Defying expectations

"The real question is whether privatisation will improve the port’s efficiency and quality of service," Shaun Stevenson, Port of Prince Rupert
"The real question is whether privatisation will improve the port’s efficiency and quality of service," Shaun Stevenson, Prince Rupert Port
Development: DP World has invested heavily in Prince Rupert's Fairview Container Terminal. Credit: Port of Prince Rupert
Development: DP World has invested heavily in Prince Rupert's Fairview Container Terminal. Credit: Port of Prince Rupert

The little port that everyone thought couldn’t, has certainly done it. Dismissed as destined for disappointment when development started in earnest in 1975, Prince Rupert this month completed the second phase of its Fairview container terminal, with a capacity of 1.3m teu.

Total cargo volumes through the port this year are on track to exceed 21m tonnes, with container volumes forecast to reach a record 850,000 teu, rising to 1.1m teu in 2018.

Shaun Stevenson, vice-president of marketing, says the strategic plan for the next five to 10 years is “diversification of our business. We are working with DP World (Fairview owners) to expand services for exporters and importers, intensifying transloading, consolidation and associated activities.”

The long-term plan is to reach 100m tonnes, with containers at more than 2m teu.

“Traditionally, the port has been a gateway for exports and we want to get a better balance between imports and exports. A third of our import volumes are bound for domestic use while two-thirds of our exports are from Canada."

He says the traditional perception of being a conduit for the US no longer completely applies and that a rising percentage of commodities are to and from Canada.

“We will not get to the same scale as Vancouver – which is three times as large - but more shippers are discovering just how good our efficiency is.”

At least $300m will be spent on capital development over the next five years, while DP World will be spending more than $400m to increase the Fairview capacity to 2m teu. AltaGas, a mid-stream oil/gas developer is spending more than $400m on a propane export plant.

However, congestion and backups at Fairview caused a problem recently, with two carriers diverting traffic to Vancouver. Dwell times were reported to be as much as six days. “DP World could see this coming because of the construction work at Fairview and worked with carriers to divert cargo,” says Mr Stevenson. “The situation has improved greatly and dwell times are now three days and should drop to two days by the end of October.”

Digital future

Prince Rupert is harnessing digital tools and automation for logistics improvement to and from terminals. “Our emphasis is on maximising movement efficiency on the road and rail corridor to the port,” says Mr Stevenson.

As with other port authorities, Prince Rupert is non-committal on the subject of privatisation. “It’s up to the federal government to decide. But the real question is whether privatisation will improve the port’s efficiency and quality of service.”

Analysts note the biggest and most obvious advantage of Prince Rupert is its location in an undeveloped area. “They don’t have to go through the same rigorous process of facing public opinion and they have more room to grow,” says one.

Adds Prof Heaver of the Sauder Business School at the University of British Columbia: “Prince Rupert has been an undoubted success and has the advantage of a fairly simple structure. Rupert has resources available to provide good export services business selling to US.” He notes that part of its success rests with the efficient rail and intermodal systems that have evolved.

“Intermodal services have operated really well in Canada since rail moved to double stacking. The rate of growth of the ports has meant that possibly the rate of rail growth could have been greater than it has been.”

Marketing strategy emphasises the quicker transit from Asia compared with US ports: 9.7 days against 10.1 days for Southern California; shorter rail times: 4.1 days to Chicago against five days from Southern California; much better main channel depth: 35 metres against 25 metres; and berth depth: 17 metres against 10-16 metres.

Fairview has been able to berth 13,000 teu ships for some time now, and the new berth will have the length and draught for 20,000 teu ships.

Pilot times are said to be between two and six hours less than other major northwest ports.

“We will continue to compete with the US West Coast for market share on the Pacific trade,” says Mr Stevenson. “We have good geography and good services that are better than the other ports.”

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