report –

“The Vancouver Fraser Port Authority today released the 2019 mid-year cargo statistics for goods and passengers moving through the Port of Vancouver. Between January 1 and June 30, 2019, overall cargo through the port increased 0.5% to a record 72.5 million metric tonnes (MMT) over the same time last year, with new mid-year records in containers, potash, grain and cruise passengers.

“This year’s record mid-year cargo volumes reflect what continues to be two of the Port of Vancouver’s greatest strengths—its broad global reach and ability to accommodate the most diversified range of cargo of any port in North America,” said Robin Silvester, president and chief executive officer of the Vancouver Fraser Port Authority. “While Canada is certainly not exempt from the challenges impacting global trade, the diverse range of trading partners and cargo handled through the Port of Vancouver ensures the entire port remains resilient, despite variations in any one sector or commodity.”

Strong global demand for Canadian grain resulted in a new mid-year record of 14.8 MMT (both containerized and bulk volumes). Increases in wheat, up 22.4%, and specialty crops, up 34.2%, more than off-set the 12.6% decrease in canola exports at mid-year, which was largely due to a 49.1% per cent decrease in canola exports to China in the first and second quarters of 2019. In fertilizers, potash exports increased 27.3% to record volumes of 5.5 MMT.

Shipping container quantities (measured by TEUs or 20-foot equivalents) also reached a new mid-year record of 1.7 million TEUs, an increase of 3.5% compared to mid-year container quantities in 2018.

In Vancouver, containers arrive filled with electronics, food, clothing and other consumer goods. They leave loaded with Canadian agri products, local wine and craft beer, B.C. forest products and lumber, among other goods. Container trade through the Port of Vancouver is essential for Canadian businesses to gain access to international markets. Approximately $1 in $3 of Canada’s trade in goods beyond North America move through the port, with a significant portion of these goods moving in containers.

However, independent forecasts show that Canadian west coast container ports will be full by as early as the mid-2020s and therefore unable to accommodate growing trade, which will have far reaching consequences to the Canadian economy. In preparation for growth in trade shipped in containers, the port authority has partnered with terminal operators to expand and improve existing operations as well as government and stakeholders to invest in road and rail projects to support a more fluid supply chain.

“As Canada’s international trade continues to grow, it is our job as a Canada Port Authority to make sure the port is ready to handle the increasing trade volumes through Canada’s west coast,” continued Silvester.

However, even with the additional capacity provided by improvements to existing terminals and infrastructure, it won’t be enough to manage Canada’s future container trade demand, highlighting the urgent need for the port authority’s proposed Roberts Bank Terminal 2 Project. The proposed container terminal project would help realize our nation’s trade potential by providing the marine terminal capacity needed to meet Canada’s trade ambitions with Asian economies.

The Port of Vancouver welcomed a record number of cruise passengers so far this season, with a 15.1% increase over mid-year 2018 as demand for cruises to Alaska from Vancouver continues to increase.

Auto sector volumes are down 4.0%, resulting mostly by lower Canadian sales.

“This year’s mid-year success is a result of the continued support of port terminal operators, marine carriers, rail and trucking companies, government and all those who make up the Port of Vancouver. Through their continued investments and commitments to capitalize on Canada’s expanding trade opportunities, the Port of Vancouver is well-positioned to continue supporting Canada’s growing trade,” added Silvester.”

The full statistics report can be found here.

Australia’s hardships may continue beyond the end of 2019 as the country is in the midst of its worst drought in 116 years. After experiencing extreme dry conditions throughout significant parts of the 2018-2019 crop growing season, Australia found itself in the rare position of having to import Canadian grain. The prolonged dry spell that has plagued Australia over the past year has had significant impacts on the country’s ability to produce and export their products to international markets. In turn, Australia’s wheat exports dipped by about 45% compared to the record setting 2016-2017 year. With no end in sight, Australian imports of Canadian grain is expected to approach 350,000 metric tonnes throughout 2019-2020. If reached, this quantity would surpass the previous years import total by about 100,000 metric tonnes.

According to the Australian Government Department of Agriculture, the current grain importing situation is described as follows –

“Businesses have historically sought to import bulk grain for a variety of commercial reasons. This includes supplementing short supplies of domestic grain during drought periods. The last time grain was imported was in 2007. Canola was imported from Canada, soybean from Brazil and sunflower from Argentina.

With drought affecting large portions of grain growing areas of eastern Australia, businesses are seeking to import certain classes of bulk grain from overseas. This grain is then processed into stockfeed and milling products.

As of 26 August 2019, we have received 14 applications to import bulk grain from the USA and Canada. The applications cover canola, wheat, corn, and sorghum.

Six permits have been issued for imports of bulk wheat from Canada. The other applications are in varying stages of assessment.”

Import permits are granted on a case-by-case basis, the potential risks towards Australia’s biosecurity are carefully scrutinized. For this reason and the cost of having an entire supply-chain approved are likely the major reasons why Canada is one of the only countries currently permitted to export grain to Australia. While the Department of Agriculture acknowledges that imported grain is not a zero-risk situation, they consider the “biosecurity risks associated with bulk wheat sourced from the Canadian Prairies for processing can be effectively managed in accordance with the risk management measure[s].” At this time, additional preventative measures have not been implemented like those that are required for fertilizer imports. The requirements, which are “designed to reduce quarantine contaminants in the fertiliser pathway and supply chain,” include “Inspections must be carried out during daylight hours only with hatches open and with the use of man-lifts (where applicable) to enable proper access to all areas of holds” and with strict hold inspections. Although it is unclear if further requirements will be administered for grain at this time, it seems unlikely due to the stringent protocols and training of the Canadian Food Inspection Agency.

Earlier this month, both of Canada’s largest railways – Canadian National and Canadian Pacific released their Grain Plan for 2019 – 2020. As per section 151.01 of the Canada Transportation Act (CTA), railway companies are required to submit a report for their respective grain plan for the upcoming crop year. The following clause was incorporated into the CTA through Bill C-49 as a transparency measure “designed to foster a competitive and efficient freight system.”

151.01 (1) Before the beginning of every crop year, a prescribed railway company shall provide to the Minister a report, in the form and manner that may be specified by the Minister, that

          (a) assesses the prescribed railway company’s ability to move the grain that it is required to move during the crop year                taking into account the total volume of grain expected to be moved for the crop year; and

          (b) identifies the steps that the prescribed railway company is taking to enable it to move the grain that it is required to                move during the crop year.

Canadian National Railway’s plan can be found here. In it is a summary of the 2018-2019 which outlines the weather-related issues the railway faced throughout the year. Despite the challenges, CN reported moving over 27.5 MMT of grain products, and all-time record for the company. Looking forward, CN relies heavily on the “government estimates to determine crop size along with forecasted demand from our customers.” CN expects 2019-2020 numbers to be similar to the previous 3-year average. This estimate would put their share of grain products between 25 to 27 mmt. By purchasing 1,000 new grain hoppers, increasing network capacity, delivery of new locomotives, and a $3.9 billion investment in rail infrastructure, the railway is hopeful to meet the commitment to the expected grain needs of 2020.

Similarly, Canadian Pacific Railway’s report (which can be found here) reflects on the record setting 2018-2019 year. Within that year, CP moved approximately 25 mmt of grain products despite facing challenging weather and complex international trade relations. In addition to looking at government estimates for the upcoming crop year, forecasting customer inputs along with analyzing historical averages were all integral in determining the next stages of planning. CP hopes to reach their forecasted 31.2 mmt for the 2019-2020 year by continuing to grow their operating crews, adding 170 modernized locomotives, increasing total number of hopper cars and through multiple capital enhancement projects.

In planning for the upcoming year, the railways will look to address several concerns including the stresses put on the rail system during the grain harvest season, closure of the Great Lakes – St. Lawrence Seaway and the severity of winter weather in some target areas. In addition, the non-availability of inclement weather loading systems adds additional stresses on the rail network of both Canadian Pacific and Canadian National. At this point, it is unclear when the situation will be resolved, however, without the ability to load through the rain the turn around time for these cars is delayed which has further consequences on the rest of the system.

Neptune Bulk Terminals has been in the process of undergoing terminal upgrades and modifications specifically to berth #1. Their initial project permit, which was submitted to the Vancouver Fraser Port Authority in 2013 was modified in 2018 to include the following revisions: “redesign of the west quadrant shiploader and include a new upland pivot point and in-water quadrant rail, new berthing moorings and dolphins, and a stern vessel gangway. A total of 72 new in-water steel piles will be installed, rather than the 4 steel piles previously authorized.” Once completed, the upgrades will facilitate loading operations on larger cape-size vessels by reducing potential operational delays.

Regarding the enhanced ship-loader; proposed improvements include a new location which will be north-west of its current position. This location provides a ‘pivot-point’ which facilitates better access to the holds of larger vessel. The goal is to reduce the number of warping procedures alongside the berth and ultimately improve loading efficiency. The ship loader will be delivered to the terminal via barge completely assembled.

Additionally, the terminal will be constructing a new gangway platform, new dolphins and a new quadrant beam. These infrastructure improvements, which are well underway, will expedite the coal loading operations of all vessels calling berth #1 including larger cape-sized. If the project remains on schedule, work is expected to complete in February of 2021.

For further details, please visit the terminal’s construction updates page on their website.

The Port of Churchill witnessed rail shipments of grain for the first time since 2015. The Port, however, is no stranger to the grain shipping industry. Completed in 1929, the Hudson Bay Railroad facilitated bulk grain shipments by connecting Winnipeg with Churchill and started moving grain in 1931. Located on the North-East coast of Manitoba, the Port is North America’s only deep-water Arctic Port.

The terminal operated successfully over the years owned and operated by the Canadian Federal Government. In 1997 the Port was sold to OmniTRAX which took over the operations as a private entity. Cargo operations continued up until 2016 when the Canadian Wheat Board (Government of Canada operated marketing/producing system) was ended. Between 2015 and 2016, the terminal’s final year of operation, approximately 182,000 metric tonnes of cargo was shipped. The newest operators of the Port of Churchill – the Arctic Group, is made up of consortium of groups including Fairfax Financial Holdings Ltd., AGT Foods and indigenous groups.

Thanks to the terminal’s optimal location in the Arctic waters of Hudson Bay, shipping time to select disports in Europe and the Middle East will be reduced. Shipping operations will be seasonal due to ice accumulation with the terminal likely running through late Spring to the end of October – early November.  According to this article from the Financial Post, the terminal’s main grain commodities will be “durum, wheat, canola and lentil and pea crops from Manitoba and Saskatchewan for shipment to Europe, North African and the Middle East.” In the future, the Port’s operators are hopeful to expand operations to other commodities including forestry products, concentrates and fertilizers.

An agreement has been reached regarding the possible ways to expand and improve the ECHO program voluntary slowdown. One of the issues surrounding the program’s expansion, which included boundary pass for the 1^st time this year, is reducing the cost implications for the owners. Due to the nature of the pilotage billing system, costs significantly increase the longer the transit time. The memo from Transport Canada (see below) does an excellent job in explaining the system and the restraints that come with it. When a vessel is transiting between Victoria Pilot Station and Vancouver Harbour (Inner Anchorages or any of the terminals) transit time is usually around 8 hours. When the slowdown program is running, the probability of going over 8 hours increases which can double pilotage rates. As you can imagine, the additional costs can impede an owner’s decision about whether to participate.

When additional costs are incurred, the Pacific Pilotage Authority will calculate the difference between the estimated total cost had the vessel not participated and the final invoice. The difference between the 2 totals will then be reimbursed to the billing party which is typically the agent. Transport Canada anticipates that this reimbursement will take approximately 22 to 50 days after the final invoice has been received by the billing party. The goal of this program is to increase participation in the vessel slowdown as authorities have deemed it to be a success thus far. By reducing the potential risks to owners due to increased pilotage costs, the goal of 100% participation will hopefully be in reach.

The full memo from Transport Canada can be found here.