Container Traffic Forecast Study – Port of Vancouver, 2016
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Container Traffic Forecast Study – Port of Vancouver, 2016 Prepared for the Vancouver Fraser Port Authority by: OCEAN SHIPPING CONSULTANTS Ocean Shipping Consultants is part of HaskoningDHV UK Ltd the Royal HaskoningDHVgroup. 2 Abbey Gardens Great College Street Westminster London SW1P 3NL England Tel: +44 (0) 1784 839109 Email: [email protected] [email protected] 1 Legal Notice: This Container Traffic Forecast Study 2016 was prepared by Ocean Shipping Consultants under instructions of the Vancouver Fraser Port Authority. Neither the Vancouver Fraser Port Authority, nor their directors, officers, employees, agents and other persons acting on its behalf (a) make any warranty, expressed or implied, with respect to the use of any information or methods disclosed in this report; or (b) assume liability with respect to any information or methods disclosed in this report. This document has been prepared for the titled project or named part thereof and should not be relied upon or used for any other project without an independent check being carried out as to its suitability and prior written authority of Ocean Shipping Consultants being obtained. Ocean Shipping Consultants accepts no responsibility or liability for the consequences of this document being used for a purpose other than the purposes for which it was commissioned. Any person using or relying on the document for such other purpose agrees, and will by such use or reliance be taken to confirm his agreement to indemnify Ocean Shipping Consultants for all loss or damage resulting therefrom. Ocean Shipping Consultants accepts no responsibility or liability for this document to any party other than the person by whom it was commissioned. 2 Key Terms and Abbreviations used in the Report The following key terms and abbreviations are used throughout the report and are listed as a guide. BC British Columbia bn billion C$ Canadian dollar CAGR compound annual growth rate Deepsea direct intercontinental container shipping dwt deadweight tonnes ECNA Eastern seaboard of North America/East Coast of North America FEU forty foot equivalent units GDP gross domestic product GT gross tonnes ha hectares IMF International Monetary Fund imp/exp import/export k thousand kg kilogram km kilometre kn knots LOA length overall (of a ship) m metre (length) or million (quantity) mt million tonnes mta million tonnes per annum nm nautical miles NPX New Panamax (max 13000 TEU) OECD Organisation for Economic Co-operation and Development Pacific Gateway (PG) Ports of Vancouver and Prince Rupert Pacific Northwest (PNW) Wider geographic region consisting of the ports of Port of Vancouver, Prince Rupert, Seattle, Tacoma, Portland Pacific South (PS) Ports of Long Beach, Los Angeles and Oakland Pacific West Coast Western seaboard of North America/West Coast of North America p.a. per annum QCC quayside container crane SPP super-post-Panamax (crane outreach more than 18 rows) sq.m square metres T terminal t tonnes TEU twenty foot equivalent units Transshipment transfer of containers between vessels ULCS ultra large container ship (10,000TEU+) 3 Container Traffic Forecast Study Ocean Shipping Consultants _________________________________________________________________________________________ CONTENTS EXECUTIVE SUMMARY 12-31 SECTION I – MACRO-ECONOMIC TRENDS & CONTAINER PORT DEMAND 32-100 1.1 Introduction 1.2 Overview: North American Container Port Demand Since 1990 1.3 North American Economic Development and Container Port Demand Macro-Economic Trends and Container Port Demand Regional Hinterlands and Container Port Demand 1.4 The Asia-North America Container Trades 1.5 Economic Drivers – Key Port of Vancouver hinterlands Canada overview Eastern Canada and the US Midwest 1.6 A Closer Analysis of Pacific Northwest Container Port Demand 1.7 The Structure of Port of Vancouver Container Demand 1.8 Introduction to Container Port Demand Forecasts to 2050 1.9 Demand Development to 2025 Globalisation Low Cost Transportation Near sourcing GDP scenarios National economic outlooks Regional economic outlooks Importance of Asian demand Medium Term Macro-Economic Outlook Base Case The High Case Low Case Approach to container forecasting 1.10 Demand Development 2025-2050 Continuing Free Trade A Partially Protectionist World New Economic and Trade Paradigm 1.11 Regional Container Port Demand Forecasts Outlook for long term North American container port demand Outlook for long term Pacific Gateway container port demand within the Pacific Northwest range Results for long term outlook for the Pacific Gateway container port demand Factors determining the degree of realization of potential demand Contents 4 Container Traffic Forecast Study Ocean Shipping Consultants _________________________________________________________________________________________ SECTION II – COMPETITIVE DEVELOPMENTS AT OTHER CONTAINER PORTS 101-123 2.1 Introduction 2.2 Existing and Forecast Capabilities of Regional Container Terminals 2.3 Pacific Northwest ports and Terminals Seattle Tacoma Portland Port of Vancouver Prince Rupert 2.4 Summary of Pacific Northwest Container Handling Capacity Development 2.5 Container Port Productivity 2.6 Pacific Southwest Terminals Long Beach Los Angeles Oakland Pacific Southwest Container Handling Capacity Development 2.7 ‘Design’ and ‘Effective’ Capacity 2.8 Key Conclusions – Implications for Port of Vancouver SECTION III – TRENDS IN CONTAINER SHIPPING 124-153 3.1 Introduction 3.2 Container Vessel Sizes and Fleet Development Container Vessel Size driven by Economies of Scale Panama Canal will boost ship size Factors delivering upper limits of container vessels Optimisation of vessel sizes and trading costs Powering issues and scale economies Slow Steaming and Super Slow Steaming 3.3 The Transpacific Trades 3.4 Transpacific Container Services Container Lines Trans Pacific Services 3.5 Competitive Threat from US East Coast Ports 3.6 Summary of Competitive Position of Port of Vancouver in the Region SECTION IV – INTERMODAL DEVELOPMENTS & COST DIFFERENTIALS 154-180 4.1 Introduction 4.2 Development Synopsis Intermodal Container Traffic International Intermodal Container Train Capacity and Rail Operators Potential Railroad Merger Activity 4.3 Major Intermodal Facilities and Planned Investments Comparison of Port Rail Facilities Inland Rail Facilities 4.4 Regional Doublestack Rail Capacity 4.5 The Importance of Rail Connectivity for Port of Vancouver 4.6 Synopsis of Intermodal Rail Pricing in North America 4.7 Key Conclusions – Implications for Port of Vancouver Contents 5 Container Traffic Forecast Study Ocean Shipping Consultants _________________________________________________________________________________________ SECTION V – COMPETITIVE COST STRUCTURE AT PORT OF VANCOUVER 181-206 5.1 Introduction and Methodology 5.2 Container Stevedoring Charges West Coast Container Handling Charges Since 2008 World Container Handling Charges Regional Container Handling Charges The Effect of Exchange Rate Movements on Container Handling Charges Total Built-Up Transit Costs 5.3 The Outlook for Port of Vancouver Container Handling Charges 5.4 Relative Cost Structures and Potential Port of Vancouver Demand Key Assumptions 5.5 Cost Calculations Cost Levels for Transport Alternatives The Empty Container Issue 5.6 Key Conclusions – Implications for Port of Vancouver SECTION VI – SWOT ANALYSIS FOR PORT OF VANCOUVER 207-213 6.1 Introduction 6.2 The Competitive Position of Port of Vancouver – Qualitative Assessment 6.3 The Competitive Position of Port of Vancouver – Forecast Growth Areas SECTION VII – FORECAST CONTAINER HANDLING VOLUMES AT PORT OF VANCOUVER 214-226 7.1 Introduction and Methodology 7.2 Port of Vancouver Forecast Demand Development 7.3 Comparison of Port of Vancouver Annual Growth Development 7.4 Comparison of Port of Vancouver Container Forecasts – 2014 vs 2015 7.5 Port of Vancouver Supply/Demand Development to 2025 7.6 Key Conclusions – Implications for Port of Vancouver Contents 6 Container Traffic Forecast Study Ocean Shipping Consultants _________________________________________________________________________________________ TABLES & PAGE NUMBERS Table ES1 Vancouver Containerised Import Volumes 1995-2015F 21 Table ES2 Vancouver Containerised Export Volumes 1995-2015F 21 Table ES3 Core Macro-Economic Forecasts to 2025 22 Table ES4 Core Asian Macro-Economic Forecasts to 2025 23 Table ES5 Forecast Overall North American Container Port Demand to 2050 24 Table ES6 Forecast Pacific Northwest Container Port Demand to 2050 25 Table ES7 Forecast Pacific Gateway Container Port Demand to 2050 26 Table ES8 The Relative Competitive Position of Port of Vancouver vs Competing Ports 28 Table ES9 Forecast Potential Total Vancouver Volumes to 2050 28 Table ES10 Comparison of Annual Growth Rates of Total TEU – Historic Container Demand 30 Table 1.1 North America: Container Throughput by Port Range 1990-2015F 35 Table 1.2 North America Pacific Northwest Container Throughput 2000-2015F 39 Table 1.3 North America Pacific South Container Throughput 2000-2015F 40 Table 1.4 North America Overall GDP Development 1990-2015F 41 Table 1.5 North America Trade Volume Development 1990-2015F 42 Table 1.6 USA and Canada GDP by Region (Current Prices) 1996-2015F 44 Table 1.7 N America Real GDP and Container Port Demand Growth 1991-2015F 46 Table 1.8 Estimated Container Flows by Region and Port Range 1990 49 Table 1.9 Estimated Container Flows by Region and Port Range 1995 49 Table 1.10 Estimated Container Flows by Region and Port Range 2000