On the east side, steel shipping containers stuffed with the inbound bounty of Asian factories sit stacked like giant Lego. It’s hard to imagine a more jarring contrast to the port’s scenic backdrop. Just metres from the causeway lie the tidal flats of Roberts Bank, one of the world’s richest habitats for migratory birds. Looking north, you can see the Vancouver skyline dwarfed by the North Shore mountains.
The port was never designed to look anything but industrial, and yet, to the province’s and country’s business leaders, it’s a thing of beauty. Deltaport is a key part of the ambitious Asia Pacific Gateway strategy to move more goods through B.C. at a time when the whole west coast of North America is racing to do the same. Port cities such as Seattle, Tacoma, Oakland, Los Angeles and others are all spending billions to upgrade their transportation networks. Each locale is trying to lure a bigger share of the tsunami of Asian trade that has already been stymied by port congestion. Our province, for its part, plans to triple the number of containers handled by its ports by 2020, which means billions to be spent on road and rail upgrades, as well as the expansion of ports such as the one in Delta. Prince Rupert’s port is another key part of the game plan.
But for all the promises of jobs, cheaper goods and increased economic activity, this is no Field of Dreams. Building infrastructure does not guarantee a Hollywood ending. Shipping is a competitive business, and companies will always move goods through the ports that serve their needs best. It is also a dirty business. Busier ports mean more diesel fumes polluting the air, trucks clogging the roads and distribution centres gobbling swaths of land. Communities that neighbour ports are balking at the idea that the growth in port activity should be unrestrained – and so, as retailers and shipping companies clamour to alleviate the continent’s transportation bottlenecks, they’re meeting heavy resistance. Unless ports can figure out how to suppress the damage they do, the pipeline to Asia won’t get much bigger. For B.C. the question is whether it can achieve its Gateway ambitions at a cost its citizens are willing to pay.
Kevin Falcon, the province’s transportation minister, is easily the Gateway’s biggest champion. That’s little surprise, given that it’s his baby; he hatched the idea and brought it to the premier in 2004. Since then the federal government has jumped on board, as have private-sector partners, including Canadian Pacific Railway Co. (CP) (CP-T) and Canadian National Railway Co. (CN) (CNR-T). Falcon proudly compares the Gateway to far-sighted infrastructure projects such as the St. Lawrence Seaway and the rail and hydroelectric projects of former premier W.A.C. Bennett. (Ironically, it was Falcon’s government that essentially sold off Bennett’s baby, BC Rail Ltd., to CN in 2003.)
As Asia has become the world’s factory floor, Falcon sees opportunity knocking at B.C.’s door. “The Asian-North American trade corridor is becoming very, very critical,” he says. “And here is British Columbia with the most incredible geographical positioning: the closest piece of real estate to Asia.” The province’s goal is to pump up B.C.’s share of West Coast-bound containers to 17 per cent by 2020 – up from its current nine per cent market share. Most of that new traffic will move through upgraded ports at Deltaport and Prince Rupert, with the province committing $500 million to Prince Rupert alone.
Falcon recognizes achieving such ambitions won’t be easy. Lower Mainland community groups have fought back, citing potential environmental damage and congestion caused by port activity, and First Nation groups want a say in development in Prince Rupert. And other West Coast ports see opportunity to expand as well. “We’re up against competitors that are tough,” Falcon says. “We just think that by working co-operatively with the private sector and different levels of government, we’re probably able to move a lot more quickly.”[pagebreak]B.C. is aiming to take a slice of pie from the heavyweights – Seattle and Tacoma, but particularly the big Southern California ports of Los Angeles and Long Beach, which account for more than 72 per cent of West Coast container traffic. The latter two are the busiest and second-busiest ports on the continent, respectively, and each year handle a combined total of more than 16 million TEUs (a unit describing the equivalent of a 20-foot-long container). Lower Mainland ports, by comparison, handle 2.3 million TEUs. But the other ports aren’t just competing with B.C.; they’re also giving lessons about the current shipping boom’s costs.
Few of us would be talking about competing for port business if Los Angeles and Long Beach hadn’t run aground during the last six years. Congestion and labour shortages have on occasion staunched the flow of goods, leaving retailers scrambling to fill orders and shippers looking to other ports as alternatives. Still, Southern California governments and community groups made it clear they would not allow the ports of Los Angeles and Long Beach to expand to meet demand unless they finally did something about the mess they were making. Environmental groups filed lawsuits against the ports, blocking at least 15 expansion projects.
It’s hard to dismiss the environmentalists’ concerns as those of tree-hugging radicals – not when the government’s California Air Resources Board estimates that fumes from the ports’ ships and trucks are contributing to the premature deaths of 1,200 people in the state each year. The ports are the worst polluters in what is one of the most heavily polluted areas in the U.S. Some 16,800 trucks, many of them old and dilapidated, shuttle goods to and from the ports each day. The ships themselves burn some of the dirtiest grades of fuel, with each ship contributing as much pollution as 12,000 cars. Greenhouse gases get all the press these days, but ships and trucks belch nasty, old-fashioned particulate matter and other pollutants that ravage people’s lungs. Area residents are dying from emphysema and other diseases because of the ports. Long Beach Mayor Bob Foster flatly told the L.A. Times, “We’re no longer going to subsidize cheap goods with the health of our citizens.”
Farther north the air is not so much a concern as the land. Cities near the port of Tacoma at first welcomed the port’s explosive growth. Big retailers such as Pier 1, Home Depot and Target built big distribution warehouses in the area, infusing municipalities with cash. Soon, however, cities discovered that, beyond the initial development fees, the warehouses do little but take up space. The warehouses employ few people – about one person for every 1,000 square feet – and pay little in the way of property taxes because of a statewide cap in tax increases. Worse, the growth in heavy trucks is wearing down roads and adding to congestion. Some municipalities in the area are now blocking the growth in warehouses.
Local groups are echoing similar concerns here at home. A key part of B.C.’s ports strategy includes expansion of the facilities at Deltaport. A Delta-based group, Against Port Expansion in Delta (APE), is fighting the plan on a number of fronts. Deltaport has two berths at its terminal on the south side of the island and a third berth under construction on the southeast corner. A second terminal, with an additional three berths to be built on the north side of the island by 2020, is currently in the works. That will triple the number of berths at the port from what exists today. APE lost the fight to stave off the third berth but is challenging the construction of Terminal 2.
APE’s executive director Roger Emsley is quick to describe a long list of threats to the community if Deltaport expands as planned. “Right now we’re sitting at 1,800 trucks a day,” he says. “If Terminal 2 goes ahead, that will go to more than 5,000.” More trucks could result in massive congestion in the George Massey Tunnel connecting Richmond to Delta, a route Gateway engineers estimate 40 per cent of Deltaport’s trucks will take. Tripling Deltaport’s capacity will invite three times the number of ships that will, along with the additional trucks, spew three times the fumes. The Vancouver Fraser Port Authority (VFPA) estimates that its current activities in the region (including those at its Vancouver and North Shore terminals) generate nine per cent of the Lower Mainland’s air pollution. That figure will surely grow.[pagebreak]
Land is a concern here too. Rail yards, roads and container-handling facilities servicing the beefed-up Deltaport could industrialize 400 hectares of prime farmland currently in the province’s Agricultural Land Reserve. Deltaport is parked in the midst of the Fraser River estuary, a true ecological jewel; the Fraser produces more salmon than any other river in the world, and its estuary is a key habitat for millions of migrating birds that fly along the Pacific Flyway each year. More than half the world’s population of western sandpipers touches down on the tidal flats of Roberts Bank in late April and early May, on the birds’ way to Alaska. It’s one of just five North American feeding stops for them on their long journey from South America. Each stopover is a critical refuelling station where the birds try to fatten themselves enough to fly the next leg of their trip.
Of course, Delta is not the only municipality affected by the shipping onslaught. Just witness the furor over the plan to widen the Trans-Canada Highway and twin the Port Mann Bridge. Some 16 Lower Mainland communities are touched by the region’s ports. How much noise, pollution and congestion are their citizens willing to stand so Calgarians and Torontonians can get their tennis shoes faster?
The Southern California ports tell a cautionary tale about the shipping boom’s hazards, but now they’re the leaders in harm reduction. Los Angeles and Long Beach are enacting the most aggressive environmental policies anywhere on the coast – and they’re doing so even if the increased costs threaten to send ships elsewhere. Under the San Pedro Bay Ports Clean Air Action Plan, the two ports aim to cut their production of particulate matter, smog-forming nitrogen oxide and sulfur oxide by at least 45 per cent by 2012. They are taking other measures as well – measures that will begin to clear the backlog of expansion projects blocked by environmental concerns. A 27-hectare expansion project green-lighted last December was the first approved in seven years.
In April the California ports agreed to pay $12 million into a trust fund over the next year to mitigate damage in the neighbouring communities of San Pedro and Wilmington. Six million of that will pay for air filtration systems in Wilmington schools; asthma rates for children near the ports far exceed the national average, and California students miss some 1.1 million school days each year due to ports-related respiratory diseases. In exchange for the deal, environmental groups will drop their challenge of a $170-million expansion project in Wilmington. This deal could become a template for how other expansion plans proceed. The ports will negotiate with environmental and community groups first instead of fighting costly lawsuits – and because the trust fund will grow with each expansion approved, environmental groups have a stake in seeing growth move ahead.
Other programs are less likely to make shippers happy. The SoCal ports announced in March a plan to phase out older, dirtier trucks by 2012. By that year, the only trucks allowed will have to have been built after 2007. The ports will subsidize the new trucks by imposing a $35 fee for each container not moved by rail. The California ports are also trying to force ships to burn cleaner low-sulfur fuels that can cost twice as much as the bunker fuels they use now. Until the ban clears legal hurdles, the ports are offering incentives to cover the costs of ships switching fuels.
Southern California’s struggles to constrain their ports’ harm tilt the playing field in B.C.’s favour. Analysts project that increased costs at L.A. and Long Beach will drive as much as three per cent of their business to other ports – that’s in addition to business already being driven away by congestion issues. Ironically for a city that prides itself on being a sustainability leader, part of Vancouver’s competitive edge is that its environmental initiatives are comparatively timid.[pagebreak]The VFPA has teamed up with the ports of Seattle and Tacoma to create a joint clean air strategy. The ports share environmental targets, but each is free to determine how to meet those goals. There are compromises, such as Vancouver having to use American spelling in its documents, but the benefit of the combined effort will be that the ports won’t compete against each other in an environmental race to the bottom. The VFPA will reduce harbour fees for ships using cleaner fuels within 44 kilometres of the port. But the corporation’s director of environmental programs, Darrel Desjardin, doesn’t pretend the savings will cover the difference in costs between fuels. Instead, the VFPA offers the equivalent of shiny stars on your kid’s homework: gold, silver and bronze designations for ships that meet certain targets.
Desjardin is justifiably proud of his department’s work and gets praise from usual critics such as APE’s Roger Emsley. But it’s clear he doesn’t like talking about how Vancouver’s programs fall short of L.A.’s pace. “L.A. and Long Beach have a large urban population,” he says. “Vancouver has 5,000 container trucks. L.A. has 15,000.” We have fewer polluters and fewer lungs breathing in the fumes. But if the Gateway succeeds as envisioned, B.C. will handle nine million TEUs by 2020 – more than the 8.5 million L.A. handles now. And while it’s true that Prince Rupert will take on about two million TEUs of that traffic, the growth in Vancouver will be explosive.
Roger Emsley would like to see more of B.C.’s container traffic directed to Prince Rupert. The small town is tucked just south of the Alaskan Panhandle and could turn the current model of shipping on its head. It’s the closest North American deepwater port to Asia and has a direct rail link to the major logistics centre of Chicago. While other ports struggle with congestion and environmental conflicts with their neighbouring urban communities, sparsely populated Prince Rupert has few of those concerns.
But Boston Consulting Group senior partner George Stalk believes Prince Rupert must overcome significant hurdles to avoid being more than a backup for Vancouver. While Stalk says there’s no inherent advantage to being hooked up to a big city, he does cite obstacles to Prince Rupert becoming a major West Coast shipping hub, including the reluctance of shippers to switch ports; delays resulting from U.S.-bound goods having to clear customs twice; and the unlikelihood of the various stakeholders coming to agreement on expansion plans in a timely manner.
Other factors work against Prince Rupert becoming a major North American shipping hub. CN Rail runs the trains from Prince Rupert to Chicago, and shippers complain that, because of its monopoly, the company has no incentive to build the capacity needed to handle peaks in business; companies importing through Prince Rupert often see their goods sail smoothly until Chicago, where they are tied up in the city’s gridlock crisis. Retailers end up paying the costs of slow deliveries.
Across the Pacific, it’s another story entirely, with the Chinese throwing up infrastructure megaprojects almost as fast as they can conceive them. Shanghai began its new Yangshan port earlier this decade; by 2012 it will handle 15 million TEUs – almost double what North America’s biggest port, Los Angeles, handles today. A flood of goods is ready to wash ashore, but our continent’s ports are gridlocked. Yet while the Chinese are willing to bulldoze entire cities and displace the people to get its projects done, you just can’t get away with such tactics in a democracy. Ports on this side of the pond will always be constrained by the needs of the communities around them.
The VFPA’s director of trade development Scott Galloway is happy to worry about his ports’ effects on birds as well as on business; moving more containers can’t be the only concern. The port’s role, ultimately, is to serve the city’s and the country’s citizens. “We know the Chinese can build stuff really quickly,” he says. “It’s really impressive. That’s a different model than what we have. We have to be more thoughtful. We live in one of the most beautiful cities in the world – it also supports the largest port in the country.”