I wrote this magazine article about the Port of Vancouver, including an interview with chief executive Gordon Houston, for Asia Inc. magazine earlier this year:
Captain Gordon Houston, President and CEO of the Vancouver Port Authority, is looking to Asia’s fast-growing economies as the engine for continued growth at Canada’s largest port, as well as Canada’s most westerly province of British Columbia.
The port fits prominently into the government of Canada’s “Pacific Gateway” strategy, fostering ramped-up trade linkages between Canada’s West Coast and Asia, and strengthening Canada’s position in international commerce.
Collectively with other terminal operators, labor unions, railways, and other transportation bodies, the port is building the necessary linkages to make Vancouver, and by extension British Columbia, a competitive and efficient port environment.
“Vancouver is the gateway into Canada for Asia-based goods,” says Houston. “We’ve been very successful at that. 95 percent of Canadian cargo (to and from Asia), comes through Vancouver. That is a significant amount of cargo.”
With that being said, Houston’s ambitions are clearly global. The port is a huge player by global standards: In North America, the port ranks number one in total foreign exports, and along North America’s West Coast, it ranks number one in total cargo volume. In total, the Port of Vancouver trades $43 billion in goods with more than 90 trading economies annually.
Not that things have always come easy for the B.C. port.
Houston notes that the ramping up of two-way trade (in addition to importing numerous goods manufactured in Asia, Canada also exports a high volume of raw materials to China, Japan and other countries in Asia) at one point posed a challenge for the Vancouver port.
“Two years ago, it put quite a stress on our port, and our ability to handle that kind of growth was in jeopardy for a while,” he says.
The situation has since changed. “We are now able to handle the growth in China and the rest of Asia, and we have the environmental approvals to expand our facilities.”
“For the first time in our history, this year we will have handled 2 million TEU (twenty-foot equivalent units),” he notes.
All the while, he emphasizes the importance of smart growth for the port and surrounding infrastructure in Greater Vancouver.
“It’s partially infrastructure, but it’s also efficiencies,” he says. “We have driven many efficiencies into the system.”
Like other global ports, the Port of Vancouver is dealing with its own ownership structure changes. In late November, the Ontario Teachers’ Pension Plan announced that it had signed a US$2.35 billion agreement with Orient Overseas of Hong Kong to acquire the operating rights for two Port of Vancouver container terminals (as well as one in New York, and one in New Jersey).
Houston is quick to point out that much of the media fanfare over port ownership changes in North America and Asia is simply misled.
“One of the misconceptions is that ports are selling their terminals,” he says, “when all they sold is the operating rights. The infrastructure still belongs, and always belongs, to the port.”
“In the case of the Ontario Teachers Pension Plan,” he says, “they bought operating rights; these are not infrastructure sales. These operating rights are attractive to funds or financial institutions, because they are long-term contracts, and represent a reliable, long-term source of cash flow.”
Moving forward, Houston points to the port’s sustainability strategy, which he says fits seamlessly with the growth strategy necessary to reach Asia.
“Sustainability has three legs,” says Houston. “One: environment. Two, financial sustainability — you have to be capable and sufficient.”
“And three, there are the communities. You have to have sustainable communities around you,” he says, underscoring the fact that a port and its host community have to find a sustainable working relationship. “Ports operate at the leisure of the community around them.”
Meanwhile, the Asian continent continues to loom large for Captain Houston, and by extension, a nation increasingly looking to Asia for economic opportunity.
“We’re very dedicated to the business that comes from Asia, and we will do everything we can to make sure that cargo will come in through our port.”