On the Burrard Inlet in Vancouver, tall cranes hoist containers off ships onto the docks of Canada's busiest port.
And there the containers sit.
North American ports try to get boxes from ships to railcars within three days, but at Port Metro Vancouver, which handles more containers than all other Canadian ports combined, only about half the containers make it out in that time. This year, almost a quarter sat for six days or more.
The port's problems are typical of the productivity issues confronting Canada. Facing fierce competition from the United States, Port Metro Vancouver is in the early stages of a makeover aimed at radically increasing its efficiency and opening up an important but little-noticed bottleneck in the Canadian economy. Despite sometimes tense labour relations at the port, it's an initiative that both management and unions say is vital.
"You can't have a container sitting on the dock for a week if Americans can get it off in a day or two," said Mark Keserich, president of International Longshore and Warehouse Union Local 500. "We're in different times. Containers can go through any port. Nobody wants to see the work go to an American terminal."
Last year, $75-billion worth of goods crawled through the port. Moving those goods more quickly would benefit companies across the country, speeding the delivery of merchandise ranging from electronics to running shoes, and ensuring that money isn't tied up in unsold goods in transit.
An improved port has the potential to kick-start Canada's productivity engine, which has stalled in recent years. Canadian productivity has inched ahead by just 0.7 per cent a year over the past decade, according to the Organization for Economic Co-operation and Development.
Higher productivity is vital if Canada wants to maintain a high standard of living and compete against foreign rivals. At Port Metro Vancouver, which battles for business against U.S. ports in Seattle, Los Angeles and Long Beach, Calif., the fight against international competitors is already intense - but until recently no one could even quantify the port's problems.
Dale Thulin, a supply-chain consultant, was brought in by the port in late 2008 to try to tally the situation. He produced his initial report in spring, 2009, showing for the first time that the port was operating far below its potential. "Up until that point, there was a lot of hearsay, but no real hard facts," Mr. Thulin said.
The roots of the port's problem are tangled. The terminal operators that handle containers have a long history of discord with the railways that move the cargo. Strained labour relations with the longshoremen on the docks compound the problems.
At the centre of it all is Port Metro Vancouver, born in 2008 out of the amalgamation of three local port authorities. It is a non-shareholder corporation overseen by a public and private board of directors, which ultimately reports to Ottawa's Minister of Transport. It has little direct power to order changes and functions more as a referee, overseeing the various players that use the port.
Robin Silvester, president of the port since April, 2009, wants 90 per cent of containers moving through the port in three or fewer days, but he isn't predicting how quickly that will happen. "I'm loath to commit to a date, but we're already seeing substantial improvement," he said.
One bright sign is the improving relationship between the operators that unload the containers and the railways that transport them. Flare-ups were common in the past. If a ship arrived late, an operator might be reluctant to bring in extra longshoremen or pay overtime to get containers off a boat in the middle of the night if there was no assurance that railcars would be available for the containers.
Relations took a major step forward in late July, when Canadian National Railway Co. signed a deal with the port's biggest terminal operator, TSI Terminal Systems Inc., to improve on-time arrival and departure of CN's trains, ensure waiting railcars get filled, and reduce so-called "dwell time," a measure of how long it takes cargo to move through the port.
At the heart of the deal is daily sharing of information between CN and TSI, which handles about 70 per cent of the containers moving through port. The two exchange reports on containers that are piling up, as well as available railcars, providing both parties with a near-live picture of port activity.
"If you see [problems]sooner, if you can understand that issues are developing … then all of a sudden you have time to do something different," said Claude Mongeau, chief executive officer of CN. "If you're only looking at what happened last week, and especially if you don't have mutual trust, quickly it becomes finger pointing."
Thanks to the agreement, the old anger between terminal operators and railways is fading, said Eric Waltz, president of Global Container Terminals Canada, which owns TSI. "Right now, the relationship we have with the railways is as good as I've seen it," Mr. Waltz said.
Labour relations with longshoremen remain a hot issue, though, noted Mr. Silvester. Current contract talks are being overseen by federal mediators.
TSI and ILWU Local 500 recently appeared in front of the Canadian Labour Relations Board over a late request for additional longshoreman by the terminal operator after a mechanical problem delayed unloading of a ship. The board found the union left the ship at the dock longer than needed and ordered it to provide better service.
But Mr. Keserich, president of the local, insisted workers are playing a key role in the increasing efficiency of the port, saying longshoremen are setting records by loading more than 30 containers an hour onto railcars, a 20-per-cent improvement over previous levels, thanks to faster cranes and the growing practice of grouping containers aboard ship by final destination, rather than scattering them randomly.
David Ebner