Good morning.
Thank you for requesting our appearance today on your study of the status of shipping containers in Canada.
My name is Daniel Robert Gooch, president of the Association of Canadian Port Authorities, and I am joined by Debbie Murray, senior director with the association, Policy and Regulatory Affairs.
We represent the 17 Canada port authorities that move most of Canada’s international cargo and operate at arm's length of government to manage federal port lands. The rail companies, trucking companies, vessel owners and operators and terminals are key partners for ports within the supply chain.
Containers revolutionized shipping when they were introduced over 70 years ago and have become the standard multi-purpose mechanism for transporting goods and commodities from hinterland to port to vessel/multimodal.
Given the centrality of containers to shipping, when there are broader system impacts and trends to shipping, this can have significant impacts on container movements and availability. COVID-19, geopolitical issues and labour challenges are examples of factors that have caused challenges with container supply.
We have all heard stories of containers delayed or a shortage of containers. With the increased use of containers for grain and other formerly bulk exports, container shortages now also affect Canada's exports.
In Canada, container movements are dependent on rail and truck movements, and the intermodal connection with vessels at Canadian ports, where backhauls of both filled and empties ensure continued movement of containers to destinations for loading and unloading.
We are hearing from our members that intermodal capacity in supply chains remains under pressure, particularly for containerized cargo. While Canadian ports are not experiencing as much congestion as those in the U.S., average wait times have increased and there is a domino effect. Many importers have been delayed in taking possession of their goods.
Similarly, storage and floor space for containers is scarce. As a result, the railroads have been forced to prioritize less congested corridors. For example, the Port of Montreal tells us it has had to deal with a backlog of containers on the ground, sometimes with an average dwell time of up to 40 days. The port became an open-air warehouse, with almost 12,000 containers at one point.
You will hear from Port of Vancouver about the increasing number of vessels that have had longer waits at anchorage because of container movement or availability delays.
What can be done to relieve pressure and build a responsive, safe, secure and reliable supply chain, and ensure that container supply and movement continues to be reliable in the years ahead? The national supply chain task force report, released earlier this month, yielded many excellent recommendations that could address container movements, including immediate regulatory and policy changes to address congestion and inefficiency; digitalization and supply chain visibility; support for enhanced port financial flexibility; and a long-term, future-proof transportation supply chain strategy.
Our country needs such a strategy, one that incorporates a multi-stakeholder approach to ensuring that current and future capacity and reliability are there for Canada, and one that factors in climate change and other shocks to the system. We understand that the development of a national strategy is part of Minister Alghabra's mandate, and so we look forward to understanding more about the government's plans in developing this strategy.
A key part of it must be supply chain visibility: knowing where the goods and containers are and where the bottlenecks and available capacity are. This visibility relies on digitalization and data governance. We have the tools and the data, which we see as our ports' and industry players' pilot digitalization and visibility initiatives. We also look forward to understanding more about the $136-million federal digitalization initiative announced last Friday.
For ports specifically, there are elements we are hoping to see in Minister Alghabra's coming work on ports modernization and amendments to the Canada Marine Act to allow Canadian port authorities to more nimbly fulfill their role within supply chains.
Financial flexibility, through the ability to access interested private capital to build port projects and invest in optimization, is key, as is permanent national trade corridor funding. The ability of ports to purchase land off-site for the establishment of secondary sites for the movement of containers would also enhance local and regional efficiency, and accelerated port projects through the impact assessment process would also assist the development of physical supply chain infrastructure.
There is other low-hanging fruit that could help. The United States allows for en route customs clearance of containers, which allows containers to be moved into the U.S. prior to their formal release. Canada does not have the same practice. Harmonizing with the United States on this could facilitate movement.
Canada Border Services Agency's sub-location container policy could also be updated to allow for containers to be moved to another location for clearance from their initial point of unloading.
Containers will continue to be used to move manufactured goods into the country and move commodities out of Canada's ports. We have an opportunity with all the focus and collective thinking aimed at supply chains and container movements today to ensure that this continues in a reliable, innovative, safe and secure manner for decades to come.
Thank you.