Wed. Aug 10th, 2022

The bleak prospects come at a time when ports around the world are experiencing severe backlogs

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The leader of Canada’s largest port expects it to run out of container capacity in the second half of this decade and threatens to prolong the price pain of Canadian importers and exporters.

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Robin Silvester, president and CEO of the Vancouver Fraser Port Authority, said that even with an ongoing project set to expand capacity by 600,000 containers, the current distance of the Port of Vancouver will mean logjams and worrying congestion could begin anytime between 2025 and 2028.

Container capacity broke records in the first half of the year at the port, the federal agency reported on September 23rd. The number of containers flowing in and out of the maritime gateway rose 24 percent from the same period last year, topping the figures for 2019 by 15 percent, a reflection of the rising demand for consumer goods and commodities in the midst of the pandemic.

“It’s frustrating that we can sit here and look for five years and see that we’re going to lack capacity,” Silvester said in an interview.

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The bleak prospects come at a time when ports around the world are experiencing severe backlogs, with ships waiting days or weeks to unload cargo as a result of rotating consumer demand during the height of the COVID-19 pandemic, Trevor Heaver said , Professor Emeritus at the University of British Columbia’s Sauder School of Business.

“The current situation is very unusual,” Heaver said. When people stayed home due to virus containment measures, he said they were stacking items in their online shopping carts, leading to a shortage of products such as cleaning supplies and electronics. Companies, in turn, began to stock up on warehousing, increasing the demand for transportation containers to transport materials throughout the supply chain. At the same time, natural disasters — such as a typhoon in China — along with labor shortages in ports, either due to eruptions or low supply, exacerbated container piles in various ports, he said.

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At present, the container capacity in the port of Vancouver is 85 percent utilization, but with use for the large metal boxes that transport many goods, from home furniture to machinery, is expected to climb two to three percent annually, “it is not a big situation” for the future, said Silvester. A Port Authority spokesman said container operations are currently “floating” with limited congestion and one ship at anchor, as opposed to 70-ship lagging ports in Los Angeles, California this week “That said, our terminals operate on a very high level, which creates a risk of congestion due to disruptions in the supply chain, “said the spokesman in an e-mail. A separate report from AP Møller – Mærsk A / S, one of the world’s largest transport and logistics companies, said, that the capacity of the port has generally been limited.The ship’s waiting time had reached five days, according to the report from 23 September

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The Port Authority is currently in the process of obtaining permission to build an extension to the Roberts Bank Terminal, which will provide extra space for the equivalent of 2.4 million containers, but the case has been underway for 10 years and the capacity will be available in first half of the 2030s, Silvester said. “We really don’t see anything we can do to remedy (the lack) other than to go as fast as possible with the Terminal 2 project,” he said. “We’re having an uncomfortable period.”

If the forecasts turn out to be true, Silvester said, it could increase inflationary pressures. Consumer prices are already rising sharply, mainly due to bottlenecks in the supply chain, where inflation peaked at 18 per cent in 4.1 years in August.

“There is no doubt that (there) will be pressure on prices for importers – for all of us (also with) the things you buy in the shops – and that will put pressure on exports. This will increase export costs and make them less competitive in global markets. ”

• Email: bbharti@postmedia.com | Twitter:

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