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CHAPTER 1 - INTRODUCTION
1.1 Objectives
A competitive and efficient national transportation system that contributes to a sustainable environment advances the well-being of Canadians and enables competitiveness and economic growth in both urban and rural areas throughout Canada.1 Canada’s National Policy Framework for Strategic Gateways and Trade Corridors has been developed to enhance multimodal integration of major transportation systems, as well as their efficiency, safety, security, and sustainability.2 In support of this framework, the objectives of this study were to:
- Review the role, function, and competitiveness of the major marine container terminals along the Canadian and US Pacific Coast; and
- Identify terminal-related strategies that could potentially enhance the competitiveness of Canada’s Pacific marine container terminals.
Businesses are competitive when they are able to successfully sell their products and services in a competitive market place while earning a sufficient return for their shareholders.3 Competitive terminals strive with one another for the same customers and profits. When shipping companies, importers, and exporters have alternatives, the container terminals are motivated to provide better services, environmental performance, and prices than their competing terminals. Competitiveness allows terminal companies to attract shareholder investment capital to increase efficiency and thus ensure a continuation of benefits to workers, communities, and the Canadian importers and exporters reliant on container trade.
1.2 Scope of Report
We identified the shipping line, importer, and exporter container terminal customers and surveyed their perceptions of services. As recommended in the World Bank’s Port Reform Tool Kit we gathered data and analyzed transport competitive options, ownership models, operations, tariffs, financial performance and oversight of the public interest.4
We gathered data relating to the Canadian Competition Bureau’s goal of providing equitable opportunities for small and medium sized exporters.5 We also gathered data on environmental sustainability and information technologies, both key factors in competitiveness. We compared all Pacific coast terminals against 25 environmental performance benchmarks set by the Los Angeles and Long Beach terminals.
We used quantitative competitiveness indicators such as industry structure, customer service, environmental sustainability, innovation, prices, and profitability. We summarized overall prices for importers and exporters, including ocean shipping, rail, marine terminal, and inland terminal prices for Canada and the US. We collected and analyzed information about labour-related issues. We also compared the cost of terminal leases, financing, and local taxes. The Singapore-owned American President Line’s Los Angeles terminal was selected as the model benchmark of competitiveness for comparison.6
We obtained balance sheet information from trade reports of terminal acquisitions. We estimated gross revenues from throughputs and tariff rates. We obtained information about operating costs from shipping company annual reports, news reports, and port and civic officials. We estimated how recent changes in ownership and financial structure of Canadian terminals may affect price competitiveness.
We conducted 105 telephone interviews with private sector stakeholders. People were assured that their comments would be anonymous. Each contributor is actively working with containers and offered something valuable from their experience. We visited more than 30 import distribution centres, 20 export transload terminals, and 10 container storage sites in Canada and interviewed many of their representatives. We visited the largest container terminals in the US at Los Angeles and Long Beach to observe current terminal, truck, and rail operating procedures and to gather current port information.
1 Canada Transportation Act, 1996. http://www.tc.gc.ca/eng/acts-regulations/acts-1996c10.htm
2 Lawrence Cannon, Minister of Transport, Infrastructure and Communities, July 30, 2007. http://www.canadasgateways.gc.ca/nationalpolicyframework/nationalpolicy2.html
3 BC Competition Council, June 2006. http://www.bccompetitioncouncil.gov.bc.ca/Executive_Summary.pdf
4 World Bank Port Reform Tool Kit, Second Edition, Washington, DC, 2007. www.worldbank.org/html/fpd/transport/ports/toolkit/mod6.pdf
5 The Canadian Competition Bureau, Ottawa. http://www.competitionbureau.gc.ca/epic/site/cb-bc.nsf/en/h_00148e.html
6 APL-NOL Press Release, March 15, 2006. http://www.apl.com/press_releases/html/press_release_20060315.html
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