Pacific Northwest ports looking for volume rebound in Q3

CONTAINER volumes at North America's Pacific Northwest ports are declining this year due primarily to the drop in consumer demand caused by Covid-19 pandemic, but port managers expect some improvement in the second half of the year

30 July 2020 - 19:00

CONTAINER volumes at North America's Pacific Northwest ports are declining this year due primarily to the drop in consumer demand caused by Covid-19 pandemic, but port managers expect some improvement in the second half of the year.

Laden imports and exports at the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma declined 15.2 per cent in the first five months of 2020, according to PIERS. The combined total volumes at the British Columbia ports of Vancouver and Prince Rupert were down 6.5 per cent during that period, according to their respective port authorities.

John Wolfe, CEO of the NWSA, said in a port webcast that the past six months have been especially challenging because of the coronavirus disease 2019. The two-year-old US-China trade war has accelerated the shift of US retailers' sourcing from China to Southeast Asia, where East Coast ports have an advantage over the Pacific Northwest ports in attracting liner services, he said.

The second half of the year is still difficult to predict because of uncertainties surrounding consumer demand with Covid-19 cases rising and falling at different rates across the United States, but the NWSA has seen an uptick in volumes in July, Mr Wolfe said.

Carriers blanked 55 sailings to Seattle-Tacoma through June to match capacity with flagging demand, but carriers have announced only seven cancelled sailings through September, which is a good sign for import volumes this fall, he said.

At the Port of Vancouver, laden imports and exports from January through May declined 6.5 per cent to 1.1 million TEU from the same period last year, according to port authority data.

Prince Rupert is seeing a recovery in Canadian imports and exports in July, which indicates the third quarter should see improvement, Brian Friesen, vice president of trade development and communications said. Canada generates about one-third of Prince Rupert's container volume, the Chicago area about one-third, and the Memphis-to-New Orleans corridor about one-third, he said.

US imports and exports are in play for both the Canadian and US Pacific Northwest gateways. Vancouver is served by Canadian Pacific and Canadian National intermodal services to Chicago and beyond. CN offers intermodal rail to Chicago. Seattle and Tacoma are served by the Union Pacific and BNSF intermodal rail to destinations throughout the upper Midwest.

Marine terminal expansion projects will likely be the main area of competition in the next few years as Seattle-Tacoma and the Canadian gateways seek to expand their shares of US imports and exports when trade growth returns to normal.

Both Vancouver and Prince Rupert in 2019 were operating at 80 per cent utilisation or higher. Cliff Stewart, Vancouver's vice president of infrastructure said that last year before Covid-19 depressed consumer demand in North America Vancouver was at 85 per cent utilisation, reports IHS Media.

With capacity still a concern when cargo volumes resume their pre-COVID-19 pace, the Port of Vancouver is expanding the Centerm on both its west and east sides, increasing the terminal's land footprint by 15 per cent. Coupled with on-terminal upgrades, the project will increase Centerm's annual throughput capacity to 1.5 million TEU from 900,000 TEU at present, the port said.

Prince Rupert recently received the regulatory approvals necessary for an expansion of DP World's Fairview container terminal. Phase one, scheduled for completion in late 2021-early 2022, will increase annual throughput capacity to 1.6 million TEU from 1.35 million TEU at present. Vancouver and Prince Rupert are also planning on constructing new container terminals, each with a capacity of 2 million TEU, although those projects are scheduled for delivery in the late 2020s.

Meanwhile, Seattle's 172-acre Terminal 5 (T-5) is undergoing a US$300 million reconstruction that will include modernisation of the facility, deepening of the berths to 57 feet, the addition of super post-Panamax cranes, and improvements to the on-dock rail yard. Phase one of the expansion is scheduled for completion in 2021 and phase two in 2023. In order to improve access to T-5, the port is moving forward with improvements to and eventually the possible replacement of the West Seattle High Rise Bridge, Mr Wolfe said.

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