Northwest Ports and the Gateway Initiatives

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Northwest Ports and the Gateway Initiatives

• Anne V. Goodchild
• Assistant Professor
• Department of Civil and Environmental Engineering
• University of Washington

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Research

• Port elasticity study with Dr. Leachman
• Impact of Port of Prince Rupert on regional trade
• Transportation resilience
• Analysis of past disruptions at PR
• Transloading and warehousing
• Cross border research
• Clean Trucks Program

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Diversity in West Coast Ports

• Growth pattern
• Discretionary cargo
• Approach to drayage truck emissions
• Congestion
• Landside infrastructure
• Port access
• Urban region

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West Coast Container Volumes
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Discretionary Cargo

• The cargo that doesnt have to go through a
  particular port
• The cargo that is transloaded
• Importing via the East Coast is getting more
  competitive
• Some companies have recently moved to a 4-5 port
  strategy
• In this case consolidation-deconsolidation is
  less effective
• With a one port strategy consolidation-deconsolida
  tion is getting more competitive
• 30 would remove transload volume in the Pacific
  Northwest
• 30 would have very little impact on Southern
  California

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• The line to Prince Rupert is a spur line
• No alternative routes
• Required switching activities in Prince George

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Reliability Threats
Highway 16 west at Shames Flats and 3 to 4 km
west of Shames Flats has opened to single lane
alternating traffic as of noon June 10, 2007CN
workers begin the long task of rebuilding the
rail line between Terrace and Prince Rupert now
that the Skeena has started to recede.
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Distribution Centers

• About 33 of Port of Seattle traffic use a
  warehouse in the Green River Valley (2005)
• 18 of 2007 Port of Seattle traffic is
  transloaded
• Provide capability to use consolidation-deconsolid
  ation strategy
• Provide economic benefit to importers from
  inventory management and transportation cost
• Provide regional economic benefit

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Unique elements of NW Ports

• More price sensitive
• More discretionary cargo
• Less transloading
• Relatively weak local demand
• Regional/International competition
• Regional/International cooperation
• Servicing Alaska trade

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Canadas gateway and trade corridor initiative

• Canadas strategy has resulted in heavy
  investment in a new port
• Not all cargo needs to move through a congested
  region
• Has capacity
• Consolidation activities in Vancouver
• Separation of rehandled/local cargo from
  discretionary cargo
• Primarily serving midwest markets

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• Currently PR serving US midwest
• Imports
• Exports
• SE Alaska continues to be served by Washington
  ports

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US Policy

• Growing consensus for a national freight program
• National Surface Transportation Policy and
  Revenue Study Commission, AASHTO, ARTBA, NRC,
  ATA, AAPA, US Chamber, GAO
• GAO recommends a national strategy to transform
  the federal governments involvement in freight
  transportation projects. This strategy should
  include defining federal and nonfederal
  stakeholder roles and using new and existing
  federal funding sources and mechanisms to support
  a targeted, efficient, and sustainable federal
  role.

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Policy Suggestions

• National strategy for planning investment
• Merit-based criteria for prioritizing projects
• Predictable, dedicated, sustained funding for
  freight infrastructure
• Partnership with the private sector to anticipate
  and meet the needs of system users
• New user fees

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Growing Coalition

• Coalition for Americas Gateways and Trade
  Corridors National Freight Mobility
  Infrastructure Act
• Creates National Freight Mobility Infrastructure
  Fund
• Merit-based distribution criteria
• Multi-modal eligibility
• National in focus
• Creates New Funding Mechanism
• 1 tax of the cost of transportation of ALL goods
  (domestic and international all modes)

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CAGTC Participants
Coalition for America's Gateways and Trade Corridors
Washington State DOT/ Port of Tacoma
California Air Resources Board
Association of American State and Highway Transportation Officials
ITS America
National Railroad Construction and Maintenance Association
National Industrial Transportation League
Association of American Port Authorities
Agriculture Transportation Coalition
West Coast Corridor Coalition
Mississippi Valley Freight Coalition
National Association of Manufacturers
American Association of Port Authorities
Waterfront Coalition
American Road Transportation Builders Association
American Public Transportation Association
Owner-Operator Independent Drivers Association
Association of American Railroads
AAA
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Discussion
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Open Questions

• Being closer to Asia is a significant asset
• Significant economic activity will occur in
  Prince Rupert
• Transit of containers between Canada and the US
  is not a deterrent
• Container management

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Prince Rupert Container TerminalPerformance to
11-March-08

• 19 Vessel Calls
• All vessels arrived departed on schedule
• Off loading/loading 22 containers/hour
• 35,600 TEUs handled
• 36.5 Backhaul - fully laden containers (less
  than Seattle, Tacoma, and Vancouver)
• Maximum Dwell Time 2 Days
• 100 of containers scanned for radiation

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Container Management

• Containers imported into Canada must leave the
  country within 30 days
• They can only be used for one repositioning move
• This may favor the delivery of containers to the
  US, where laws are less restrictive
• Most shipping lines are under contract to balance
  east and westbound moves and are subject to
  penalties if they are not
• Unless export potential is exploited, it will be
  expensive for shippers to return the containers
  to Prince Rupert, impacting the total cost

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Transloading
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Prince Rupert Terminals
CONTAINER TERMINAL Phase 1 2
WATER DEPTH Inner Harbour 35 - 44 metres Wharf
18.7 metres
CONTAINER TERMINAL 2
Grain Terminal
Coal/Sulphur/Wood Pellet Terminal
Ridley Island
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1st CN Container Train Departure Nov. 1 2007
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Demand

• Shipping lines will decide whether or not to use
  Prince Rupert
• They will choose to use it if meets their needs
  to control cost while maintaining service quality
  and reliability
• There is a complex web of relationships and
  economics that drive these decisions
• Demand for shipping line services is driven by
  shipper demands, and is a function of cost
• Shippers will find it more attractive to use
  Prince Rupert if they can finance the cost of the
  return trip with exports
• They will choose to service Prince Rupert first
  if import demand is of high volume and high
  priority

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Reliability

• Lean supply chains are a source of competitive
  advantage
• Increased length, frequency of disruption
• Shippers are looking for reliability (uncertainty
  is the enemy of logistics)
• e.g.
• Port of Seattle 2005 volume increase
• Walmart moves to a 5 port US import strategy

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Prince Rupert Advantage Hong Kong
Prince Rupert
Vancouver
Seattle
Distance from Hong Kong (Nautical Miles)
5,286
5,777
5,768
Los Angeles
6,380
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Prince Rupert Advantage Kobe
Prince Rupert
Vancouver
Seattle
Distance from Kobe, JA (Nautical Miles)
4,101
4,554
4,536
Los Angeles
5,137
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Prince Rupert Container Terminal
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100 Radiation Scanning
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Prince Rupert
Prince George
Edmonton 39 hrs
Saskatoon 47 hrs
Calgary
Winnipeg 61 hrs
Vancouver 61 hrs
Halifax
Halifax
Montreal 115 hrs
Toronto 108 hrs
Chicago 99 hrs
Memphis Competition UP/Los Angeles 112
hrs UP/Seattle 120 hrs BNSF/Los Angeles 130
hrs
Memphis 117 hrs
New Orleans
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Export/Backhaul Opportunities
forest products
recycled paper
Alaska and BC seafood
soybean
cotton
beef
special agricultural products - pulses, grains,
oilseeds malt, cubes, pellets, hay
poultry
pork
milk
Leather/ hides
bottled water
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Port of Prince Rupert Export Backhaul
Opportunities

• Alaska and local Seafood (est. 75,000 100,000
  TEUs per annum)
• Pork (est. 100,000 160,000 TEUs per annum)
• Beef (est. 40,000 80,000 TEUs per annum)
• Forest Products (est. 120,000 TEUs per annum)
• Special Agricultural Products (est. 60,000
  100,000 TEUs per annum)
• Pulses - Grains and Oilseeds
• Malt - Cubes, Pellets, Hay
• Other (originating in Chicago-Memphis area)
• Cotton (est. 160,000 - 180,000 TEUs per annum)
• Recycled paper (est. 40,000 - 100,000 TEUs per
  annum)
• Soybeans (est. 130,000 to 170,000 TEUs per annum)
• Petrochemicals/plastics (to be determined)
• Developmental (to be determined)
• Log and modular home manufacture
• Bottled water

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Port of Prince Rupert Sample Initiatives to
Stimulate Export Traffic

• Prince George Inland Port
• 120,000 TEUs of forest products annually
• Grand Prairie Intermodal Container Facility
• 2.5 million of land donated by Alberta Govt.
• Access improvements to CN Intermodal in Saskatoon
• 20 million from the APCGI.
• Access improvements to CPR Intermodal in Edmonton
• 75 million from the APCGI.
• CN Edmonton Grain Distribution Centre
• 4 million facility opened Nov. 16, 2006
• Handling high-value specialty crops
• Gap Analysis-identified Opportunities
• Container Services refrigeration, stuffing,
  storage repair
• Bonded warehousing

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PRPrince George,British Columbia
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International Intermodal Freight

• West Coast handles the vast majority of Asian
  imports
• Moved via landbridge to midwest and East Coast
  (double stack trains)
• Rapid growth in container volumes as Asian
  imports have grown

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Port of Seattle

• 4 container terminals, 25 cranes
• Natural deep water harbor
• 4 RR routes to inland markets (2 major RR hubs
  within 1 mile)
• 10 container berths up to 50 ft (15 m)
• Vessel calls 1,221 (2007)
• TEUs (2007) 1,973,504
• Containerized metric tons (2007) 14,584,816

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Port of Tacoma

• 5 container terminals
• 4 dockside intermodal rail yards
• Upland infrastructure with road network easy
  access to interstate system
• Natural deep water port
• Available land for expansion

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Port of Vancouver

• TEUs (2007) 2,307,289 (increase to 4 million by
  2012)
• Million tons/cargo (2007) 82.7
• 17 bulk terminals, 25 marine cargo terminals
• Linked to 3 RR with double stack capacity

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Prince Rupert Port

• gt 98 marine to rail intermodal
• Annual capacity 500,000 TEUs
• 360 metre container quay
• 18.7 metre berth depth
• 3 Ultra Post Panamax Cranes
• 7 working tracks (5,500m), 6 storage tracks
  (6,100m)

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Leachman

• For direct inland movement of marine boxes, the
  break point in declared value at which it is
  cheaper to import via the West Coast instead of
  all-water movement to Eastern markets fell from
  46 to 40 per cubic foot.

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