Archive for September 25th, 2009
“Waiting for his ships to come in”
The CEO of Port Metro Vancouver says container traffic is down 16% and recovery is slow
Port expansion was one of those things that can happen with no input from anyone. Although in theory responsible to the federal government, since the Port of Vancouver makes money, it can plough it all back into expansion
In 2008, Port Metro Vancouver had revenue of $140-million and a profit of $40.4-million. The money is pumped back into port facilities. The operation is a standalone corporation overseen by the federal Minister of Transport.
And that is a bad year. Of course, the Port does get government support – lots of it.
starting with an injection of $225-million from governments, the port and businesses to build two overpasses for railways to replace level crossings on the North Shore of the Burrard Inlet, as well as improving several roads for truck traffic.
Governments that were responsive to the priorities of their citizens would not be doing that first. They would be ensuring that schools had enough money to keep their buildings safe for children to be in. Or keeping all kinds of essential community services going – like support for women suffering domestic violence. Or maybe keeping operating rooms going so that “elective surgeries” – like replacing arthritic hips and knees – would not be postponed.
The case for port expansion was always dubious, but the recent downturn makes the whole thing look pretty pointless
Traffic of containers that carry an array of consumer goods and other products is down 16 per cent this year. That’s a slight improvement compared with the 20-per-cent drop seen in the first months of 2009, during the worst of the recession, but Mr. Silvester doesn’t see activity gaining much steam. The full-year decline is estimated at 12 per cent.
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The Port of Los Angeles, the West Coast’s busiest destination for containers, saw container traffic fall 19 per cent in August compared with the same month in 2008. That is worse than the 16-per-cent decline for the year the port has seen so far.
Other indicators such as the Baltic Dry Index, a barometer of ocean freight rates for bulk commodities, also suggest the trade outlook is tepid. The index is closely correlated with the health of the global economy. After crashing last year, down 94 per cent to a low of 663 points, it recovered to about 4,000 in June.
Since then, the index has slid steadily and now sits around 2,250.
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the port is running at only about half capacity for containers.
The Tsawwassen First Nation recently got government aid to cover their bit of the ALR in concrete for container storage. They think they are going to make money that way – but given that the port is only at 50% capacity that seems unlikely to me. The article also points out that this trade is for Canada – very little is destined for the US. Which is probably just as well since our economy is not quite a collapsed as theirs is at present, though of course our economies are indeed inextricably linked. Except for the expense of US recovery funds of course.
The future is looking very different to the period of boom that preceeded the recent crash. The recovery is going to take a while, and when it does it will have to take account of the realities that the Bush administration denied – like global warming and the increasing reluctance of foreign investors to hold US debt. Our dependence on imported food is also something we need to start changing. Paving over farmland is going to look exceptionally stupid when food from elsewhere gets prohibitively expensive and we are still waiting for the trans pacific container trade to pick up.
Stephen Rees's blog 