The Crown Prince of Ports
A small northern outpost on the West Coast of Canada is making big waves from Shanghai to Chicago and beyond. The Fairview Container Port at Prince Rupert opened for business in September 2007 and immediately transformed Prince Rupert from a quaint Native Indian fishing village to a veritable giant killer in the increasingly important world of global shipping. Today, the town is poised to seize the mantle away from the stalwart ports of Long Beach and Los Angeles and become the gateway of choice for Asian imports into North America.
Prince Rupert is situated on British Columbia’s North Pacific coast approximately 40 miles south of the Alaska border. This location translates into the only advantages that matter when it comes to global trade: Time and Money. A container ship sailing from Japan to North America will make it to Prince Rupert a full three days sooner than the Port of Los Angeles. For what is generally an eleven day crossing, this represents a significant savings in time and fuel. The geography is inescapable. Shipping to Prince Rupert is just plain faster and cheaper. U.S. ports cannot compete.
But getting there is only half the story. Unlike other west coast ports, Prince Rupert built a rail terminal right at the dock. Once a ship arrives, it can immediately have its cargo unloaded directly onto the trains. Within 24 hours of arriving in Prince Rupert, cargo is ready for rail transport to points east and south. As a result, Prince Rupert’s dwell time, the amount of time a cargo container remains at the port, is lower than all west coast ports by at least half. Also, rail traffic from the port is not hampered or otherwise delayed by urban congestion. And since Prince Rupert’s security facilities are state of the art, the trains do not need to stop at the U.S. Border. Travel time to Memphis, the key U.S. distribution hub, is a brisk 132 hours.
Asian importers have been quick to notice Prince Rupert’s advantages. Despite the global recession, which has slowed activity at other west coast ports considerably, Prince Rupert’s port has flourished. Container activity at the Prince Rupert docks for the first half of 2009 was up 124 percent over the same period in 2008. Also, the second quarter of 2009 saw a 41 percent increase in the number of containers serviced over the first quarter. Cumulative tonnage so far this year is over double last year. Prince Rupert is quickly becoming more than just an attractive alternative. It is being seen by Asia as the Pacific Gateway to North America.
The primary disadvantage for Prince Rupert is its relatively small 500,000 container capacity. A single terminal at either Los Angles or Long Beach can handle as much. Yet, Prince Rupert has plans, and room, to expand its capacity ten-fold. One of the key pieces of those expansion plans recently fell into place. In February this year, Canadian National Railways, a partner in the Prince Rupert Port, completed its purchase of the Elgin, Joliet and Eastern Railway line in suburban Chicago. The purchase allows CN’s trains to bypass Chicago’s congested rail lines, saving an additional 17 hours of travel time. The result is a direct, virtually uninterrupted flow of goods from Prince Rupert to Memphis.
CN’s rail line purchase amounts to a coup for Prince Rupert over its U.S. competitors as it makes Prince Rupert’s promise of quicker and cheaper transport all but unassailable. While there was some opposition to the purchase – then Illinois Senator Obama tried unsuccessfully to kill the deal- ultimately, the benefits to other U.S. concerns proved too great. The city of Memphis is so overjoyed by the business being brought its way that it has entered into a memorandum of understanding whereby it promises to promote Prince Rupert as its port of choice when attracting new commerce.
Not surprisingly, while Asian shippers were quick to recognize the merits of Prince Rupert, the U.S. Ports were just as quick to dismiss it. Until recently, U.S. ports never considered Prince Rupert a threat and have been content to rely on their cachet and name recognition for retaining business. Prince Rupert’s performance this year has changed all that.
U.S. Ports have now realized that they have underestimated this Northern Canadian fishing village and have joined forces to fight back. Recently, representatives from the ports of Los Angeles, Long Beach, Oakland, Portland, Seattle, and Tacoma were on Capitol Hill trying to persuade lawmakers to enact a national freight movement policy consistent with the U.S.’s recent “Buy America” policy. President Obama notwithstanding, such legislation is not likely to get anywhere. Last week, the same U.S. Port representatives took their case to China and the World Shipping Summit. There, they announced their collaboration with Union Pacific and BNSF Railways and touted their combined enhanced service and capacity.
Yet, U.S. Ports remain hobbled with clogged shipping lanes, inefficient productivity, high dwell times, outdated security systems, and high costs. Even if U.S. ports were to spend the necessary time and resources to improve these conditions, and they must, Prince Rupert provides a solution now. Even with all else being equal, Prince Rupert’s geographic advantage still makes it the easy choice. All that is left is expansion; which is coming. By all accounts, the Port of Prince Rupert’s future seems assured.
Three years ago, Don Kusel, president and CEO of the Prince Rupert Port Authority humbly predicted that the port would transform the economy of the entire region. Mission accomplished. Yet, it has done much more than that. In transforming itself, Prince Rupert has transformed the world’s perceptions about Canada and Northern Canada in particular. The Port at Prince Rupert has helped dispel the notion that Northern Canada is a vast and frozen wasteland. Instead, the world is becoming aware that Canada’s North is an increasingly connected, accessible and vital region. With its global acceptance and success, Prince Rupert not only emerges as North America’s Pacific Gateway, it signals Canada’s emergence as a leading economic and geo-political player on a transformed world stage.