Fairview terminal opens up a new world of opportunity

Despite a Canadian dollar on the rise, the Northwest pacific gateway of Fairview Terminal stands ready to capitalize on world trade.

In a front page story on Thursday, the Daily News reports on the findings of Peter Hall, the chief economist for Export Development Canada who finds that a lack of container facilities in North America will more than make up for the strong dollar of late. A situation that should help to make the Rupert port a viable and well utilized shipment point.


TOP ECONOMIST SEES ONLY GOOD ON HORIZON FOR RUPERT'S PORT

By Leanne Ritchie
The Daily News
Thursday, November 01, 2007

Pages one and three

The loonie may be rising above the U.S. dollar, but it's not going to crush the prospects of the newly opened Fairview Container Terminal, according to an economist with Economic Development Canada.

Peter Hall, the deputy chief economist for Export Development Canada and author of several articles on the new facility, said the lack of container facilities outweighs the impact of the rising Canadian dollar.

"I don't think it (the high Canadian dollar) will impact it much at all for a couple of reasons. We believe the West Coast of North America is headed for another capacity crunch in terms of port capacity," said Hall.

In 2004, importers sending goods through the West Coast of North America saw a large backlog at ports from Los Angeles to Vancouver right before the Christmas season, causing financial loses for both importers and exporters.

While the investment that was made following the 2004 problems was sufficient to tide it over for another couple of years, Asian shipments to the West Coast have continued to grow since then and Economic Development Canada does not expect that growth to stop.

“The way we expect them to continue growing, even with the global slowdown, we foresee another port capacity crunch on the West Coast by the end of 2009,” said hall. “The bottom line is shipping companies will be looking for outlets like Prince Rupert to help manage their risk on the West Coast.”

The first ship, the COSCO Antwerp, arrived in Prince Rupert Tuesday night and began unloading at Fairview Terminal Wednesday morning.

Meanwhile, the Canadian dollar soared to heights not seen in nearly half a century Monday, briefly rising above US$1.05.

“Should we be worried about the Canadian dollar? Clearly, everybody is worried with the Canadian dollar going over parity and the amount of movement that has happened with the dollar what is going to happen over the next while,” said Hall.

“However, by the end of next year, we expect to see a dollar in the 85 to 90 cents zone, with the way global growth dynamics are going, we expect a slow-down next year that will take some of the heat out of the commodity prices and that is really giving some of our dollar some of its loft,” said hall.

Meanwhile, a shortage of bulk export capacity also means CN stands a good chance of finding ways to fill the backhaul of empty containers to Asia, he said. Using empty containers for bulk commodities is a growing trend.

“Commodities for which China has a great appetite will actually be put in these containers. The industry is trying to find solutions for that right now. It is in its infancy, but I believe that will gain some traction as we go forward. There is a tremendous amount of constraint in terms of dry bulk right now. There aren’t enough ships, and lease rates are going through the roof, so the time is right to look for alternatives and containers are being looked at very seriously,” said Hall.
In addition, the province should also see growth in its exports during the next few years, according to Economic Development Canada.

The value of British Columbia’s provincial exports are expected to increase by 1.7 per cent in 2008 after declines of 2.4 per cent in 2007 and 2.0 per cent in 2006.

“The housing-led economic slowdown in the United States is a major challenge for B. C.’s forestry and wood product manufacturers,” said Stephen Poloz, senior vice-president of corporate affairs and chief economist. “The province’s forestry sector is going to continue to suffer from the U. S. housing recession through 2008. On the plus side, exports to China remain solid, led by exports of pulp, metal ores and machinery and electrical equipment.”

Higher export prices and stronger shipments are forecast to boost coal exports by nearly 22 per cent in 2008, potentially good news for Ridley Terminals.