Disruptors

Port to Prosperity: How Roberts Bank Terminal 2 Is Rebuilding Canada’s Pacific Gateway

Tamara Vrooman: Canada is a country with a large geography, but a small population and so we literally need connectivity and transportation infrastructure to make our country work, and we certainly need that infrastructure to connect our country to the world. Global trade will need reliability. The supply chain disruptions that we have seen as a result of global conflict, pandemic, economic disruption, climate occurrences, that resilience is the name of the game. And so being able to confidently ensure that goods can move through a variety of circumstances is going to be the thing that allows, uh, different jurisdictions to win.

John Stackhouse: Hi, it’s John here, and that’s Tamara Vrooman. CEO of YVR or Vancouver International Airport. It’s one of the world’s top ranked airports giving us her bird’s eye view on Canada’s global trade position.

Tamara Vrooman: So we start with a position of advantage in terms of Asia Pacific trade and traffic. We have the country’s largest port, the country’s second largest international airport, and our proximity to the US border

John Stackhouse: Aounds pretty good so far, but how do we ensure that? As Tamara puts it, we win.

Tamara Vrooman: We need to ensure that we have multimodal access so that if one mode is constrained, another mode can be activated. Our goal is to move faster and more resiliently to more diversified markets. In order to do that, we have the component parts. They’re just not integrated in the way that they could be to allow for that speed and resilience that the international trade market is going to demand.

John Stackhouse: I’m John Stackhouse. Welcome to Disruptors the Canada Project. This season we’re crisscrossing the country to meet the leaders and innovators, making bold moves at a pivotal moment for the country when the shifting tides of trade are forcing us to look both inward and outward to prepare for what’s ahead. Speaking of Tides, today’s destination is British Columbia. It’s the Pacific Gateway. Home to our largest Tidewater shipping ports and for generations, a vital link to our trading partners across the globe. Every day, thousands of ships move across the world’s oceans, and they’re getting bigger. The newest container vessels are more than 400 meters.  That’s four football fields from bow to stern, making them among the largest moving structures ever built. And Canada’s largest port is simply not equipped to receive them. These ships are changing the math of global trade, and if we can’t fit them into our ports, they’re going to go south for Canada.

John Stackhouse: The simple question is, can we keep up? The Vancouver Fraser Port Authority is poised to break ground on a massive new project years in the making. It’s called the Roberts Bank Terminal two or T two. Before we get to how this project is going to happen. Let’s start with the why. We’re walking along Barard Inlet in downtown Vancouver. This area is so rich with natural resources, mountains, forests, oceans. It’s also an incredible hive of human and commercial activity.

John Stackhouse: Devan, we’re staring at a mountain of shipping containers, many of them destined for inland Canada. This port seems like it’s at capacity. Is that correct?

Devan Fitch: Yeah, we’re the size of the next five largest Canadian ports combined in terms of the amount of commodities that we move, uh, through the port of Vancouver.  You know, on the container sector, we are fast running outta capacity and we are forecasting to be short by the year 2030. And if we look at the container ship that’s right in front of us, that’s about a nine and a half thousand TEU ships. So those 20-foot equivalent units, those are those containers on board. We need to accommodate ships that are much, much bigger than that. We’re talking about 24,000 TEU so over double the size of that container ship. The terminals that we’re looking at right here, they were also built many decades ago, and they just don’t simply have the birth depth that’s required. You couldn’t pull up next to the container terminal because it’s just gonna bottom out on the, on the birth face there.

John Stackhouse: So best to keep those large ships away from the downtown core and bring the containers in it by rail. But even then. We’re gonna have a lot of ship traffic out, uh, in the waters with very big ships. Yes. How many more ships can we accommodate?

Devan Fitch: Well, that’s the funny thing about the trade through the Port of Vancouver, we’ve had a significant increase in container trade over the last two decades. So about 4% increase per year. 11% increase, uh, 2024 relative to 2023. And we’ve achieved that not by having more ships. But by having bigger ships with a higher percentage of the cans on board being pulled off or put on at Vancouver. And so that’s a trend that we see continuing into the future. So it’s not about more ships, it’s about much bigger ships coming.

Devan Fitch: And if we want to attract those shipping lines and be able to move Canada’s products and avoid having Canadian trade moving through US ports, we need to build big and we need to build now to accommodate that and attract that.

John Stackhouse: So the port in Burrard Inlet, its Vancouver’s inner Harbor, is already at its limits. Fortunately, Canada’s next chapter of trade is being expanded about 35 kilometers southwest at the mouth of the Fraser River Delta lies Roberts bank. It’s where the Vancouver Fraser Port Authority plans to build T2. Devan Fitch has spent years advancing the project. So after our walk, I sat down to pick his brain about what it takes to get something of this scale off the ground. Tell us first how you got into infrastructure and ports more specifically.

Devan Fitch: I started off as an engineer designing bridges and decided that I didn’t want to focus all my time working with computers, figuring out how much steel to put in a concrete column, and then moved over to, uh, project delivery. So that was a role with the local municipality here, figuring out where do we place bridges, not just how much steel do we put in a bridge, but where should it be? How do we marry the interest of community, the economic considerations? And through that was exposed to transportation more generally. And uh, the Vancouver Fraser Port Authority seemed like an excellent marriage of commercial competitiveness, operating uh, in competition with other ports and serving the public good as well with public infrastructure.

John Stackhouse: Most Canadians probably take the Port of Vancouver for granted, even though wherever you are in the country, if you look around at least some of the stuff in your life, pass through this port.  Give us a sense, Devan, of the magnitude of the Port of Vancouver and what it means to the Canadian economy.

Devan Fitch: I think the, the simplest way to wrap your mind around that is that if you take out of the equation all of the trade that we do with the US and you think about the trade that we do with the rest of the world, $1 in every $3 of trade passes through the port of Vancouver that’s supporting businesses right across Canada, consumers, right across Canada. We happen to be located in Vancouver, but we are very much Canada’s port.

John Stackhouse: As I understand it, the Port of Vancouver is the size nearly of the next five biggest ports in the country. So, it is by far the biggest, and Roberts Bank will enable it to grow by another 30%, is that correct?

Devan Fitch: Yeah, it’s somewhere between 20 and 30% depending on the, on the basis that you take.

John Stackhouse: So just what does 30% bigger actually mean in terms of new infrastructure? I asked Devin to give us some idea of the size of the place.

Devan Fitch: It’s a proposed new 2.4 million TEU, so 20 uh, foot equivalent unit container capacity terminal that in one fell swoop will increase capacity on the west coast of Canada by approximately one third.  It’ll allowed 135 hectares of, uh, new waterfront trade, enabling industrial land in one of the most industrial land constrained regions of North America. To give you a sense of scale of T two, I can’t help myself. Uh, 12 million cubic meters of sand and 4 million cubic meters of manufactured rock. And to put that in perspective, uh, on the sand side, that’s about, uh, 2,500 Olympic sized swimming pools.

John Stackhouse: Sounds enormous, but how does it compare to the world’s mega ports?

Devan Fitch: It’s big for Canada. It is modest in size and scale as you compare to some of the, the, the largest ports around the world in Asia and, and, and Europe. But certainly, a step function increase for for Canada. And, and, and our hope is that it’s the first step of, of us having more ambition to get big projects built, uh, where we both protect the environment and support the economy.

Devan Fitch: It will provide capacity to move a hundred billion dollar’s worth of trade goods every single year and support over 17,000 supply chain jobs across the nation.

John Stackhouse: Give us a sense of how the port business is transforming and what opportunities there may be for Canada to move up in the competition leagues.

Devan Fitch: Right now the world’s biggest container ships are about 24,000 foot equivalent units. They’re applying their trade from Asia to Europe, and we see shipping lines cascading those large ships onto the North American, uh, roots as they age. And so we’re expecting as we move forward to see a significant increase in the size of ships, calling it the Port of Vancouver.Right now the average size is around 10,000 TEU and we’re building Roberts bank terminal two to futureproof it to be able to accommodate ships as large as 24,000 TEU.

John Stackhouse: So those giant ships that we probably see on YouTube, uh, that seem mind-boggling yes. Uh, are largely for Asia to Europe, and now they’re gonna be deployed more to Asia, to North America.

Devan Fitch: Yeah. Over time, because the volumes of trade are highest on that Asia to Europe, uh, route because of the, the population centers and density. Then as ships age, they move them off that route over to the North American route. But as demand grows and shipping lines look to achieve economies of scale, those bigger and larger ships are gonna start coming to the west coast of North America, and we need to enable that.

John Stackhouse: Devan sees building the infrastructure to receive these new mega ships as nothing short of a critical nation building project.

Devan Fitch: We are literally building more Canada and we need to build it at a size and scale that is competitive and attractive on a global stage. Canadian consumers benefit because we’ve got an efficient supply chain bringing those goods in a cost effective way, and our exporters that are looking to get Canadian products on those ships heading back to Asia, have access to those containers. If we don’t build that infrastructure, those shipping lines are gonna look to go to other ports potentially in the us and I don’t think it takes much imagination to picture the consequences of having Canadian trade dependent on US ports given today’s climate.

John Stackhouse: Fair point. So now that Devon’s explained the why, I wanted to get the answers to questions like, how are we going to get this built and where exactly are we going to fit this giant terminal Roberts bank?

Devan Fitch: The proposed site for T2 sits just outside Vancouver in a sensitive coastal estuary. If you zoomed out on the west coast of Canada and you had to decide where would be the most appropriate place to put a container terminal, it’s right down in this Roberts bank area. It’s very close to deep sea shipping lanes. It has excellent, uh, railway service, highway roadway service. It’s got a population center that can provide labor, but that it isn’t so close that it’s located in this dense urban core. There are no bridges that ships need to pass under. It just so happens that that area is also one of Canada’s most diverse and rich ecological systems across the nation.  And so for us, when we look at trying to build a really big project that quite frankly, again, Canada hasn’t had the appetite to build a marine infrastructure project of this nature for several decades. We need to marry. How do you get a big project like that built in a cost effective way? While maintaining compliance and protection of the environment and considering the needs and interests of local First Nations.

Devan Fitch: So bringing that all together to deliver a project on time within budget that’s cost competitive to attract the terminal infrastructure investment that’s top of mind for us.

John Stackhouse: No easy feat, especially when you, uh, suggest it has to be done on time and on budget. What are some of the ambitions for the terminal that Canadians may want to appreciate?

Devan Fitch: Well, this terminal, once complete, will have the deepest berths of any container terminal on the west coast of Canada. It’s also gonna have significant on dock railway service. A, a big component of Canada’s competitive advantage is those class one railways that provide access from the water’s edge all the way through Canada to those deep population centers.

John Stackhouse: You’ll have to do some dredging to make, uh, more space for the ships. What’s required in this day and age to dredge, especially in an ecologically sensitive area like this?

Devan Fitch: Yeah. So just to give a sense of scale, um, the existing kind of births at the Port of Vancouver are up 15 meters deep out at Roberts Bank. We need to be over 18 meters deep for the birth face. But we need to also dredge, um, uh, 10 meters below that roughly to put in a layer of mattress rock to sit underneath these giant concrete caissons. These caissons are huge. They’re about the size of an eight-story apartment building, and there’s 32 of them that we’ve gotta float over and sink to create this, uh, this birth face.  And so for us, you know, considering the size and scale, uh, but also the environmental sensitivities, uh, we are working with Canadian scientists and, uh, engineering consultancies to come up with novel technologies to monitor in real time the presence of, um, species such as Echelon, uh, also known as Candlefish.  Very high significance and importance to local first Nations.

John Stackhouse: Incidentally, they’re called candlefish for a reason. They’re so oily. A dried one can literally burn like a candle. When they return to spawn, they bring a powerful pulse of nutrients to the rivers, feeding all kinds of other creatures like seals, eagles, and bears.

John Stackhouse: The Port of Vancouver has had to get creative to protect this keystone species. They’re actively networking with local tech companies to develop and deploy new underwater technology to keep tabs on them. So yes, they’re tiny fish, but they matter.

Devan Fitch: As we’re dredging, we can monitor in real time for the presence of Echelon and slow down or stop when they come in close proximity. Now, it’s critically important that we get that technology right because I’m sure you can imagine the cost and schedule impacts of false positives. Slowing down production on a big project like this. So trying to deploy new novel technology. Um, it might sound simple. It sounds like a fish finder that you get on a recreational fishing boat, but it’s a fish finder on steroids and it’s a new technology that hasn’t been deployed for real time monitoring before.  So that’s a first for us and a, and a first for the industry.

John Stackhouse: And a great opportunity for Canada to develop these sorts of technologies that we can then export to other ports, but other use cases around the world.

Devan Fitch: Yeah, we’re, we’re certainly prioritizing made in Canada products, um, Canadian businesses to trial and deploy these technologies, uh, on T two and it’s certainly, we will certainly do moving forward as well.

John Stackhouse: So besides developing new technology for fish monitoring, what else is support doing to ensure First nations and environmental issues are considered?

Devan Fitch: We’ve worked in close collaboration with First Nations for well over a decade. Unfortunately, it’s taken Canada over a decade to, to give regulatory federal environmental approval of the project.  We started around 2013 and, got that approval in 2023. One of the most robust environmental approval processes ever undertaken in Canada. As part of that process, we consulted with over 51st Nations and, uh, secured the consent of 27 First Nations through, uh, mutual benefit agreements. And so through the planning, uh, for the design of the terminal and then also the approach to construction, we’ve incorporated indigenous knowledge to work together with what we call western science to come up with, um, a approaches to construction, approaches to monitoring of key species.  That, uh, recognizes the importance of this environment to First Nations and to mitigate and, um, uh, manage the construction of a very large infrastructure project in a very, I’d say, sensitive and important, uh, diverse ecosystem.

John Stackhouse: Another key issue for the port is turnaround time. The longer it takes to load or unload, the less profitable the product.

John Stackhouse: Devan sees the T2 facility as a chance to streamline operations. He says Canada needs to boost port efficiency and capacity, and we need to do it fast.

Devan Fitch: If we look at the time horizon, you know, we’ll start construction in 2028. That terminal won’t be operational to 2035. That’s five years late relative to Canada’s need. Canada is projected to run out of container capacity in 2030. So the question isn’t, will we run outta capacity? It’s how long will we be short of capacity, and how problematic will that be for the supply chain?

John Stackhouse: It’s concerning that we’re going to have at least a five year gap between when we hit capacity and when more capacity comes on.  What might the consequences of that be? What do we need to think through in the interim?

Devan Fitch: Yeah, I, I, I would say that, you know, the supply chain crisis that we had, the pandemic, I should say, that we had a few years ago is unfortunately a bit of a, I would say, a data point of what we can expect. So Canadian businesses are gonna, need to start to look at ordering ahead of time, looking at resiliency in their supply chains. And so for us as a port authority, our focus is on what can we do to accelerate T2? Is there a way that we can get it getting constructed faster, get it in our operational faster? And what are some things that we might be able to do to get more juice outta the lemon, if you will, for some of our existing terminals to kind of bridge that gap?

John Stackhouse: Despite the extensive consultations, as you’ve heard, it still took a decade for federal approval. That’s exactly the kind of holdup Canada simply can’t afford under today’s pressurized trade conditions. To learn more about why we’re in this situation and about where things stand now, I spoke to Peter Xotta, he’s Devan’s Boss and CEO of the Vancouver Fraser Port Authority.

John Stackhouse: Peter, where are we at in terms of T two and how can we move more expeditiously?

Peter Xotta: You know, we’ve talked a lot about major projects in this country and how difficult it has been over the course of the last decade or two to get major projects done. Roberts Bank, terminal two is in a unique state of readiness for this point in time in Canada’s trade history. We have federal approvals, we have provincial approvals. We have the support of many First Nations for the project, and we’re now poised to make a final investment decision to move the project forward. So. Projects like this don’t happen overnight. It will be sometime five years of construction to make it happen.

Peter Xotta: But it’s important both to make sure that as our economy continues to grow and when economies grow, they require the things that are shipped into and out of the country via container. It’s important for us to move forward with that project to make sure we have the capacity, but also at this unique point in time to signal to the world that Canada is prepared to make tough choices, to get things done, to make sure that we can continue to play that important role in the Canadian economy.

John Stackhouse: When you say signal to the world, who’s watching and what are they wondering?

Peter Xotta: Well, it comes to the role that Canada has been playing with respect to, uh, providing agriculture, forestry and minerals, uh, critical minerals to the world as we continue to grow our capacity to produce those things. The question fundamentally is. Can you get your stuff to us? And, uh, investments in the supply chain are what’s important. Frankly, we’ve had a couple of years of challenges, uh, with respect to supply chain stability, some of that driven by geopolitics, some of it by, uh, virtue of, uh, labor discord, uh, that has happened over the last couple of years.  Now’s the time for us to settle that down, particularly in the context of our discussions between Canada and the United States. Our national imperative has been to pivot, to make sure that we reduce our dependence. Thankfully, we have trade relations with many countries around the world. It’s about us supporting the companies that do that business and growing that business.

John Stackhouse: Ports, of course, don’t exist in isolation. They’re connected to other infrastructure, rail and road, especially in this country. How would you evaluate the state of rail and road, particularly to expand with the port expansion here?

Peter Xotta: Yeah, I’d say, look, there is a, uh, an infrastructure deficit across North America because a lot of the capacity that was created 40, 50, or 60 years ago has now been consumed or is coming to the end of its useful life.  That said, in the time that I’ve been working at the Port Authority, we’ve just about doubled our volume of international trade through this gateway, so I’m optimistic. That we can and will find ways to do that, but it takes a determined kind of corporate and national strategy around trade, supporting the industries that need to make those investments.

John Stackhouse: When you look at other world-class ports, Rotterdam and Singapore, as examples, what should we be aspiring to do?

Peter Xotta: We should be aspiring to do what works for Canada. And so when you look around the world, what happens in Singapore, what happens in Shanghai, or frankly, what happens in Rotterdam isn’t necessarily the formula for what will work in Canada.  I say when you’ve seen one port, you’ve seen one port because there’s a unique alchemy in every port given the types of cargoes that it handles. For example, in some ports like Singapore, it’s largely containers. The west coast of Canada is. Predominantly bulk commodities, the coal, sulfur, potash, and other commodities that are exported, and particularly agriculture products.  Containers is an important part and a growing part of our business that we need to manage. And along with investments in RBT two come the opportunity to bring new technologies, new methods of handling. To make sure that we are competitive, uh, globally, and that we’re productive as a supply chain. So that’s what I’m excited about, is defining what that place will look like, that we’re trying to, to get to, and then getting on with moving down the path.

John Stackhouse: And of course, despite two mountain ranges, Canada’s west coast is connected to the rest of the country by rail and highway. And according to Tamara Vrooman, we need to start thinking more about greater connectivity for greater profit and for the common good.

Tamara Vrooman: We have some of the best trade and transportation providers in the world. You know, the airport that I’m privileged to to lead regularly gets ranked as the best in North America and one of the best on the planet. The same is true for other parts of our transportation and trade system. The problem is, is that they’re each independently strong but not adequately connected, and a lot of that has to do with. Data sharing with systems, with allowing this to be a truly integrated platform that moves goods and as I said, is agnostic as to the mode that requires a change and a shift in terms of how we share data, in terms of how we make decisions, in terms of making sure that we’re mobilizing the invested capital and the strength that we have in service of.Ultimately the same goal, which is moving goods versus moving goods via our own platform.

John Stackhouse: Figuring out where we’re headed as a country isn’t so simple, and it’s easy to get tangled in the details as we imagine the future of trade. But watch those containers, the cans as they’re called, moving in and out of Vancouver’s harbor for a while, and you’ll start to see it.

John Stackhouse: Clearly. There’s a huge opportunity here, not just for Vancouver, but for all of Canada. Here’s Devan Fitch again.

Devan Fitch: At its most simple level, there’s a trade balance there where a can comes here with something for import and if we don’t have something to put in that can, going back, it’s empty, it’s going back empty, it’s, we’re basically exporting air and that’s a lost opportunity for Canada.  It’s a lost opportunity for the shipping line because they can make a fee if it’s a loaded container. If it’s not loaded, they’re just taking it back to try and recycle it quickly. So really there’s a great opportunity for us to, to put more Canadian products in those containers and send them to markets overseas.  The world increasingly is looking to trade with Canada as a stable trading partner, and we have a very excellent opportunity there. There’s no shortage of things that we can put in there. We just need to explore it and take advantage of it. The demand is there. Shipping lines want a call at the port of Vancouver.  We just don’t have the births to accommodate additional ships. T2’s gonna provide three new births that are, can accommodate the biggest, largest, most cost effective ships. We will build it and they will come and Canada will prosper.

John Stackhouse: Pretty simple. Get our act together is the, uh, the message from the world and T2.  Not just a great movie, but uh, an opportunity for infrastructure for the country. Devin, thank you for being on disruptors. Thank you for having me. Looking out over Vancouver’s Bur Inlet with container ships loading and unloading goods from across Canada. And the world is clear that T two at Roberts Bank can be a game changer.  It’s a chance to enhance Canada’s trade story with the Indo-Pacific at a moment when it matters most. But only if we act together, investing with a sense of shared purpose. After all, this is a country built on ambitious infrastructure projects, including that mighty railway that connects this port with the rest of the country.

Tamara Vrooman: Who gets infrastructure built and who doesn’t is one of the most powerful determinants of the future that we wanna create. And so making those investments today. Like were made generations ago with the St. Lawrence Seaway and with other pieces of major rail, marine road and air infrastructure that were thought to be audacious and bold at the time really helped to build economic health of this country. And we can do so. Again, we just need to do it in an integrative way,

John Stackhouse: Build infrastructure in an integrated way. Those are words to live by. Whether that means integrating indigenous knowledge into how we build or sharing data across systems to increase efficiency. A port is not just a port, it’s part of an economy and a big part of a country.

John Stackhouse: And when it comes to deciding what to do next, Canadians need to listen to what global markets are telling us. And right now, at least part of what they’re saying is look to the west so we can ship to the east. This has been another episode of Disruptors, The Canada Project, an RBC podcast. Check out the rest of our series and subscribe to meet a nation of innovators who are riding the next wave of trade and technology.

John Stackhouse: I’m John Stackhouse. Thanks for listening.