By Ray Dykes

With some impressive gains as 2010 builds momentum, North
American West Coast ports are finally coming to grips with the
‘R’ word — recovery rather than recession.
After the first four months of a decidedly better year for
most, there’s a hint of optimism from Los Angeles CA to Prince
Rupert BC after a gruelling 18 months or so. But, the relief is
tempered by another ‘R’ word, reality: the monthly gains yearover-
year are only impressive because of just how disastrous
2009 was for many of the ports.
Retaining and growing business is now the number one
Much comes down to how diversified individual ports are.
Those relying heavily on containers and not bulk feel it will be a
couple of years or more before they return to the ‘heady’ days
of 2007, which was a modern benchmark for many. Others,
which enjoy a mix of container traffic, plus bulk and breakbulk
seem to be recovering more quickly.
“Overall to the end of April 2010 we are 20% up,” says an
encouraged Port Metro Vancouver president & CEO Robin
Silvester, at the helm of the busiest port on the West Coast of
all North America by volume. “But, this time last year we were
20% down.
“Still, it’s a much rosier picture this year and some of our
commodities are back to where they were before the global
recession,” he adds.
Vancouver is the largest and busiest port in Canada and the
fourth biggest for tonnage in all of North America and is
experiencing a strong resurgence in its bulk sector this year.
Coal is up 38% to the end of April and Silvester continues to see
more upside there; grain movements are flat, but that’s on the
back of a strong crop year in 2008, which gave a surprisingly
good 2009 as the world continued to eat; potash and potassiumbased
fertilizers are up an amazing 233%; and even containers
are up 8%.
For the Port of Long Beach, traditionally the US West Coast’s
busiest port by total volume, the “recovery has obviously begun,”
says Art Wong, director of communications. “But, that’s after a
terrible time late in 2008 and into 2009.
“The decline has levelled off and things are clearly improving,
but we are not close to where we were two years ago,” he adds.
Long Beach handled almost 7 million TEUs (20-foot equivalent
units) in 2007 and in 2009 that pace had fizzled to 5 million
TEUs. Wong figures it may be a couple of years before the port
gets back to where it was in 2007.
At the Port of Los Angeles, the third busiest West Coast port
by volume at 47.6mt (million tonnes), but the busiest container
port in the United States, 2009 “was the year the global
recession hit our customers smack in the face,” says Geraldine
Knatz, the port’s executive director. “By some estimates, the
container lines lost as much as $20 billion in 2009.”
While Knatz adds the outlook for 2010 is slightly better and
the port is starting to recover, she tempers it with the comment:
“but we are not going to return to the robust conditions we saw
during the first half of the last decade anytime soon.” Much
comes down to key indicators such as consumer confidence,
“and when consumers don’t spend money, there’s less cargo
moving across our docks.”
However, Los Angeles hasn’t witnessed the bleeding of seeing
its container traffic levels 26% down on 2006 levels without
offering a salving bandage or two.
“Because our customers have been hurting, we’ve gotten
aggressive and creative with discounts, incentives, rent price
breaks and reduced fees,” says Knatz. “The discounts and
incentives we created last year and this current year mean we’ll
forgo close to $42 million in revenue to help our customers . . .
because their success is our success.”
It was a different story at the upstart Port of Prince Rupert
in northern British Columbia, which a year ago was accused of
siphoning off container business from other West Coast ports,
thanks to its closer proximity and faster rail links to the
population-rich Chicago market area.
At a time when container traffic was plummeting in 2009, the
Port of Prince Rupert recorded a 46% gain year-over-year.
Admittedly, the numbers are small compared to Vancouver, Los
Angeles and Long Beach. In its first full year as a container port
in 2008, Prince Rupert moved only 181,877 TEUs so the almost
50% boost in a single year is commendable without being
remarkable, but the trend has caught the attention of its
And Prince Rupert knows how to grab attention. In the first
four months of 2010, container traffic was up another 76% over
the same period of 2009, but even more impressively total port
volume was up over 47% thanks to a resurgent coal terminal and
a 180% boost in throughput year-over-year.
The growth is even more spectacular throughout the Prince
Rupert Port because it happened during the crippling worldwide
global economic recession and was the best year for the port
since 1997.
An upstart it may be in the eyes of competitors, but even in
the best light Prince Rupert is still small when it comes to
moving boxes. At the end of the first quarter of 2010 foreign
laden TEU traffic saw Los Angeles capture 34% of the total west
coast traffic, Long Beach was at 27%, Port Metro Vancouver 14%,
Oakland and Seattle both at 9%, Tacoma 5%, Prince Rupert 2%
and Portland 1.
Here’s how the major West Coast North American ports
fared in 2009 and so far in 2010:
As the busiest US port on the west coast, Long Beach saw its
total cargo volume drop by 12.5% or 10mt to 70mt in 2009 over
2008. Container traffic dropped 13% from 6.5 million TEUs in
2008 to 5.0 million TEUs in 2009 – following a record 7.3 million
TEUs in 2007.
The Port’s Director of Communications, Art Wong sees the
recovery underway and says cargoes are trending the right way
with exports up 21% to the end of April 2010, their strongest
levels in 18 months. Imports are also up 19% year-over-year after
four months.
But, with some parts of Europe still in economic turmoil, the
port is reluctant to signal anything but a “cautious recovery” so
far. “Until the US employment picture stabilizes people aren’t
going to be spending much to sustain growth if they’re worried
about holding or losing jobs,” says Wong.
However, dry cargo is still down 7% and steel is down 18%
and more and more bulk shipments are being moved in
containers as buyers opt for five to ten containers of
agriproducts, for example, rather than a whole ship load.
Container traffic was up 16.6% in the first four months of 2010,
but Wong tempers that growth with the depressed figures of the
same period in 2009.
The port is still spending big for the recovery with a $800
million Pier G Terminal upgrade, a $1 billion middle harbour
modernization project for two older terminals, construction of
an all-new 160-acre Pier S container terminal should begin
within two years, a major bridge/rail/road improvement project
is underway, as is a $40 million project to deepen and widen the
main shipping channel for larger oil tankers.
At 6.7 million TEUs, container traffic was down 14% in 2009
over 2008, but it held onto its market share at about 36%. The
port’s TEU best record was achieved in 2006 at 8.5 million.
“We are expecting modest growth in 2010,” says Port of Los
Angeles media director Phillip Stanfield. “Although, some
retailers say it could be double digit growth this year.”
Overall cargo was up nearly 9% to the end of April 2010. The
news on the dry and liquid bulk side wasn’t as encouraging,
however. Liquid bulk reached 11.5mt in 2009 and its pace at the
end of the first quarter of 2.4mt would see if fall away from that
on an annualized basis. Scrap metal exports topped 1mt in 2009
with more of it going in containers each year.
Indicative of a lack of zip in construction and house building,
cement imports from China and Indonesia have disappeared and
there are no ships planned for the rest of the year as domestic
production handles demand.
Breakbulk (steel in slabs, pipes, coils and beams) is a better
story and is up 50% to the end of April and according to Marcel
van Dijk, marketing manager for the port, the outlook is “very
good” for the rest of the year. But, that follows what he calls a
“disaster year” in 2009.
Deepening the main shipping channel to 50 feet from 42 feet has
helped the Port of Oakland weather the recession better than
some other US West Coast ports. Oakland was down 8.4% in
its container movements in 2009 compared to declines of up to
25% in some other major rivals.
But, it was still the lowest year for Oakland since 2004 at
2.04 million TEUs. However, in the context of the global
economic meltdown, it was still an encouraging result for the
port, which handles over 90% of the container traffic bound for
northern California and is also spreading its reach into the US
interior thanks to improved rail links.
Using money from municipal bond sales – Oakland is owned
by the city – the port has spent over $1 billion in the past
decade on storage yard, cargo handling and rail improvements.
As a testament to its faith in Oakland, the Evergreen Line
recently brought in three new post-Panamax cranes for the Ben
E. Nutter Terminal. That brought the port-wide total to 22
container cranes, which can handle the newer, larger container
Vessel calls are up over 6% so far this year to the end of April
and Portland is “starting to see the green shoots of economic
recovery,” says Josh Thomas, its manager of industrial
development. Total tonnage dropped about 17% in 2009 over
2008 and finished the year at 12.8mt.
While container movements dropped to the lowest level
since 2005 at 174,203 TEUs, grain tonnage (largely wheat
although soy bean traffic is improving) remained remarkably
buoyant as it has been since 2007 and at 3.8mt in 2009 was still
close to the 4.0mt of 2008 and the 3.9mt handled in 2007.
Mineral bulk (potash and soda ash) dropped from 4.9mt in 2008
to 2.8mt in 2009.
But, it’s a different story to the end of April 2010 and the star
performers for the port are grain and mineral bulk. Grain
tonnage is up 25% and mineral bulk a staggering 122%, while
break bulk (steel slabs) is almost at the 2009 total in only four
months — up 162%. Autos unloaded are also up over 9%
showing US consumers are starting to buy again.
“For grain it looks like the fastest start in five years,” says
The near completion of the deepening of the Columbia River
shipping channel to 43 feet has helped. The project, which has
been talked about or worked on for nearly 20 years, should be
completed by year’s end.
The light is shining brightly at the end of the recession tunnel for
Port Vancouver in Washington, which has dubbed itself “the port
of possibility.” Shipments totalled 4.8mt in 2009 down 35% from
the 5.5mt level of 2008.
But, there’s optimism the worst is over and port executive
director Larry Poulson says “there is light at the end of the
tunnel and Port of Vancouver will be one of the first to make it
out” thanks to construction work on site for such things as new
rail links and improved terminal facilities.
Another to benefit from the near-completed shipping channel
deepening of the Columbia River, the port is also building a
reputation for handling large lift cargoes such as wind turbines
and heavy equipment. Wheat continues to be the largest single
tonnage item and Subaru imports have been “consistently
“Meeting the challenges of change” has consumed the Port of
Tacoma, the 13th ranked US port by trade at $25.2 million in
2009. The port opted to trim its staff size and trim expenses to
save $3.5 million last year and is refining its efficiency, particularly
with an eye on the Panama Canal expansion, which is expected
to bring” a profound transformation of US cargo patterns” with
the East Coast gaining shipping volumes at the expense of the
west coast ports.
At Tacoma, container volumes dipped 17% in 2009 over 2008
at 1.5 million TEUs and were still down 13.4% at the end of April
2010. Every shipping category from grain to autos was down at
the end of 2009 and total cargo slipped to 15.7mt, the lowest in
recent memory.
The trend has continued into 2010 and there was nothing on
the statistics sheet at the end of April that was up on the
previous year except for domestic container movements and
with total tonnage dropping off a further 10%.
“Better times are coming, and we are working together with
our partners to make sure we will all be ready,” was how port
President Don Johnson sums the situation up.
Ranked No. 10 in the US by total vessel trade at $33.4 million,
Seattle remained the major revenue generator of all Washington
State ports in 2009.
But, the cargo volume news still wasn’t that good in 2009 as
the total handled dipped to 18.6mt from 20mt a year before —
a drop of 7% — and the lowest since 2004. The worst, however,
appears to be over as the port posted a 57% jump in TEUs
handled to the end of April. That number is somewhat deceiving
as it represents new TEUs from Maersk/CMACGM, which
moved its business from the Port of Tacoma to Seattle last June.
When the June over June figures for the past year are
released in the summer, the prediction is that the Port of Seattle
growth will actually be flat.
Containers aside, Seattle is a major shipper of soyabeans and
corn from the upper Mid-West States. In 2008, the best year
ever, the port shipped 6.4mt of grains and this dropped 13.9% to
5.5mt in 2009. At the four-month mark of 2010, grain shipments
were up a modest 1.2%.
Cruise passenger numbers continue their year-over-year
climb and reached 875,433, down only slightly from prerecession
2008 numbers.
The strong recovery of coal and the return of forest products
following years of stunted performance have been highlights so
far in 2010 for Canada’s largest and North America’s fourth
biggest and most diversified port by volume. To the end of April
2010, dry bulk led by coal was up 24%, breakbulk up 27%, liquid
bulk up 5.2% and auto movements up by 15.8%. Even container
traffic was up by 8.2%. Overall cargo tonnage was up 19.5%.
Forest products were up 18% in the first four months, but
the good news follows several poor back-to-back years for the
industry. British Columbia producers moved into new markets
such as China for lumber sales and took advantage of a Chilean
earthquake disaster and lost market capacity to increase their
shipments of pulp.
In fact, it was the diversification that saved the port from
serious bleeding in 2009 when overall tonnages slipped 11% to
102mt — still easily the best total throughput of all North
American west coast ports. Container traffic was down to 2.2
million TEUs, a drop of 14% in what was described as a
“challenging and turbulent year.”
A highlight of the port’s year was the opening of a $400
million Third Berth project at its largest container terminal
Deltaport in January 2010 lifting that facility’s capacity from 1.2
million TEUs to 1.8 million TEUs. And next door at Roberts
Bank in the outer harbour, the busiest coal export facility in all
of North America, Westshore Terminals, lifted its capacity from
24mt to 29mt a year, completing a $49 million equipment upgrade.
Port CEO Robin Silvester describes his port as being “very
healthy financially” thanks to cargo diversity, a strong Canadian
dollar, and a fixed rental base for leased properties.
Talk of the global recession has drawn shrugs from Prince
Rupert, which has been posting significant cargo volume gains
over the past year to finish at 12.1mt, up 15% over 2008.
Much of the excitement comes from the ever-expanding
Fairview Container Terminal, which had its first full year in 2008
at 181,877 TEUs. In 2009 that number had grown to 265,259
TEUs and that was up 46% at a time when all other west coast
ports were suffering declines.
And 2010 has been no different with performance the best
so far since 1997. In the first four months TEUs shot up another
76% to just over 1 million TEUs. The record-breaking pace is not
just containers as thermal coal shipments through Ridley
Terminals Inc. are up 164% to the end of April at 1.6mt. Coking
coal is up 239% at 590,000 tonnes and petcoke 249% at 411,954
tonnes as the terminal is forecasting a record year.
Grain, led by wheat was up 35% in 2009 over 2008 at 5mt,
although the pace has eased in 2010 to the end of April by 25%
compared to the same four months of 2009. Overall, the year is
still expected to be about the same as in 2009 because of the
strong 2009/10 crop year.