VANCOUVER, BC—Importers and exporters in western Canada have been whacked with millions of dollars in unexpected costs as a result of a work stoppage at Port Metro Vancouver earlier this year.
They’re angry and frustrated, and they want the situation addressed. Some say the charges will mean a financial loss for their companies this year. There is also concern that this move will undermine Canada’s competitiveness and reputation as a trading nation.
The three terminal operators at PMV—wo are owned by foreign corporations, and the third is owned by an Ontario pension plan—are demanding these Canadian businesses pay storage fees for the time their shipping containers sat at the facilities, even though there was almost no way of moving the goods out of the port because of a work stoppage by truckers.
Storage fees escalated the longer the containers were sitting at the port, increasing to $400 and more a day per 40-ft container. The Canadian International Freight Forwarders Association (CIFFA) estimates that, with thousands of containers stuck at the terminals over the course of the 28-day strike, the total fees being levied by the PMV terminal operators could exceed $20 million.
On behalf of its members’ clients, CIFFA is seeking a rollback or refund of these charges. Its 250 member firms manage international shipping services for thousands of small and medium-size importing companies being forced to pay these costs.
“For almost a month, very few containers were being moved. They just kept piling up. It wasn’t the fault of the importers and exporters, they were the victims. Yet not only were their shipments delayed, they’re also being forced to pay storage costs,” said Ruth Snowden, executive director of CIFFA.
“It’s ludicrous. It’s adding insult to injury, and the terminal operators should do the right thing by dropping these charges,” Snowden stated. While at least one terminal operator has offered a modest discount on fees, the costs are still staggering. “Under the Canadian Marine Act, the port is supposed to operate in the economic interest of Canadians. That’s not happening here.”
The three terminal operators at Port Metro Vancouver are: Deltaport and Vanterm terminals, operated by TSI Terminal Systems Inc, which is owned by the Ontario Teachers’ Pension Plan; Centerm is operated by DP World, a company based in Dubai; and Fraser Surrey Docks is operated by Fraser Surrey Docks LP, owned by Macquarie Infrastructure Partners, part of the Macquarie Group of Australia.
According to a recent CIFFA survey of its members, companies are having to pay an average of around $3,000 per container in extra costs. That can really add up. The Brick had 129 containers stuck at the docks, and was billed nearly $500,000 in storage fees.
Jim Caldwell, president of The Brick, said it was reasonable to expect some increased costs as a result of the strike, but “these costs should not be passed on and borne entirely by shippers like The Brick and ultimately consumers.”
Garry Mooney, CIFFA director, noted that “the impact on the economy, jobs, and consumer prices is going to be felt across western Canada and particularly in BC.”
While the terminal operators may profit in the short-term by charging these fees, the long-term result may be a loss of business as importers and exporters find other shipping gateways such as Prince Rupert, Tacoma, and Seattle.
“That’s not something we want to see. We want a vibrant, efficient and sustainable port in Vancouver. But penalizing Canadian importers for a situation that was out of their control is hardly the way to build customer loyalty,” said Mooney.
Martin Moin, President of freight forwarder UE Canada Inc., noted that “already our clients are considering moving to other ports of call.”
Kevin Ho, director of forwarder DB Schenker, said, “The tariff is designed to get containers off the dock. It was never intended to be used to punish importers and exporters caught with their cargo stranded in the port during a labour dispute. The imposition of the storage fees is unfair.”
Gilbert Chang, President of ACE/All Cargo Express, said his clients have lost a lot of money without having any control or power over the situation. “Some of the smaller companies that were hit by these fees are not making any profit this year and have to have cuts company wide.”
CIFFA urges the terminal operators at PMV to reconsider, rollback and refund these storage fees. CIFFA will be working with its members, its members’ clients, other associations and stakeholders, and governments at all levels to achieve fairness.