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This Story is Shareable: Port of Vancouver warns that a container crunch could increase price pressures
Port of Vancouver warns that a container crunch could increase price pressures
Article content Canada's largest port chief predicts that it will run out container capacity in the second half decade. This could prolong the price pressures on Canadian exporters and importers.
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Article content Robin Silvester is the president and CEO of Vancouver Fraser Port Authority. He stated that even though the current project will increase capacity by 600,000 containers, current spacing at the Port of Vancouver could lead to logjams or worrisome congestion. This could happen anytime between 2025-2028. This video is not loading. We are sorry.
Tap here to view other videos by our team. Refresh your browser. The number of containers moving in and out from the maritime gateway jumped 24% over the same period last years. This is a result of rising demand for raw materials and consumer goods during the pandemic. In an interview, Silvester stated that it was frustrating to see five years in the future and know that there will be a shortage of capacity.
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Article content. This grim outlook comes at an era when ocean ports around the world are facing severe backlogs. Ships have been waiting for days or even weeks to unload cargo because of shifting consumer demand at the height of the COVID-19 pandemic. Trevor Heaver is a professor emeritus at University of British Columbia's Sauder School of Business. Heaver stated that the current situation is exceptional. He said that people who stayed at home due to virus containment measures accumulated items in online shopping carts, which led to shortages of products such as electronics and cleaning supplies. In turn, businesses began to stockpile inventory which increased demand for shipping containers that could transport materials through the supply chain. He said that container pile-ups in various ports were also exacerbated by natural disasters like a typhoon, which hit China, or a shortage of labour due to low supply.
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Article content. More on this topic. The global appetite for Canadian commodities is still high with Vancouver port handling record volumes during the first half of the economic recovery. However, with the use for large, heavy metal boxes (which transport many items from home furnishings to machinery) expected to rise two to three percent annually, it's not a good situation for the future. The spokesperson for the port authority stated that container operations are fluid at the moment with minimal congestion and only one ship at anchor. This is in contrast to the 70-ship backlog in Los Angeles, Calif., this week. However, the spokesperson also said that our terminals are operating at an extremely high level, which can lead to congestion due to supply chain disruptions. A separate report by A.P. Moller Maersk A/S is a world-leading transport and logistics company. It stated that overall the port's capacity has become limited. According to the September 23 report, vessel waiting times had reached five days.
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Article content. The port authority is currently attempting to get permit approval for an expansion to Roberts Bank Terminal. This will allow for additional storage for approximately 2.4 million containers. However, the proceedings have been ongoing for 10 years. Silvester stated that the earliest that the capacity will become available is in 2023. He stated that there is nothing we can do about the terminal 2 shortfall. Silvester stated that if the forecasts are true, it could increase inflation pressures. Already consumer prices have risen sharply due to supply chain disruptions. In August, inflation hit an 18-year high at 4.1%. There will be pressure on import prices for everyone. This will also impact the price of exports. Itll increase the costs of exporting, making them less competitive in global markets. Email: bbharti@postmedia.com | Twitter: biancabharti
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