Mission accomplished:
Ports merger crowning achievement
for outgoing CEO Houston
By MARK WILSON
September 29, 2008
On July 15, Gordon Houston, president and CEO of Port Metro Vancouver, told his directors that he wanted to retire at year-end. He could have flown the ‘Mission Accomplished’ signal and all would have applauded the claim.
Capt. Houston said the final task he had set himself was ensuring the smooth integration of three Vancouver-area port authorities. “It was something industry had been calling for for 30 or 40 years,” he said.
Capt. Houston had been president of the Vancouver Port Authority, Canada’s chief port and a whale in size when compared with the two on the Fraser River that were to be its merger partners.
But despite size disparities, each port authority was given equal representation at the talks that led to the creation, on Jan. 1, of a new merged entity, initially known as the Vancouver Fraser Port Authority.
Timing is everything: when a ports merger was broached nearly 20 years ago by then Vancouver port chairman Patrick Reid, a former diplomat, it was ill received. It was treated as a threat to the greater autonomy enjoyed by the river ports at that time. It was also viewed as a crude power play by a hulking neighbour, Mr. Reid’s considerable charms notwithstanding.
Capt. Houston said the optics were different this time around. The Fraser River Port Authority and North Fraser Port Authority were both in favour and the matter was sensitively handled.
One important change that had occurred was that conformity had been achieved. The river ports had ceased to be harbour commissions and were under the same legislative umbrella as the Port of Vancouver, having become port authorities.
B.C. Premier Gordon Campbell and his cabinet were enthusiastic, believing that the proximity of the ports made the merger an obvious thing to attempt. In Ottawa, there was a mood to make it happen.
Merger chimed nicely with the federal government’s Asia-Pacific Gateway and Corridor Initiative to boost trade with Asia and increase the Vancouver Gateway’s share of container imports.
David Emerson, industry minister under the Liberals and then minister of international trade after he crossed the floor of the House to join the Conservatives, remained supportive of merger throughout. He was responsible for the Asia-Pacific Gateway and Corridor Initiative until being named external affairs minister, and was deeply familiar with transportation issues, having overseen the expansion of Vancouver International Airport.
Capt. Houston said former Liberal transport minister Jean Lapierre had supported consolidation and Lawrence Cannon, who succeeded him when the Conservatives won office in February 2006, moved on the file.
“We had discussed it locally and realized we needed to have Transport Canada involved,” Capt. Houston said. “We had a meeting at which Kristine Burr (assistant deputy minister, policy, Transport Canada) suggested we needed a study to outline the benefits of merger. Following that, we got a letter from the minister.”
In his letter, Mr. Cannon called for a meeting between the heads of the Vancouver Port Authority, Fraser River Port Authority and North Fraser Port Authority.
A high-level team of Ottawa facilitators was on hand for an exploratory discussion held July 6, 2006, to discuss the integration of the three contiguous Vancouver-area port authorities with combined annual cargo volumes of 130 million tonnes.
The Ottawa contingent included Ms. Burr, Emile Di Sanza, then director general of marine policy, and Marc Fortin, director of domestic shipping policy. Also present was Mike Henderson, Transport Canada’s regional director general for B.C. and the Yukon.
Capt. Houston praised Ms. Burr highly for her subsequent efforts to facilitate the merger at the Ottawa end.
“There was a deliberate decision made to make this a merger of equals,” he said. “Differences in size didn’t make anyone less important.”
He also credited a longish lead time before consolidation was accomplished with making the transition easier. Even so, “I have to take my hat off to the people in Ottawa and at Transport Canada who worked long and hard to get the necessary regulations through in time,” he said.
When the new consolidated entity was announced, it was no surprise that Capt. Houston was named president. Allan Baydala, president of the North Fraser Port Authority, and Allen Domaas, president of the Fraser River Port Authority, took supporting roles. Capt. Domaas has since retired.
The new authority had an 11-person board drawn from the ranks of directors of the merger partners. Currently, the board is one person shy of its permitted number of directors.
Capt. Houston said the combined traffic of the three ports is expected to be 138 million tonnes this year. This puts PMV in fourth spot among major North American ports and gives it the volume that number three port – New York/New Jersey – had in 2006 (its traffic has since grown). The two U.S. Gulf ports – South Louisiana and Houston – that claim the two top positions among ports do so because of the tanker traffic they receive.
Capt. Houston said not all employees at the river ports wanted to ride the merger train and a quarter of them left. This has not resulted in a net reduction in staffing as recruits have been taken on, but not necessarily to fill jobs that fell vacant.
One advantage secured by the river ports is that they now enjoy name recognition that carries around the world.
Capt. Houston said that the marketing of the river has become easier. “People normally associate a port with a city and Port Vancouver had an easily recognizable identity. But Fraser Port had a lot of trouble marketing itself. Proof of that is that CPR, when selling its service to Fraser Surrey Docks, said (the terminal) was in the Port of Vancouver.”
The merger has brought heightened awareness of the need for good relations with host municipalities. Whereas Vancouver had to deal with seven surrounding municipalities, PMV has 22 municipalities as neighbours. The port has someone assigned full time to working with local and regional governments.
A bridge between the port and Metro Vancouver are shared concerns about transportation and economic growth. “We are a good fit,” Capt. Houston said.
Metro Vancouver has struck a port committee and the regional body and the port have had a conference, which is planned to be a twice yearly event, with less formal contact being maintained throughout the year.