Record cargo volumes through the Port of in 2018 Second consecutive year of record cargo volumes reflects ’s growing trade

portvancouver.com

The Vancouver Fraser today released the 2018 year-end statistics for cargo through the . Overall cargo volume through Canada’s largest port reached a record high of 147 million tonnes, up 3.5 per cent from 2017.

One of the port’s biggest strengths continues to Follow the BCMEA be the ability to accommodate the most diversified range of cargo of any port in North America. Sectors that experienced strong growth last year include containers, potash, canola products and barley, all of which hit new records in 2018. (continued) We’re looking for your good news stories to share! Please submit to Lauren Chan: [email protected]

500 – 349 Railway Street, Vancouver, V6A 1A4 604.688.1155 www.bcmea.com March 14, 2019 The BCMEA Bulletin March 14, 2019 Record cargo volumes through the Port of Vancouver in 2018 (continued) In 2018, container volumes, measured in 20-foot equivalents or TEUs, increased by 4.4 per cent to a record 3.4 million TEUs. In Vancouver, containers arrive filled with appliances, clothing and other consumer products as well as auto parts and manufactured goods from Asia. They leave loaded with Canadian grain, lumber and food products, among other goods. For Canadian businesses large and small, container trade through the Port of Vancouver is essential to gaining access to international markets. However, forecasts show that Canadian west coast container ports will be full by as early as the mid-2020s and therefore unable to accommodate growing trade. In response, the port authority is working to create new terminal capacity. “Canada’s international trade is growing. The port authority and all those who make up the Port of Vancouver are taking steps to ensure the port will be ready to handle the anticipated increase in cargo through Canada’s west coast,” said Robin Silvester, president and chief executive officer of the Vancouver Fraser Port Authority, the federal agency responsible for overseeing the Port of Vancouver. “This includes partnering with terminal operators to expand and improve operations in preparation to meet the expected increased demand.” Even with the additional capacity provided by such improvements, forecasts from independent experts show it won’t be enough to manage Canada’s future trade demand. This highlights the need for the port authority’s proposed new container terminal at Roberts Bank. The proposed Roberts Bank Terminal 2 Project, which is currently undergoing a review by an independent panel appointed by the federal Minister of Environment and Climate Change, would help realize our nation’s trade potential by providing the marine terminal capacity needed to meet the forecasted demand for trade of goods in containers, serving Canadians well into the future. In other sectors, a bumper harvest in Canada was met with strong global demand for Canadian grain, special crops and other agriculture products, resulting in steady exports through the Port of Vancouver. Combined, dry bulk and containerized grain hit record levels of 27.4 million metric tonnes, with canola and barley each reaching new records for 2018. In fertilizers, potash exports increased 27.6 per cent to record volumes. Cargo in the breakbulk sector, including domestic tonnage, was up 11.7 per cent over 2017 due to strong imports of steel products and increased movement of domestic logs along the . The cruise industry in Vancouver also experienced stable growth as demand for cruises to Alaska continues to increase. In 2018, there was a 5.5 per cent increase in passenger numbers to the Port of Vancouver. Auto sector volumes through the port were steady in 2018, with a one per cent decrease compared to 2017. “Last year’s success is due to port terminals, tenants, railways, marine shippers, truckers, and our government and other partners, all of whom are continuing to invest in response to growing trade,” continued Silvester. “I’d like to thank all of our port stakeholders for their commitment to contribute to a more fluid and efficient supply chain and increased capacity at Canada’s largest port.” https://www.portvancouver.com/news-and-media/news/record-cargo-volumes-through-the-port-of-vancouver-in-2018/

2 The BCMEA Bulletin March 14, 2019 THE NUMBERS

„„ Overall cargo traded through the Port of Vancouver reached a new record of 147 million metric tonnes (MMT), posting a 3.5 per cent increase in tonnage compared to 2017. „„ Total cargo shipped in containers was 26.6 MMT, 2.4 per cent over the previous 2017 high of 26.0 MMT. Overall container units increased by 4.4 per cent in 2018, setting a new record of 3.4 million 20-foot equivalent units (TEUs), including an increase of 3.0 per cent in full container units, a new record of 2.9 million TEUs. „„ Bulk grain was 23.3 MMT in 2018, down 1.3 per cent over the previous 2017 high of 23.6 MMT. „„ Canola volumes increased by 1.9 per cent to 7.5 MMT. „„ Barley volumes increased by 54.4 per cent to 1.8 MMT. „„ Auto volumes decreased by 1.1 per cent compared to 2017, with 424,985 units moved through the port in 2018. „„ Breakbulk cargo was 18.6 MMT, up 11.7 per cent from 2017. Breakbulk forest product ended the year at 12.1 MMT, a 14.5 per cent increase against 2017. Domestic breakbulk log volumes increased by 19.0 per cent in 2018. „„ Bulk dry cargo was 90.0 MMT, up 0.5 per cent from 2017. „„ Bulk Fertilizer volumes increased 16.3 per cent from 2017 to 11.5 MMT in 2018 „„ Bulk Potash volumes increased 27.6 per cent from 2017 to 9.2 MMT in 2018 „„ Bulk liquid tonnage at 11.4 MMT, up 21.9 per cent from 2017. „„ Cruise passengers increased 5.5 per cent in 2018 with 889,162 passengers compared to 842,928 passengers in 2017 on 241 cruise ship visits.

3 The BCMEA Bulletin March 14, 2019

Last year, 131 B.C. workers died from a workplace injury or disease. When you lose a loved one, the pain never goes away. We are all responsible for ensuring our workplaces are healthy and safe.

Sunday, April 28 dayofmourning.bc.ca

4 The BCMEA Bulletin March 14, 2019 B.C. LNG could benefit from new low-sulphur shipping rules jwnenergy.com One of the options for the shipping industry as it scrambles to meet the International Maritime Organization (IMO)’s new sulphur emission caps is to switch to cleaner fuels like methanol and LNG. That could provide new opportunities for B.C., which has abundant natural gas, a developing LNG industry and a major port.

FortisBC would like to see B.C. develop an LNG bunkering capacity – a move that has the support of the provincial government, which has been working with the Port of Vancouver and industry to develop LNG bunkering. That would give the Port of Vancouver an edge, since there aren’t many ports in the world that currently have LNG bunkering. Some cruise and container ship companies are making the switch to LNG in order to meet new caps on sulphur emissions being implemented by IMO in 2020. But the vast majority appear to be taking a wait-and-see approach, opting to simply switch from bunker fuel to diesel, since it requires no major retrofits. The shipping industry faces a conundrum when it comes to LNG as a fuel. For one thing, it may be cheaper to switch from bunker fuel to diesel than to invest in expensive retrofits. The current lack of LNG bunkering worldwide is also a problem. As a consequence, the Canadian Energy Research Institute (CERI) does not expect to see a significant shift to LNG in the international shipping sector, at least in the near term. A recently published study by CERI estimates that only 2% to 7% will switch to LNG. (continued)

5 The BCMEA Bulletin March 14, 2019 B.C. LNG could benefit from new low-sulphur shipping rules (continued) “We don’t see a lot of the conversion going to LNG,” said CERI president Allan Fogwill. “Our estimate is, by 2025, maybe 5% of the shipping fleet will be LNG. And these will all be new.” The other problem for the shipping industry is that in 2050 another IMO regulation goes into effect that will require the shipping industry to reduce greenhouse gas emissions by half. Not even low-carbon LNG may be able to meet those new emission reduction targets, said Robert Lewis- Manning, president of the Chamber of Shipping of BC. “This is where there’s a real debate in the industry,” he said. “How do you plan your fleet out to 2050 – which, in investing in capital assets, is not very far away – considering most people buy ships for 20 years and you know that LNG isn’t going to be enough to get you to those targets in 2050? “So you see a cadre of ship owners that are going to LNG quickly, understanding that by 2050 they’re going to have to retool all these vessels, or buy new ships, for 2050 targets on a fuel that really isn’t understood yet. “I think most people that are experienced are saying there will need to be a technological revolution to get us to those 2050 targets, and that is actually a bigger concern than the switch to compliant fuels in 2020.” Barring a breakthrough in fusion energy, that could mean that the ocean-going vessels of the future will have to use nuclear power, hydrogen fuel cell power or zero-carbon biofuels. https://www.jwnenergy.com/article/2019/3/bc-lng-could-benefit-new-low-sulphur-shipping-rules/ GCT CFO Cheryl Yaremko named as one of BC’s Most Influential Women globalterminals.com BCBusiness released their much-anticipated list of BC’s Most Influential Women this week and our very own Chief Financial Officer, Cheryl Yaremko, was honoured as one of the Most Influential Women in Finance. We are extremely fortunate to have such an innovative leader on our team and proud to have a diverse representation of strong, passionate women across every department at Global Container Terminals. Our thanks to each and every one of you for your contributions and congratulations to all the individuals that were recognized this year. About the Award: Sponsored by BCBusiness Magazine, BC’s Most Influential Women is an annual celebration designed to highlight the province’s top female influencers in science, technology, engineering, and math. To learn more about the award and this year’s Corporate and Entrepreneurship honourees, click here. https://globalterminals.com/cheryl-yaremko-named-as-one-of-bcs-most-influential-women/

6 The BCMEA Bulletin March 14, 2019 Nanaimo’s BC Vehicle Processing Centre: Setting the service bar high bcshippingnews.ca

As 2019 began, the bustling Port of Nanaimo saw the arrival of the first of many shipments of European- made vehicles that will be handled through the 60,000-square-foot BC Vehicle Processing Centre (BCVPC), with distribution to dealerships on Vancouver Island and to Vancouver for dispersal throughout Western Canada. “Including the first ship that will be arriving in February, we are expecting to receive 400 to 500 vehicles per shipment, twice per month, over the course of the first year,” said Ian Marr, CEO for the Nanaimo Port Authority (NPA). He added that the ships will dock at the updated B/C berth at the Nanaimo Assembly Wharf, with new bollards to safely accommodate the larger Pure Car and Truck Carrier (PCTC). The dolphins provide additional anchoring stability at the north and south end of the existing wharf. “These ships have a bigger profile than the regular vessels that come to Nanaimo.” The $19-million project was a joint effort between the NPA, Western Stevedoring and the National Trade Corridor Fund (NTCF) with Ottawa contributing up to $6.3 million. During its development, Transport Minister Marc Garneau was quoted as saying, “How efficiently we move goods plays a critical role in the health of our economy and so this program, called the National Trade Corridors Fund, is a fund of $2 billion and we’re allocating that to different projects that remove bottlenecks and make our transportation system more efficient.” Prior to the BC Vehicle Processing Centre coming to fruition, the European vehicles were shipped to Halifax where they were prepared for the Canadian market, then sent by rail or truck across Canada. Now, the ships will traverse the Panama Canal on their way to Nanaimo. (continued)

7 The BCMEA Bulletin March 14, 2019 Nanaimo’s BC Vehicle Processing Centre: Setting the service bar high (continued) “The BCVPC will be an ongoing economic driver for Nanaimo, employing up to 60 people from the city and creating work for longshore teams, trucking and barge companies,” said Marr, adding that Western Stevedoring will continue to operate the facility while the cars will be driven off the ship and coordinated for distribution by the BCVPC staff. The BCVPC building was set up in one of two existing warehouses on 17 acres of NPA property at the Nanaimo Assembly Wharf. “The structure was repurposed and improved, with new cladding and many other enhancements added,” Marr explained. “The overall allocated space will not only allow for the operation of the business, but also the movement and parking of hundreds of vehicles in transit. If the BCVPC business grows, we have other options for expansion.” Another reason Nanaimo was chosen as the Vehicle Processing Centre was its direct, short-sea connection to the . “There are significant capacity constraints, among other issues, for European Automotive Original Equipment Manufacturers,” said Marr. “With this project, the Nanaimo Port Authority will now be able to utilize their facilities for a new industry and also be an economic driver for business activity on Vancouver Island.” Marr expressed confidence that, as news of the NPA’s most recent initiative spreads, there will be increased interest in the facilities offered in Nanaimo. “People will be able to see that we are a short distance from Vancouver and able to move products to the Mainland easily. We have definitely had more business inquiries, which is really good.” In a previous statement, Port of Nanaimo Chair Michelle Corfield said, “This exciting project is the result of a lot of discussions and hard work that is going to result in economic stimulus for Nanaimo. Projects like this don’t happen overnight and we are grateful for the persistence and vision demonstrated by our Port team and our new tenants.” Ryan McGillis, BCVPC Manager, is looking forward to bringing this opportunity to Vancouver Island. “This new service is exciting for everybody involved in the retail automotive industry in Western Canada. Our goal is to be the highest quality provider to both dealers and manufacturers. We want to set the standard for processing vehicles.” Dave Lucas, Senior Vice President, Western Stevedoring, said, “The auto companies will benefit from an efficient supply chain, avoiding the bottlenecks of Greater Vancouver. Vancouver Island will benefit with the creation of good jobs and economic activity.” He added that Western Stevedoring is eager to see greater industry diversification in Nanaimo. “Our company was founded on Vancouver Island in 1948 and we are very excited to be expanding our business on the Island by bringing this auto operation to Nanaimo.” Prior to the first ship’s arrival, Marr noted one of the NPA staff members travelled with BCVPC staff to Long Beach, California, to observe similar operations. “They moved 1,600 cars in three hours prior to the next stage of processing and distribution,” he said. Chief Operating Officer for the Port, Mike Davidson, further observed that the Cruise Ship Welcome Centre — a state-of-the-art passenger terminal opened in May 2011 — was the first project to initiate light industrial use for the Nanaimo Assembly Wharf. The cruise dock is not used for cargo although it has been utilized to moor barges on occasion and for specialized work on specific BC Ferries vessels. “The advancement of the BCVPC provides another completed stage for advantages provided by this location,” he said. “The right type of project that fits all the parameters takes time to identify, to negotiate with partners, to gain community support and various levels of required funding, all with an objective to provide long-term economic stimulus for the region.” https://bcshippingnews.ca/nanaimos-bc-vehicle-processing-centre-setting-the-service-bar-high/

8 The BCMEA Bulletin March 14, 2019 Climate Smart Case Study: Global Container Terminals climatesmartbusiness.com

GCT Canada’s new cantilevered rail mounted gantry (CRMG) cranes showcase the company’s “Global Commitment” logo, which are placed on new, heavy iron, container handling equipment that are either electric, hybrid, or Tier 4x. These fully electric CRMGs are the first in Canada and the West Coast, and part of the recent $300mm expansion at GCT Deltaport.

Emission Reductions: Zero increase in carbon emissions produced on terminal while volumes increased by 6% – successfully decoupling growth in revenue from growth in emissions Cost Savings: Influenced drayage partners to achieve $5 million in fuel savings Key Solutions: Realizing GCT’s Global Commitment to continue leading the industry to operate more sustainability through continued implementation of initiatives including: • Introducing process and design change, as well as innovative container handling equipment fleet improvements to significantly reduce fuel consumption, idling, and dwell times • Trialing new equipment, processes, and technologies • Investing in lighting and equipment upgrades on major equipment as well as on the terminals • Introducing truck reservation systems • Identifying opportunities for continuous improvement by key Engineering & Maintenance users, as well as through lean-certified in house Operations Excellence team • Participating with the Vancouver Fraser Port Authority (VFPA) in its Energy Action Initiative (continued)

9 The BCMEA Bulletin March 14, 2019 Climate Smart Case Study: Global Container Terminals (continued) The marine sector as a whole contributes approximately 3% of global greenhouse gases, so when Canada’s largest container terminal operator commits to reducing greenhouse gas emissions, the potential for impact is significant. Established in Vancouver in 1907, Global Container Terminals (GCT) is a homegrown private company that has continuously invested in building cleaner, safer, and more efficient facilities. As the largest tenant in the Port of Vancouver, GCT’s marine terminals – GCT Deltaport and GCT Vanterm – are the primary Asia Pacific Gateways for container trade to Canada. GCT Deltaport recently completed a $300mm intermodal yard expansion, increasing rail capacity by 50% all within its existing footprint. As part of its Global Commitment, joining Climate Smart was the next step for GCT to improve its environmental performance while also helping the VFPA to achieve its vision of becoming the world’s most sustainable port. In addition to Climate Smart, GCT is also a leading member of the voluntary Green Marine certification program. GCT involves staff across all levels in the company in the planning and implementation of sustainability initiatives. At the end of this year, nine individuals will have received training with Climate Smart. Climate Smart carbon emissions data management is a key aspect of GCT’s Global Commitment work. Since its baseline year in 2014, GCT Canada has achieved a reduction in absolute emissions as well as a 5.86% reduction per 1,000 twenty-foot equivalent units of throughput, while it continued to grow. Moving forward, the company will continue to explore and implement industry-leading technology to further reduce emissions and improve efficiency. GCT is committed to ongoing Climate Smart certification, and is focused on implementing its sustainability roadmap to ensure continued advancement of its environmental performance. Internal Influence GCT continuously trials and implements efficiency solutions within their own operations, with significant improvements found through both operational densification – which maximizes the use of existing infrastructure – and fleet management improvements, including route optimization and conversion of all its on-dock street vehicles to propane. Further, a wide variety of fleet types at GCT involved a different efficiency solution: • Adopting B10 biodiesel at GCT Deltaport ahead of B5 regulation, resulting in cleaner on-terminal fleet operations • Introducing 8 high-efficiency electric rail cranes as part of its recent expansion, which through design and process change increased rail capacity by more than 50% within its existing footprint, reducing emissions through route optimization and equipment replacement. • Trialing hybrid, auto start-stop technology in yard tractors to reduce fuel consumption and emissions – in partnership with the VFPA as part of its Energy Action Initiative External Influence GCT’s collaboration with customers, port authorities, indigenous groups, industry and community associations, vendors, and suppliers is a key aspect of their sustainability strategy. They continually challenge partners and customers to improve their practices. • Introducing a full truck reservation system that reduces idling time and emissions in street trucks and removes 11,500 tonnes of carbon dioxide annually – or the equivalent of over 2,400 cars off the road – and $5 million in fuel savings. This single operational change means that GCT has influenced a wide supply chain, including trucking companies that transport goods, warehouses that store goods, and even the stores that sell those goods. All along this network, efficiencies were pursued as a result of GCT’s innovative reservation system. The improvement was so significant that GCT USA is the first terminal operator on the East Coast to introduce an expanded truck appointment system in the Port of New York and New Jersey, with plans for full program expansion this year. https://climatesmartbusiness.com/case-studies/global-container-terminals/

10 The BCMEA Bulletin March 14, 2019 Industry News Links VIDEO: GCT Deltaport Intermodal Yard Expansion 2019 https://www.youtube.com/watch?v=nYjwa-kLduQ B.C.’s latest Asia trade mission to focus on Japan, South Korea; skips China https://biv.com/article/2019/03/bcs-latest-asia-trade-mission-focus-japan-south-korea-skips-china Canada’s largest port joins effort on LNG as marine fuel https://www.canadianshipper.com/transportation-and-logistics/canadas-largest-port-joins-effort-lng- marine-fuel/1003379337/ Vancouver terminal expansion happening against a backdrop of increasing land shortage https://canadiansailings.ca/vancouver-terminal-expansion-happening-against-a-backdrop-of-increasing- land-shortage/ China revokes Canadian canola permit as dispute escalates https://www.canadianshipper.com/transportation-and-logistics/china-revokes-canadian-canola-permit- dispute-escalates/1003379300/ Automation plans expose rising ILWU tensions https://www.joc.com/port-news/longshoreman-labor/automation-plans-expose-lingering-longshore-labor- tensions_20190312.html CIFFA Announces Winner Of Young International Freight Forwarder Of The Year https://www.ciffa.com/ciffa-announces-winner-of-young-international-freight-forwarder-of-the-year/ CN recognized as one of Canada’s Best Diversity Employers for a third consecutive year https://www.cn.ca/en/news/2019/03/cn-recognized-as-one-of--best-diversity-employers-for-a-t/ CTA releases report summarizing its rail transportation consultations https://www.canadianshipper.com/transportation-and-logistics/cta-releases-report-summarizing-rail- transportation-consultations/1003379322/ International Collaboration on Ship Emission Reductions (ICSER) https://porttalk.ca/Ship-incentive-collaboration Railway accidents increased seven per cent in 2018 but fatalities fell: TSB report https://www.canadianshipper.com/transportation-and-logistics/railway-accidents-increased-seven-per- cent-2018-fatalities-fell-tsb-report/1003379310/ A Storm Is Gathering Over Container Shipping https://www.wsj.com/articles/a-storm-is-gathering-over-container-shipping-11551612600 Kalmar Sets Out Future of Terminal Operations https://www.porttechnology.org/news/kalmar_sets_out_future_of_terminal_operations#kalmar_global IMO: The vital role education will play in determining shipping’s future https://splash247.com/imo-the-vital-role-education-will-play-in-determining-shippings-future Container lines could learn a lesson in profitability from the airlines https://theloadstar.com/container-lines-could-learn-a-lesson-in-profitability-from-the-airlines/ Shipping Heavyweight Orders World’s First Mega-Container Vessel Retrofit To LNG https://www.marineinsight.com/shipping-news/shipping-heavyweight-orders-worlds-first-mega-container- vessel-retrofit-to-lng/

11 The BCMEA Bulletin March 14, 2019 Tweet of the Week

12 The BCMEA Bulletin March 14, 2019

INDUSTRY EVENTS

CALENDAR April 23-25, 2019 Mari-Tech 2019 Conference and Exhibition Ottawa Conference and Event Centre Ottawa, ON http://mari-techconference.ca/ Apr. 28, 10:30 am Day of Mourning BC Jack Poole Plaza – Vancouver Convention Centre 1075 Vancouver, BC https://www.dayofmourning.bc.ca/ April 29-May 1, 2019 JOC Breakbulk & Project Cargo Royal Sonesta New Orleans New Orleans, LA https://events.joc.com/breakbulk-project-cargo-event June 5-7, 2019 GreenTech 2019 Westin Cleveland Downtown Hotel Cleveland, OH https://www.green-marine.org/greentech/ June 15-19, 2019 World Maritime Rescue Congress 2019 Vancouver Convention Centre, East Building Vancouver, BC http://www.wmrc2019.com/registration-accommodation/registration

June 18-20, 2019 Clean Pacific 2019 Hyatt Regency Vancouver, BC http://2019.cleanpacific.org/

Oct. 8-10, 2018 Breakbulk Americas George R. Brown Convention Center Houston, TX https://www.breakbulk.com/events/breakbulk-americas-2019/

13 The BCMEA Bulletin March 14, 2019 Dispatch Shortage Statistics For the Period Sunday March 3, 2019 to Saturday March 9, 2019

Jobs cut prior Jobs filled thru Jobs filled by Jobs filled by Jobs filled by Jobs left to dispatch employee employee double local 502 transferring unfilled after JOB (unable to fill) extensions shifting employees employees dispatch TOTAL 40 TON 1 1 40 TON & RACK 1 1 BULK OPERATOR 9 6 15 BULLDOZER 1 1 BULLDOZER(SHIP) 2 2 CHECKER (DOCK) 2 2 DOCK GANTRY 18 18 DRIVER 11 2 DUMPER OPERATOR 1 1 F.E.L. 5 5 H.D. MECHANIC 1 1 6 8 HATCH TENDER 1 1 HEAD CHKR 1 4 5 LIQUID BULK 1 1 LOCIE ENGINEER 1 1 MILLWRIGHT 11 2 RUBBER TIRE GTY 11 11 SIGNALMEN 1 1 SWITCHMAN 4 1 1 6 WHEAT SPECIALTY 1 1 WINCH DRIVER 1 1 TOTAL 19 14 43 10 86

How were shortages handled by Dispatch?

Jobs filled by transferring employees, 43, 0.89%

Jobs left unfilled after dispatch, Jobs filled by hall employees, 10, 0.21% 4757, 98.22%

Other, 86, 1.78% Jobs cut prior to dispatch (unable to fill), 0, 0.00%

Jobs filled thru employee Jobs filled by employee double extensions, 19, 0.39% shifting, 14, 0.29%

14 The BCMEA Bulletin March 14, 2019 Vancouver Casual Employee % Dispatched per Dispatch Board

1.2 Last 7 Days 1 Last 30 Days Last 365 Days

0.8

0.6

0.4

0.2

0 A B C T OO R

Future BCMEA Meeting Dates:

Finance & Audit Committee Board of Directors Meeting Meeting May 28th, 2019 April 18th, 2019 8:30am - 11:30am 8:30am - 11:00am 5th Floor Boardroom 5th Floor Boardroom 349 Railway Street Have something for 349 Railway Street the BCMEA Bulletin? Finance & Audit Committee Send your comments Meeting or contributions to May 16th, 2019 the Bulletin’s 8:30am - 11:00am Editor at: 5th Floor Boardroom 349 Railway Street Feedback: Your [email protected]

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