By Mike Round
March 25, 2007
North American trade with Asian countries, and specifically, China has been growing at the rate of two million tons per year. That yearly increase is equivalent to the entire volume of freight that passes annually through the Port of Vancouver, British Columbia. Expansion of existing North American ports to handle this increase has been slow and inadequate. Existing ports were intentionally sited in major high-density urban areas, since the cities themselves represented substantial markets. However, as world markets grew, transshipping to distant destinations beyond the large port cities became more important and increasingly more difficult. The congestion in cities restricts a port's ability to expand and accommodate larger facilities. Presently container ships entering existing ports may sit for days on anchor waiting to be off-loaded. North American ports are maxed out and severe bottlenecks in the flow of freight are occurring. The desperate need for more capacity to handle the ever-increasing trade with Asia has driven the development of the Prince Rupert Fairview Container Terminal.
Prince Rupert has other advantages beyond being just a new facility to handle the overflow container traffic. It is the closest North American port to China; it is ice-free year round; it is connected by rail; it is the second largest deep-water port in the world; and it has essentially unlimited room for expansion. The first phase of this $575 million port development will be completed this year, 2007, and future expansion from 500,000 TEUs (Twenty foot Equivalent Units) to 2,000,000 TEUs is scheduled for completion by 2010. If necessary, the Fairview site has the potential to expand to handle over 4,000,000 TEUs. So far, the project is on budget and on time.
The Fairview Container Terminal will be run by Maher Terminals of Canada a subsidiary of Maher Terminals of New York. Maher is the largest container terminal operator in the Port of New York and New Jersey and has signed a thirty-year lease to operate the Prince Rupert terminal. Maher has invested over $60 million dollars to install three huge super post panamax cranes that can lift 60 tons and reach 200 feet across the deck of the world's largest container freighters to pick cargo. These cranes will be moving containers across the dock from ship to train sometime this October.
CN rail has expanded and upgraded the storage yard tracks at the terminal to hold 17,000 feet of train and has spent $155 million dollars buying and upgrading the rail lines to accommodate double stacked container cars that will haul containers all the way to the United States mid-west. 50 new locomotives have been purchased to provide the transportation needs for this increased rail service.
Most large urban port facilities have a significant portion of their containers loaded on thousands of trucks, which causes traffic congestion in and around the port and slows the container transfer operation considerably. The Prince Rupert operation is unique in that it will be 98% pure inter-modal transfer of containers - that is, transferring containers from ships directly to trains. This highly efficient, high-speed transfer of containers could be the biggest impediment to Alaska's successful participation in this venture. Alaska's window of opportunity lies in the remaining 2% of capacity that allows for delivery of containers by other means, such as truck, barge and ferry. Alaska needs to be involved in the planning and administration of this facility to ensure that access for our shipping needs is accommodated.
While 2% is a small fraction of the total volume, it still represents 5,000 forty-foot containers, which are the standard size containers hauled by truck. How much of those five thousand truckloads will be Alaska freight will depend on Alaska's ability and political will to take advantage of this opportunity. The Alaska Marine Highway System needs to provide ferry service that will allow southeast Alaska to connect to this "transformational" infrastructure. The Southern Gateway Shuttle ferry, presently on the drawing board for operating in 2010, has yet to be designed or funded. This important transportation link needs to transition from the drawing board to a working reality on a more stepped-up time line. Alaska will need reliable daily ferry service to the Prince Rupert facility in the summer of 2008.
Presently Prince Rupert enjoys about 400,000 independent visitors per year. Most of these visitors arrive by car, train and ferry. If daily shuttle ferry service between Prince Rupert and Ketchikan is provided, southeast Alaska will definitely see an increase in the number of independent tourists. As Prince Rupert inevitably grows there will be demand for more passenger train service to the northwest and increased opportunity to attract independent travelers to Alaska. One of the existing fast ferries could be assigned this route during the seasonal high-traffic periods while the Southern Gateway Shuttle Ferry is being fabricated. This mainland terminal connection to North America could soon become the major AMHS feeder line providing needed passenger and freight revenue.
With two trains per day and 108 hours travel time between Rupert and Chicago, seafood processors have the opportunity to send out fresh seafood to these new markets. Seafood is currently shipped from Alaska to China, Japan and Taiwan for reprocessing, and the Prince Rupert terminal will be looking to fill back haul containers at discounted rates. While containers imported from China to North America will likely be assessed a rate of between $3500 to $4500 back-haul export rates should be between $300 and $700.
With the shipping and transportation opportunities offered by this facility, there will be advantages and incentives for new manufacturing businesses to set up shop and do business in southeast Alaska. Businesses producing manufactured wood products or supplying shelf-stable, value-added seafood products produced in southeast Alaska could bring year round stability to our seasonal economies. Connecting Alaska to Prince Rupert with reliable daily ferry service is vital to Alaska's economic interests. If businesses can fill a shipping container, they should be able to take advantage of the competitive freight rates offered by this new facility. Alaska needs to be involved with and focused on connecting to this "new world of opportunity" coming this year to our southern border.
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