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Typhoon’s trail in Asia adds to B.C. shippers’ woes

Cargo bottleneck feared in Vancouver after vessels are delayed in Hong Kong
hongkongportcreditguozhonghuashutterstock
Delays in shipping at Hong Kong caused by Typhoon Mangkhut are expected to cause backups at other ports around the world | GuoZHongHua/Shutterstock

For Vancouver transportation and shipping industry officials, a disruption to one of the world’s largest transport hubs, even if only for a day or two, has palpable consequences.

That was the case last week, when Typhoon Mangkhut landed a direct hit on Hong Kong on the night of September 15 with winds clocked at 175 kilometres per hour and storm surges over three metres high. It was the most intense storm to hit Hong Kong on record, with officials estimating damage and insurance claims to exceed US$1 billion.

On the transport front, Hong Kong, the world’s sixth-largest container port, suspended operations between September 15 and September 17, with Asian media reporting about 80 ships anchored in Hong Kong waters during the storm while another 10 were moored in the city.

The delay, in a port facility that handled 20.8 million 20-foot equivalent units (TEUs) of containers in 2017, caused backups in the global system that will be seen in Vancouver.

“Certainly, we are expecting ships to be off schedule as a result of the storm,” said Vancouver-based Chamber of Shipping vice-president Bonnie Gee. “You have disruptions to the scheduled berths that certain ships are supposed to occupy at a certain time, and there will be backup in the system.”

Gee said Canada’s shipping industry has some flexibility in accommodating backed-up containers, in inland yards and other transport facilities along shipping routes, to make sure the backlog isn’t too large at Vancouver’s shipyards. But, she added, officials are more worried that the glut of containers delayed by the Hong Kong typhoon will arrive all at once as operations resume.

“We have limited rail capacity, and the grain season is just about to ramp up for the next few months,” Gee said. “And even without this disruption in the first place, our rail capacity is already an issue, and that’s also considering the fact that Canadian winters are traditionally very hard on shipping networks.”

It is unclear how much of Vancouver’s Hong Kong-bound cargo, which can be transferred from Hong Kong to other markets throughout Asia, was caught in the disruption. Also affecting Vancouver’s port traffic was the suspension of operations at two other major container ports, Shenzhen (third largest in the world with 25.3 million TEUs last year) and Guangzhou (seventh, with 20.3 million TEUs), hit by Mangkhut.

Former B.C. international trade minister (and current Liberal MLA) Teresa Wat said Canadians often do not get a full sense of how much the economy – especially on the West Coast – depends on Hong Kong, given that direct exports to the city take up only about 0.5% of B.C. total annual exports.

But Wat noted that B.C. more than tripled its exports to mainland China in the 10 years after 2007, and a large portion of those exports were directed through Hong Kong’s logistics hub. She added that, as B.C. starts to look to Southeast Asia, Hong Kong will likely again take up an important role of connecting markets – something that the typhoon’s disruption has highlighted.

“I was quite worried about my friends and family in Hong Kong during the typhoon, so at first I didn’t think about the economic impact myself,” said Wat, who lived in Hong Kong before moving to Canada. “But Hong Kong’s role as a gateway to both China and the ASEAN [Association of Southeast Asian Nations] countries – I think a lot of people don’t realize just how important it is to our economic well-being.”

On the air transport front, Hong Kong International Airport reported 889 flight delays or cancellations, resulting in the stranding of thousands of passengers and significant amounts of air cargo. The airport surpassed Memphis last year as the world’s busiest for cargo traffic, with 4.9 million tonnes transported, and its 68.5 million passengers in 2017 made it the world’s eighth busiest in that category.

As with cargo ships, the problem arises from the glut of delayed flights and passengers all hitting the terminal at once after operations resume, airport officials said. According to a South China Morning Post report, Hong Kong International Airport had to remain open overnight September 17-18 to accommodate 2,000 rescheduled flights.

An airport official said Hong Kong’s two runways both stayed open overnight to clear backlog, and operations returned to normal by September 18.

Air Canada (TSX:AC) spokeswoman Angela Mah confirmed that the airline’s flights departing for Hong Kong on September 15 and the return flights on September 16 were cancelled. Daily service between Vancouver and Hong Kong has resumed since, she added.

Two airlines that use Hong Kong as their hub, Cathay Pacific and Hong Kong Airlines, also cancelled their flights departing Vancouver International Airport (YVR) for one day (September 15 for Cathay Pacific, September 16 for Hong Kong Airlines). In addition, YVR’s daily China Southern Airlines service to Guangzhou, also hit by the typhoon, was also cancelled September 16. •