A "Vancouver" by any other name
The Washington seaport suffers from identity confusion with its Canadian namesake. But a big rail access project could set it apart while reshaping the transportation landscape.
As most of the world sees it, if you are called "Vancouver," you are either in Canada or you're nowhere.
It's a perception that Curtis Shuck, director of economic development and facilities at the Port of Vancouver in the United States, combats every day. Never mind that it is Washington state's third largest seaport after Seattle and Tacoma. Or that it celebrates its centennial this year. Vancouver U.S. still suffers from comparisons with its neighbor to the north.
Asked if his port in Washington's southwest corner has a relationship with its counterpart in British Columbia, Shuck jokes, "We do, but it's mostly by mistake." He acknowledges that it's been something of a struggle to convince global businesses that there is another Vancouver-based transport logistics hub in North America.
"There is some confusion in the international markets," he says. "Everyone seems to know where the other Vancouver is."
Despite that, Shuck sees his port winning its fair share of battles with Vancouver, B.C. "Vancouver, B.C., has significant capacity constraints at this time," he says. "Increasingly, international businesses are seeing that there is an alternative. And it's here."
Located along the mighty Columbia River, Vancouver U.S. focuses exclusively on the handling of bulk commodities. Its stock in trade is agricultural products such as wheat, corn, and soybeans flowing from the U.S. heartland and the Canadian prairies.
The port is home to what will become the West Coast's largest grain storage elevator, operated by United Grain Co., a unit of Japanese giant Mitsui Trading Co. The elevator, which is completing an $80 million expansion, processes about 16 percent of the nation's wheat crop.
The port has established a growing position in industrial commodities like bulk minerals and copper concentrates. It handles about half a million tons of scrap steel each year. In addition, Vancouver is ramping up its project cargo capabilities to support domestic and international energy projects, including the shale oil boom in the U.S. Great Plains and in western Canada.
In total, the port handled 5.6 million metric tons in 2011, which still makes it far from the biggest player around. For example, the Port of Houston handled about 15.6 million non-metric, or "short," tons of bulk and breakbulk cargo last year. Shuck said Vancouver's tonnage is growing at an annualized rate of about 5 to 10 percent. Exports account for about 85 percent of the port's tonnage.
Vancouver steers clear of containerized traffic, leaving that business for the Port of Portland, Ore. The two ports, a stone's throw from one another, have a longstanding agreement to avoid the other's sandbox. "We try not to poach each other's business," says Shuck.
CHOKEPOINT NO MORE
But what will elevate Vancouver U.S. in the eyes of the global supply chain is not the business it may capture from the Canadian port, or in the future of its relationship with Portland. The U.S. port is staking its future on a plan to open up the Pacific Northwest, and by extension a chunk of the western United States, to faster rail service for the bulk shippers that rely on the Burlington Northern Santa Fe Railway (BNSF) and Union Pacific Corp. (UP), the country's two western railroads.
The port is seven years into the largest capital project in its history, a $275 million, 21-phase endeavor designed to improve freight and passenger rail access to its five-terminal facility. By the time the project is completed in 2017, the port will be transformed into a major rail hub whose capabilities will create a ripple effect stretching as far east as Chicago and as far south as Mexico, local officials maintain.
The project, being developed along the city's western side abutting its waterfront, will create a new gateway to the port and end the traffic congestion that has long plagued the main lines operated by the BNSF and UP. To augment that effort, the port is working to modernize the rail network inside its facilities to improve access for all of its tenants.
To accomplish the former, the port has engaged in an industrialized form of "rearranging the furniture." Today, most of the unit trains originate in the eastern United States and enter Vancouver via a BNSF-operated east-west rail line. However, a lack of infrastructure capacity and a plethora of local intersections and grade crossings have created significant congestion for trains, trucks, and automobiles. These bottlenecks have slowed velocity and throughput for unit trains entering the port, according to Shuck.
In 2007, Vancouver launched a "grade separation" initiative for a new rail entrance that will bring trains into the port on a structure built below the existing main lines. The reconfiguration will eliminate the chokepoint where north-south and east-west main lines currently meet. Access roads will be elevated or lowered to create clear paths for trains moving westbound, while allowing trains moving in a north-south direction to continue to flow freely.
The new entranceway, set for completion by the end of 2015, could have a profound impact on train speeds and productivity, port officials said. Citing a study by MainLine Management Inc., a business and transport services firm, Shuck said the modifications would reduce train delays into the port by up to 40 percent. The project is expected to more than triple the annual train throughput to 160,000 railcars a year from the current 50,000 cars, he said.
In addition, the infrastructure expansion will make Vancouver the first port in the nation to handle a unit train as long as 8,400 feet, according to Shuck.
The increase in velocity and handling capacity will be felt across the western rail system by accelerating the flow of traffic connecting the BNSF and UP main lines in the Pacific Northwest to hubs in Chicago and Houston, as well as from Canada to Mexico, the port said. Shippers will benefit as delays and long dwell times are significantly reduced, officials add.
"This is a game changer for us, the region, and a large part of the U.S. rail network," Shuck proclaimed.
The improvements will broaden access to the port for UP and BNSF, thus making the port more marketable as a hub of global commerce, according to Shuck.
The project is being paid for by port revenues, federal funding (including $15 million from the government's high-speed rail program), and investments from some of the port's deep-pocketed tenants. BNSF, which accounts for about 80 percent of the rail volume at Vancouver U.S., donated rail assets valued at about $6 million, according to Suann M. Lundsberg, a BNSF spokeswoman. The railroad also sold land to the port in 2008 and 2009 to support the expansion, she said.
Lundsberg said in an e-mail that the project would attract tenants to the port that might not otherwise have thought of locating there. She added that the Vancouver community at large would benefit through improved access for passenger rail, trucks, and motorists.
The project is a "great example of how railroads can work with cities to accommodate growth as well as community needs," Lundsberg said. Tom Lange, a spokesman for UP, declined comment on his company's plans at the port.
Shuck is aware that BNSF currently butters the port's bread, and that it and its customers stand to gain the most from the improvements to come. Yet he is confident the project will draw greater interest from the UP as it comes closer to fruition.
And like any good business development executive, he is unfailingly diplomatic. "We maintain excellent relations with both railroads," he says.More articles by Mark B. Solomon
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