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.
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
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.
A GAME-CHANGER?
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.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.