The Port of Prince Rupert held its 2016 annual general meeting on June 20. Before the meeting kicked off, the Northern View had a few questions for the port’s president and CEO, Don Krusel.
Northern View: How do you account for the overall decrease in cargo and container traffic this year?
Don Krusel: There are two factors that contributed to that. The biggest one was a 10 per cent decline in coal volumes year over year. The other factor was a decline in containerized activity but with the containers we were having a very good year and then the real issue there was that Hanjin Shipping lines declared bankruptcy and that really threw the numbers off.
The containers were down five per cent but mainly due to the Hanjin Shipping line going into bankruptcy.
The root story in containerization is the fact that export containers were up eight per cent. You’ll hear later on tonight that is really important for the port because in order for the port to continue to grow inbound traffic we have to focus on filling containers with export goods. The fact that export container traffic was up by eight per cent even in a down year is really significant for us.
Secondly, the other story to be emphasized is our traffic was only down four per cent overall given the fact that coal makes up such a large total percentage of the traffic. The fact that it was down 10 per cent and overall traffic was down four per cent. It shows what we’ve been talking about for a number of years, we’ve been trying to diversify the mix of cargos flowing through the port such that we aren’t reliant on just one line of business.
Coal was down by 10 per cent but it didn’t really impact overall tonnage that way. As an example of the diversification is the wood pellet facility. Westview Wood Pellets was up 22 per cent and helped offset some of the declines.
Northern View: Is DP World still tied up in court with Hanjin Shipping?
Don Krusel: Companies are trying to protect the amount owing to them. If anyone goes into bankruptcy you try to lean some of the assets so if you try to sell that asset you can first extract some of the money that is owed to you.
It’s not just DP World, it’s companies all over the world that are owed by Hanjin Shipping lines. They’re trying to put leans on some of the Hanjin Shipping lines assets. It hasn’t worked out yet.
Northern View: Is it difficult to recruit women in this area?
Don Krusel: The board hasn’t really turned over. The appointments to the board are controlled through a selection process that goes through Ottawa, so it’s the minister of transportation. It has been communicated so many times through the prime minister and others in federal government, there is a clear drive to balance the gender on boards. The Port of Prince Rupert is no different.
There is an ongoing attempt to recruit females to the board of directors.
Northern View: What about the executive?
Don Krusel: There hasn’t been a lot of turnover. Yes, we are trying to balance the gender, balance the entire organization.
Northern View: What role do local First Nations play in the decision making process at the port?
Don Krusel: We have Elmer Derrick, who is a hereditary chief from the Gitxsan so we have First Nation representation. The latest board member (Frans Tjallingii) who was just recently appointed by the minister was nominated by Lax Kw’alaams and Metlakatla so the minister is following the recommendation provided by the Coast Tsimshian. They are becoming a clear part of the decision making process at the port.
When Fairview Container Terminal was developed we completed a benefits agreement with the Coast Tsimshian and part of that agreement was that we agreed that we would advance any nomination that they put forward for a vacant position on the board of directors to the minister for consideration and they did that, and the minister considered, and appointed that person.
Northern View: If the port continues to see decreases in overall cargo and container shipments will we see the same merit increase next year for senior staff at the port?
Don Krusel: The success of the port shouldn’t be measured in cargo. There’s so much else going on and everything from environmental monitoring and compliance to business development activities and what you’ll hear today is that in spite of the cargo decline, our financial picture is actually improving quite dramatically.
There isn’t a direct correlation with staffing levels at the port and cargo levels. You might see that at a terminal that is operating. If container traffic suddenly declined at Fairview Terminal I’m sure they would not need all the same kind of staffing.
In reality, the port is growing and I’m really confident, that we’re going to see continued growth in 2017 and continued growth in the coming years so I actually foresee staffing levels at the port are going to continue to increase because we have so much work to accomplish.
Northern View: The C.D. Howe Institute just released a report about privatizing the port, is that something that could happen?
Don Krusel: Well, anything could happen to be quite honest, but those discussions about privatization are really broad based discussions right now that are happening with our federal government that are looking at areas where they can extract value from perhaps some assets. Ports and airports and other federally controlled assets, the department of finance is investigating possible options.
We haven’t heard any true action or direction in that area.