A little something from the glolbe and mail
theglobeandmail.com/servlet/ … Columnists
Enjoy
Enjoy what? If you’re not a “subscriber” all you get is the first paragraph which taken on its own is nothing but one persons opinion with nothing to back it up.
Mike
Here…I’ll save you all the hassle of clicking the hyperlink…
[quote]Prince Rupert port plan may be sinking
By MARY LYNN YOUNG
Friday, July 22, 2005, Page B2
Vancouver’s port dispute between the truckers and transport companies may seem like just another obstacle in British Columbia’s already congested gateway to Asia. But this current tussle is much more interesting than it appears. It reveals the fault lines in the provincial port system and raises important questions about the viability of plans for a revitalized northern port in Prince Rupert.[/quote]
I don’t buy it. I think that it really shows the importance of another West Coast container port. I’m interested in reading the whole article. I’m going to Eddie’s ASAP!!
Prince Rupert Port Plan May Be Sinking
By MARY LYNN YOUNG
(Globe and Mail, July 21, 2005)
Vancouver’s port dispute between the truckers and transport companies
may seem like just another obstacle in British Columbia’s already
congested gateway to Asia. But this current tussle is much more
interesting than it appears. It reveals the fault lines in the
provincial port system and raises important questions about the
viability of plans for a revitalized northern port in Prince Rupert.
The four-week-old work stoppage over rates for truck drivers has
affected the pipeline for local goods arriving from offshore, which
shows that shipping and inland transportation routes operate as a system
– it’s not just any port in a storm.
This is important to realize for three reasons. The first is that in
this system, the major players, such as the shipping lines, are focused
on two things: reliability and price.
Remember, the transportation industry is quite simple. It is a
competitive, capital-intensive business that needs to get cargo from
point A to point B in the most efficient and cost-effective manner
possible. That’s why Prince Rupert, a small port town in northern B.C.,
which also happens to be the closest North American port for Chinese
shippers, looks so good on paper.
Add to this the fact that Prince Rupert is located in a struggling
resource area, and that more than $60-million in federal and provincial
government funds have been devoted to building the first phase of a new
container terminal. Now, the project sounds even better.
However, dig a little deeper and the situation becomes a bit murkier.
The whole reason that Prince Rupert is even on the map is a result of
overload at the Port of Vancouver’s three container terminals, which are
located in the Lower Mainland.
This is where ships carrying container loads of goods from Asia drop
their cargo for local consumption and gain access to inland
transportation routes, largely to Central Canada and the U.S. Midwest,
via trucks and/or railways. This hub is straining at the seams because
of the increasing trade from China, which has also been causing backlog
and congestion inland.
Vancouver is a popular destination, similar to Los Angeles, because both
ports discharge local goods (one-third of the goods that arrive in
Vancouver are for local consumption, compared with almost all of the
goods that arrive in Los Angeles).
Prince Rupert, on the other hand would have no local traffic, which
means that it would be less economical for the shipping companies.
The second reason it is important to think interconnection in any port
discussion is that all cargo isn’t going to the same place. For
instance, in discharging their cargo in Vancouver, shipping lines often
have to consolidate their loads to minimize inland travel costs.
Each container ship contains about 6,000 to 8,000 containers, with the
size of each container equivalent to an average living room packed to
the gills with goods, such as television sets, cars, appliances and
clothes, destined for the North American market.
That’s a lot of product. Consolidation is completed by ship customers at
distribution centres like the Bay’s in Richmond. So customers are always
monitoring their product and may decide to reconsign it to another
destination en route – if it is closer to where the product is needed.
As well, shipping lines can and will change ports of call if the
situation benefits them.
So that means the main shipping lines that work between Asia and the
West Coast of North America change ports because of a variety of
reasons, often shifting alliances with the other players in order to
minimize costs. We see this happening in the current Vancouver port
strike where container ships are easily diverted to Seattle.
The third reason to think of the entire system in any discussion of
Prince Rupert is that shippers look for competitive transportation and
railway infrastructures to unload their mountain of goods. This means
that a slow boat from China is fine as long as the entire system is
reliable and cost efficient.
And here is more bad news for Prince Rupert. That town may be slightly
closer to China, but it is served by only one railway, Canadian
National. Other than Halifax, Prince Rupert is the only other port in
North America with single Class 1 railway access.
To add insult to injury, it also isn’t the only port that will have more
capacity on the coast once it gets up and running.
Vancouver and Los Angeles may be overcrowded now – but all West Coast
ports are expanding, including Seattle and Tacoma, Wash.
As well, Portland, Ore. – currently a big port that handles a lot of
bulk commodities but little container traffic – boasts two railway
lines. And arguably Portland is a more natural fit for the growing West
Coast traffic.
There has also been talk about building another port at Cherry Point in
Washington State and in Mexico.
So, basically Prince Rupert has no infrastructure, no local customers
and no warehousing and distribution – and no competitive railway. And
yet talk is that the planned port will surpass Vancouver in containers
within a decade – but those numbers are based on current volumes in
Vancouver.
Prince Rupert’s biggest plus right now is that the system is in crisis.
But given the structural issues, the port is likely to be only
marginally viable as long as Vancouver and Los Angeles are at capacity.
And then where does that leave Prince Rupert and all of the government
funding?
Very interesting…more to think about.
Well it’s like anything I guess. Look hard enough and you can find all kinds of “possible” bad things. I personally don’t subscribe to the doom and gloom view of the future that this article seems to put forward. On the other hand I also don’t subscribe to the view some people put forward that this port expansion will turn Prince Rupert into the next Vancouver.
I’m sure it will fall somewhere inbetween and quite frankly I’m ok with that.
Mike
I agree Mike.
There are too many reasons that this project was initiated. Maybe there are possible port expansions in Portland and Mexico as MiG’s article suggested but geographically we have the advantage. Certainly we don’t have the infrastructure that a city such as Vancouver does but in creating a project such as this there has to be a starting point and in this particualr project we start with very little. It is also possible that alot of what gets shipped to Vancouver stays there but in shipping items from Asia to the eastern seaboard , and vice versa, we have a distinct advantage over other cities. Vancouver is over crowded. Portland and Mexico do not provide the same advantages that Rupert does. I think that the container truckers strike may have had a more profound negative impact if it happened a year ago. At this point Ruperts port project has millions invested by the Federal and Provincial Govt, CN and Maher. I think its a little too late to back out of it now. I have faith that all of the parties that have invested have thought this out very well prior to obligating themselves. I don’t know that anyone thinks that we will become a city such as Vancouver. The container port, regardless of size, will help our ailing local economy immensely.
Let me end this with a headline from the Edmonton Journal…of course you need a subscription to read the whole article.
[quote]Alberta growth hinges on Prince Rupert
EDMONTON - The new Prince Rupert container port is so important to Alberta’s future it can’t be allowed to fail, the province’s representative on the port authority says. [/quote]
Did anyone find this article from the Edmonton Journal? It seems very interesting that on the same day there is a negative article written and a positive one (I assume). Anyways, this article seems like it would be worth the read.
Edmonton Journal
The new Prince Rupert container port is so important to Alberta’s future it can’t be allowed to fail, the province’s representative on the port authority says.
Former cabinet minister Walter Paszkowski, now economic development officer for Grande Prairie County, said Thursday the project will not only benefit northwest Alberta, but the whole province. "It’s a huge opportunity not only for growth, but also for shipping different types of materials without dealing with the limitations Vancouver is dealing with right now.
“And we don’t have that many options, so we have to make it work.”
The federal and B.C. governments and CN Rail have agreed to put $30 million each into the $170-million project. Port operator Maher Terminals Inc. of New Jersey will throw in $60 million, and the port authority $20 million.
Phase 1 will provide capacity for 500,000, 20-foot equivalent containers (TEUs) per year. A second phase, to be completed by 2009, will take it to two million TEUs, more capacity than either Vancouver or Seattle.
The port’s board will meet Monday to pick a general construction manager, and Paszkowski is confident it will start taking its first containers within a year.
“It’s not that far off schedule, as long as the money keeps flowing.”
Prince Rupert has an uncongested deep water port that’s 30 to 40 hours closer to key Asian markets than other West Coast ports. And a container terminal will allow more value-added products to be made in Alberta and exported more cheaply, Paszkowski said.
There is also enough land at Prince Rupert to expand the export of coal, steel, wood and grain, he said.
The port authority would like to see processing and packaging facilities on site for such commodities as wood and sulphur, Paszkowski said.
Enbridge has also yet to decide whether its proposed Alberta-B.C. oilsands pipeline will end in Prince Rupert or nearby Kitimat.
“It will be one or the other, and that will be very useful too,” Paszkowski said.
CN vice-president Jim Foote said this week the railway’s coal shipments were up 90 per cent in the most recent quarter and are expected to continue to rise with the demand by Asian steel mills.
He also said the Chinese are starting to ship goods to Halifax through the Panama and Suez canals to avoid the congestion at West Coast U.S. ports.
Grande Prairie recently acquired government land to build a container terminal that will link with the newly renovated Hythe to Dawson Creek rail line, and on to Prince Rupert.
It’s probably the simplest way of diversifying the regional economy with the least amount of money, Paszkowski said. “As an example, a particle board operator up here will now be able to pre-cut furniture to companies’ needs. Those kinds of things need to be packaged in containers.”
As part of its acquisition of B.C. Rail, CN has spent $4 million reinforcing bridges and replacing ties on the once-abandoned line, northern Alberta’s only rail link into B.C.
Paszkowski said the county does not plan to build and operate the $7 million terminal, and will be looking for proposals from private industry.
I think I heard or read somewhere that Alberta thinks of Rupert as their port. Which is good, I think.