There’s an interesting article in the Edmonton Journal about our container port and its impact on the western economy. Jeff Burghardt gave a speech in Alberta yesterday, where he said that the container shipping lines can make more money returning the containers empty than they can waiting to have them filled in Canada for a return trip. A situation that will provide a substantial challenge to turn around.
He also said that west coast labour costs are too high and that container farms in Edmonton and Grande Prairie might be better locations for filling any containers destined for export.
Will this have any impact on our expected boom times here, especially if the spin off jobs are going to points further east?
Here’s the link to the Journal which of course goes dead after a bit,
so with that in mind the entire article is below.
Exporters out of luck at new B.C. terminal
Lucrative Asian imports trump Prairie products
By David Finlayson
The Edmonton Journal
Thursday, September 14, 2006
EDMONTON - Prairie manufacturers may not initially benefit from the new Prince Rupert container port because of the huge demand for containers in Asia, a gathering of agricultural producers heard Wednesday.
Container shipping lines can get four times the price for goods coming to North America from China and other Asian nations, so they don’t want to slow their return by filling them up with less lucrative goods from Western Canada, Prince Rupert Grains Ltd. president Jeff Burghardt told a Growing Alberta meeting.
"The opportunity on the container side is in importing, and we have to find a way in five or six years to turn them around full.
“But it’s a substantial challenge,” said Burghardt, who also sits on the non-profit Northwest Corridor Development Corp.
Inland container collection facilities must be strategically located to get the economies of scale to compete, he said.
Container facilities in Edmonton and perhaps Grande Prairie will become increasingly important because West Coast labour is too expensive to fill containers there and still be competitive, Burghardt said.
And it would take a six-month shutdown at Prince Rupert to break that, he said.
“It’s all about creating value and not adding cost. And it’s not solely for the 340,000 residents of northern B.C. It’s also for producers who want to lower their transportation costs.”
The first $170-million phase of the container port is scheduled for completion next year, with a $250-million second phase to follow.
Prince Rupert also plans to expand its grain and coal handling facilities, and has 1,200 acres of industrial land ready for development. Burghardt also sees opportunities in sulphur exports, and in plans to develop British Columbia’s offshore oil and gas fields.
Prince Rupert is the closest port to the huge Asian markets, as well as the deepest and safest harbour on the west coast of North America. And this year rail rates were lower than to Vancouver.
But so much depends on improving the road and rail networks as transportation has taken a back seat to social services and health in federal government funding, Burghardt said.
And there’s a funding inconsistency problem when the Great Lakes St. Lawrence Seaway system is allowed to run a $75-million annual deficit, but if you want to open a customs office out West to make it easier for tourists it has to pay for itself from day one, he said.
It’s expected over the next 15 years that $1.4 billion in private money will be spent on railways and port terminals in Western Canada, and $2.6 billion in public funds for highway improvements, Burghardt said. But it’s key to have east-west connections as well as north-south to bring processing closer to the raw materials, he added.
Burghardt acknowledged grain exports through Prince Rupert have dropped substantially in the last five years, mainly due to poor crops. And debt has grown at Prince Rupert Grain, which is owned by Canada’s five largest grain companies.
However, there will be enough volume in the long term for the two Vancouver grain terminals and Prince Rupert all to do well, he said.