The following article, published by theORCA.ca, highlights how issues within the Canadian federally regulated port management system have created inefficiencies in the cargo supply chain. Port Alberni’s Zoran Knezevic outlines a solution…

‘In the shadow of the giant’
By Frank Peebles

December 1, 2021 — The federal government is in control of Canada’s shipping ports.

Or…is it?

On paper, the Government of Canada dictates the terms of operation for the nation’s 17 foremost harbours (plus a regulatory hand in hundreds of lesser ports). Each of them is governed by a port authority structured almost identically from coast to coast. B.C. has four: Vancouver-Fraser, Prince Rupert, Nanaimo, and the most westerly of the 17, the Port Alberni Port Authority (PAPA) on Vancouver Island.

The modern nation has never known a day that the federal government wasn’t the boss of these main cargo points. It started in the 1930s as the National Harbours Board, then the Canada Ports Corporation in the ‘80s, then the National Marine Policy in 1995 which led three years later the Canada Marine Act which prevails today (with overlap from the Canada Transportation Act, Canada Shipping Act, Fisheries & Oceans Canada, and others).

In 2008, autonomous port authorities were established that are free – within federal oversight – to do their own business in exchange for annual dividends back to Ottawa.

Transport Canada is the department that oversees these ports. Zoran Knezevic is president and CEO of PAPA and he believes the people of Canada are not getting full parental effect from mommy and daddy in Ottawa. He paints a picture of a national port system that is far from a family portrait.

He feels each port is left so much to its own devises that inefficiencies abound, big ports can overreach small ports, and the two biggest losers are Canadian consumers and the environment.

“Everywhere else in the world, distribution centres are at tidewater,” Knezevic said, explaining how goods get into local stores once they arrive from Asia inside those millions of containers pouring out of enormous ships that line up in Vancouver’s harbour (and to a growing degree in Prince Rupert).

Not here, he said, because “the real estate in the Lower Mainland is too expensive, so they send all those containers for 50 of the most popular retail outlets all the way to Calgary.”

Full containers go to Calgary, empty containers come back, then the goods are arranged back onto trains to B.C., then put on trucks to smaller warehouses for local distribution, then put on more trucks to the final retail destinations.

Every mile adds significantly to the congested streets of the Lower Mainland, southern Vancouver Island, interior highways, and BC Ferries, plus overburdened rail lines.

It also triggers waits at anchor for ships in the congested Salish Sea waiting their turn to dock at Vancouver.

From the orcas to the atmosphere, it all hurts the environment, Knezevic said – to say nothing of the price tag on all those consumer goods.

Knezevic has a different view of how things should be.

When he heard that the Vancouver-Fraser Port Authority was paying out of pocket for the development of yet another container terminal – the proposed Roberts Bank II project – to double down on the status quo, he couldn’t stand it any longer. He and his PAPA staff designed their own plan that would cut the inefficiencies.

The proposal doesn’t negate Roberts Bank II, he said, but it does beg the question: Why not Port Alberni as the distribution centre instead of Calgary? The title of the idea is the Port Alberni Trans-Shipment Hub, or PATH.

“We have a lot of potential, having a deep sea port on the west coast, ice free, with a vast amount of available land. It’s a great opportunity and location to develop instead of jamming everything into the Lower Mainland and creating even more congestion,” Knezevic said.

His plan would see container vessels from Asia pull up the deep and sheltered Alberni Inlet, offload the containers there where the port authority is already in possession of gargantuan tracts of land, do the warehouse breakdown of cargo right at the water’s edge, and put the smaller bundles of cargo onto deep-sea barges that would not only make the continuation on to Vancouver more quick and efficient, but they could just as easily go north up the B.C. coast or south to American transportation hubs.

These barges would significantly ease the lineups of huge ships waiting expensively at anchor around the Vancouver shoreline, and they could travel up the shallow Fraser River where oceanic vessels can’t go.

Why is that important? Because, said Knezevic, there are smarter off-load points up the Fraser Valley that would greatly reduce Lower Mainland gridlock and emissions.

“Public money is public money,” said Knezevic.

“Whether it’s a grant from the federal government (the only way ports get cash from their parliamentary parents) or out of the port authority’s own coffers, what’s cheaper: developing terminals in the Vancouver area or developing terminals in the Port Alberni area?”

The feds saw enough wisdom in PATH to fund feasibility studies, but when the dream became a plan, Transport Canada’s eyes started to glaze over.

When separate B.C. port officials were quizzed by The Orca about the idea they, as if on cue, shook their heads and said it added handling to each container. But when one considers the extraneous movement to and from Calgary, does it really? And certainly it would change where the handling occurred, plus add American opportunities.

“It makes sense on every level, however, it is a large project and being in the shadow of the giant (Port of Vancouver) across the water, we feel it was not viewed as objectively as we would like it to be,” Knezevic said, explaining that Transport Canada based at least some of their underwhelming response after running PATH past the Vancouver-Fraser Port Authority which gave it a thumbs-down. Knezevic believes they were overprotective of Roberts Bank II.

The PATH proposal is still under review, however, and Knezevic hopes rational experts and dispassionate math will sway Transport Canada, not one port’s interest over another.

This approach has actually been successfully tried.

In the 1990s the feds structured the St. Lawrence Seaway ports under a single management corporation from Great Lakes to Atlantic Ocean. (The Americans did the same thing.)

Another example is right here in B.C. at the grassroots level. The Lower Mainland was originally serviced by three separate port authorities, but in 2008, in negotiations led by Port Metro Vancouver (as it was then called), they amalgamated into the Vancouver-Fraser Port Authority. The success of this coalition is indisputable; Vancouver’s touch on the national economy dwarfs all other ports in Canada.

Knezevic isn’t advocating for consolidation of B.C.’s four primary public ports, but he insists the national interest is being ill-served by Transport Canada’s lack of organizational influence.

“We are saturating our rail system with unnecessary container trips from Calgary and back. We stack up ships at anchor at the Port of Vancouver waiting for their opportunity to load those other resources (grain, potash, etc.), and do you know who pays for (the ships on standby)? It’s Canadians,” he said.

“The PATH Plan is to help the Lower Mainland, not to attract things to Port Alberni and the Island at their expense. It’s to alleviate the pressure that the transportation chain in the Lower Mainland is experiencing. I was a witness to it. I worked in it. I have an intimate knowledge of the complexities. It is only going to get worse unless something like this is done.”

His intimate knowledge comes from time spent working at the Port of Montreal and 15 years working with container shipping companies TSI and GCT at Vancouver’s DeltaPort, where GCT is trying to expand their operation only a few metres from the Roberts Bank II proposal. He also has experience in the trucking and tugboat industries, and sailed the world. Many port administrators earn their positions through business training. Knezevic arrived by water – he is a master mariner by original trade.

He is in charge of a port founded on the lumber, plywood, pulp, paper and mining exports that put Port Alberni on the map. Those industries all contracted so export ships also dried up.

PAPA’s crew refused to let their harbour sink beneath the economic waves. Instead of relying on the big and obvious, they went after the niche and innovative. They felt the town of Port Alberni was relying on them to be catalysts for the overall community.

“We are the little port that punches above its weight, and the main reason is diversity,” Knezevic said. “Our mandate is to facilitate economic growth.”

Before Covid, they succeeded in attracting cruise ships into their spectacular inlet, augmenting a tourism component that also involves four marinas and a campground under PAPA’s auspices.

They won the contract for Western Canada Marine Response Corporation’s new base.

“The Port Alberni response base will serve as the primary response centre for spills off the west coast of Vancouver Island. Port Alberni will be the home of a new response marina, warehouse / office facility, and seven moored vessels,” said the company, adding that construction is anticipated to be complete in fall 2021.

PAPA struck a partnership with Canadian Maritime Engineering for shipbuilding and repair in three leased facilities at the port. They are also seeking to build a floating drydock which would significantly boost the mechanical maintenance sector. The proposed facility would be capable of handling most navy vessels, anything from BC Ferries, coast guard, commercial and industrial craft. A recent report by KPMG for the Association of BC Marine Industries confirmed the province was already critically short of repair facilities, especially for larger vessels, and the problem was only growing worse as shipping activity increased. Funding talks with all levels of government are going well, said Knezevic.

Niche exports also include First Nations-owned Thunderbird Spirit Water which ships out 30 to 60 containers per month of their premium bottled water. Independent Seafood Corporation sends out 30 to 40 reefer containers monthly on short-sea trips to DeltaPort for transfer onto global vessels.

Port Alberni’s harbour is already home to a seafood processing centre with six full-time tenants in a 17,000-square-foot facility that includes a commercial kitchen. Thanks to this initiative, Cascadia Seaweed is now planting hectares of edible seaweed and is expected to expand their operation exponentially, which would ship from the PAPA port.

Most notably, though, is the recent announcement from B.C. forest products conglomerate SAN Group. They will soon be shipping hundreds of containers of lumber and other wood products from Port Alberni, restoring a forestry foothold at the port and providing significant outgoing container action that can attract other exporters and also draw ships looking to take on paying cargo to improve what is called “deadheading” in logistics terms, where money is only being made one way on a two-way trip.

Thanks to aggressive outreach from the port authority and the community, ships are on their way to Port Alberni. That is an unsinkable fact. How many come and how many containers they exchange is a matter of some vision. Will they beat a PATH up Alberni Inlet? Will the feds consider the big picture and come to PAPA?

In the next installment we will travel 80 kms by road, or about 200 nautical miles to a port already showing some of Vancouver Island’s import-export potential: Nanaimo.

Frank Peebles is a veteran magazine and newspaper journalist based in Prince George. He has won numerous awards for his work, including Canadian Community Newspaper Association and BC-Yukon Community Newspaper Association citations.