The Port of Vancouver creates a ‘logistical nightmare’ for Canadian auto deliveries

Delays of up to a month at the Port of Vancouver, driven by heightened vehicle imports and a shortage of railcars, are prompting automakers that ship vehicles through the West Coast logistics hub to enact elaborate contingency plans to get vehicles to Canadian dealers.

Facing weeks of waiting at Vancouver’s Annacis Auto Terminal, Hyundai Auto Canada, for one, has begun diverting vessels to ports in the United States, where vehicles are offloaded, placed on railcars and shipped across the border into Canada.

The rerouting is no simple task, said company CEO Don Romano, but it beats a month of idling off the coast of Vancouver, especially when the ship is due back across the Pacific Ocean to pick up another load.

“It’s a sad state of affairs,” Romano said.

“You have to be very efficient. A ship has to depart and berth on a very specific time frame so it can get back and pick up more and then deliver more. The margin of error is just too small.”

For now, the automaker is picking up the tab for the logistical gymnastics, he added. If the issues persist, the costs will all be worked into Hyundai’s vehicle pricing, meaning consumers will end up paying for Vancouver’s port problems.

David Adams, president of the Global Automakers of Canada, said half a dozen of the overseas automakers the organization represents have flagged the same issue.


“In some cases [they] don’t even have a date where they’re going to be allowed to land. So, they end up diverting those shipments down to the US, and it creates a whole other logistical nightmare in terms of getting the vehicles from the port in the US to where they need to be here in Canada.”

As of mid-June, Romano said one ship laden with about 4,000 cars was waiting off Vancouver, while another vessel was en route to Canada. He said 89 per cent of the vehicles Hyundai sells in Canada are imported from South Korea, with the balance built in the United States.

The majority of Hyundai’s trans-Pacific imports are still arriving at Canadian dealers via Vancouver, Romano said. But the delays, which have been ongoing since heavy flooding wreaked havoc on British Columbia’s infrastructure in late 2021, have prompted the company to redirect shipments that face longer wait times.

While customers have become accustomed to delays since COVID-19, the Port of Vancouver is now the biggest obstacle for Canadian dealers looking to boost vehicle inventories, said Huw Williams, public affairs director at the Canadian Automobile Dealers Association.

The delays, Williams said, hurt both productivity and competitiveness, especially at a time when the demand for vehicles remains elevated.

“We don’t want further delays. We want to be in a position to meet that customer demand.”

The Port of Vancouver, which encompasses 29 separate terminals sprawled across the Burrard Inlet and Fraser River that encircle downtown Vancouver, Burnaby and Richmond, has two auto terminals. The larger of the two is on Annacis Island in the Fraser River, the other is in nearby Richmond. Together, they account for nearly 100 per cent of the vehicles shipped to Canada from Asia.


Both auto terminals are federally owned, but operated by Wallenius Wilhelmsen Logistics.

Dan Emerson, vice-president of Canadian operations at the international shipping company, acknowledged the delays, and said the two terminals were seeing “extremely high volumes” as auto shipments climb from their pandemic lows.

“All OEMs are trying to restock their dealers at the same time, within a very short time frame of a few months, so we are experiencing increased vessel calls with very large volumes per call,” he wrote in an email.

A nationwide railcar shortage, Emerson said, is exacerbating the problem, preventing offloaded vehicles from being efficiently transported out of the terminals. Automakers manage their agreements with railroads directly, Emerson added, so Wallenius Wilhelmsen plays a coordination role but “does not control the railcar supply.”

The company is “working tirelessly” to manage the volume through liaising with the automakers, vessel operators, railroads and trucking companies involved, Emerson said.


Delays at the two auto terminals are also just one item on a laundry list of problems at Canada’s busiest port. A May report from the World Bank and S&P Global Market Intelligence, ranked the Port of Vancouver 347th on efficiency out of 348 container ports assessed globally.

Andrew Wynn-Williams, divisional vice-president for British Columbia with industry group Canadian Manufacturers and Exporters, said issues at the port were worsening because of the pandemic and BC’s 2021 floods.

Shortfalls in the shipping hub’s underlying infrastructure, however, are the real source of the problems, he added. He pointed to several railway chokepoints and a lack of storage space in land-strapped Metro Vancouver as two of the key problems the federal government and local stakeholders are working to address.

“There’s no quick fix. If someone’s expecting the port to improve right now, that’s not going to happen,” he told Automotive News Canada.


Some relief for automakers, on the other hand, appears to be on the horizon.

The Annacis terminal is midway through an expansion project that will add further vehicle capacity as import volumes from Asia continue to grow. The project, on track to be completed next year, will increase capacity to 480,000 vehicles per year, from 352,000, according to Alex Munro, spokesperson for the Port of Vancouver.

But the significantly higher capacity at the island terminal following the expansion is dependent on railcar supply, Emerson warned, meaning if the shortage of railcars isn’t solved the site won’t reach its nameplate throughput.

The seasonality of the automotive business also creates challenges, Emerson said.

“We can use support from the OEM’s to better manage vessel flows into Canada by providing a balanced volume throughout the year versus shipping extreme volumes over five to six months.”

Romano acknowledged the car business is currently at “peak seasonality,” and said delays at the port should subside in the second half of the year as volumes decline. Longer-term, however, he said he fears the delays could persist as imports from Asia tick up over the next five to 10 years.

“We’re seeing more vehicles coming from Asian countries like Vietnam and China. Tesla’s now shipping from China to Canada. So, we’re seeing lots more trans-Pacific activity.”

As volumes climb, the federal government must ensure Canada’s port infrastructure can keep up, he added. This could mean ongoing improvements in Vancouver, or added terminals capable of handling vehicles at other West Coast hubs, such as Prince Rupert, Romano said.