The shortest distance between two points on a sphere is called a great circle. Its a straight line stretched across a globe. Do the same thing between the Hong Kong/South China region and North America and you will find that the shortest distance lands squarely on a place 480 miles north of Vancouver, British Columbia. That place is called Prince Rupert's Island, BC.
Combine that short distance from the manufacturing center of the planet with North America's deepest ice-free natural harbor and you have a perfect location for a sea port.
That's not a new observation. The Grand Trunk Railroad of Canada terminated its rail services in this area as early as 1914, noting that the area was a natural alternative to Vancouver as a port and a great way to tie rail services to import cargoes.
In the 1920's the GT filed bankruptcy and was nationalized by the Canadian government. It later merged with Canadian National Railways. During World War II, Prince Rupert was used to support allied military logistics activities in the Alaskan theatre. By 1975, the Canadian government had declared the Port of Prince Rupert a "National Harbor", and constructed a number of breakbulk and grain/ore facilities such as the Fairview Terminal and Ridley Terminals.
During 2006 and early 2007, the Canadian government converted the Fairview Terminal from a breakbulk terminal to a container terminal. The port has natural advantages on the great circle route from south China and Japan, a deep water harbor and a relatively small local population. The port also had terminal connections to the Canadian National Railway. The CN connects Prince Rupert with all of Canada and much of the US Midwestern heartland.
Today the Fairview Terminal on Prince Rupert's Island is operated by Maher Terminals of New Jersey in conjunction with the Prince Rupert Port Authority, the CN Railroad and the Canadian government. Capacity throughput for the terminal is 500,000 TEU's in its first phase of development. By 2010 however, the port is expected to handle as many as 2 million TEU's.
COSCO, China Ocean Shipping Company, the worlds sixth largest shipping company, in conjunction with its CKYH Alliance partners, will be calling on Prince Rupert for its Pacific Northwest Butterfly South Loop Service. This alliance includes China-based COSCO, Korean liner firm, Hanjin, Japan's K-Line, and Taiwan-based Yang Ming. The CKYH Alliance will call at Prince Rupert on a weekly basis with a string of nine 5,500 TEU vessels. Connecting to the CN Railroad's on-dock double stack trains, these carriers will be able to route containers from Hong Kong, Yantian and Yokohama directly to the heartland of North America.
The first containership to call at Fairview was the COSCO Antwerp, which discharged on October 30th, 2007.
Some of Prince Rupert's Island advantages are:
- Avoiding congestion in southern California. Fairview Terminal has CNR DST trains right on dock.
- The shortest route from South China available to North America
- By moving through Canada, American importers avoid US harbor maintenance taxes entirely.
- Transit times to points such as Columbus, Ohio from Hong Kong drop to as little as 18 days because of the short ocean transit and express CNR DST connections.
- The US West Coast Longshore Union (ILWU) contract expires in the spring of 2008. This route is a clear alternative.
Check out this video on Prince Rupert found on Youtube.com that was produced by the CN Railroad.
Certainly other carriers will follow the COSCO/ CKYH lead into Canada. However, I also think that Manzanillo, Mexico will become another equally valuable alternative to US West coast container discharge. For North American importers, (inclusive of the US, Canada and Mexico), the future may be non-US ports. The geographic benefits, coupled with modern technology could provide alternatives to heavy labor and environmental concerns in California. While spreading the number of containers inbound to the US over Canadian and Mexican ports may seem counter intuitive, it may well have a positive benefit in terms of the environmental footprint on America of increased liner traffic.
Eric
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