Like any good mariner, the Port of Prince Rupert needs to know which way the wind is blowing, and at the moment there’s a possible storm brewing in Mexican waters, with a landfall heading for the Fairview Container Port project.
In an article in the business section of Wednesday’s Vancouver Sun, Wincy Leung has put together a piece that suggests the Port of Prince Rupert had best get on with it’s building plans before the dynamic of North American trade changes. Leung interviewed an industry specialist from the Boston Consulting Group, a fellow by the name of George Stalk Jr. who claims that Prince Rupert has the chance to turn itself into a destination port, which could be major money maker, but adds that time is being “frittered away” by the provincial and federal governments.
It’s one of those articles that will cause some sleepless nights at the Port Corp, in an industry where optics seem to be everything, suggesting that our community may be missing the wave could affect the confidence of the shipping lines seeking a spot to berth their ships. Leung did not receive a reply from the Port Corporation, so did not provide any feedback from them on the theories being presented to the Prince Rupert Port Corporation by Mr. Stalk.
One comment in particular should set alarm bells ringing down at the Atlin Terminal, Stalk suggests that “The longer it takes Prince Rupert to get its act together – the less likely it will be a destination port and – it will be a nice story that never happened.”
Not the kind of publicity that the Port Corporation would want to hear after all their hard work thus far on the project. Words that could resonate around the shipping world and provide for needless energy to be used proving the illusion to be wrong..
It’s an interesting read which takes kind of a crystal ball approach to where the shipping industry is heading, how competitive it is and how one mis-step by one location could be a bonanza for another. Check it all out below.
PRINCE RUPERT FACES MEXICAN PORT BATTLE
INDUSTRY
Container Traffic Could head south expert warns
By Wincy Leung
Vancouver Sun
Thursday, March 23, 2006
Page C1 and C2
The Port of Prince Rupert could lose out on lucrative shipments if its expansion is outpaced by Mexico’s port development plans, an industry expert is warning.
George Stalk Jr., senior vice-president and director of Boston Consulting Group, said Prince Rupert has the opportunity to turn itself into a destination port, which could pull in higher profits. But time is being “frittered away” by the provincial and federal governments.
“If it can get itself up and running quickly – it will attract the premium segment (of shipments) and make more money,” Salk said in an interview.
“The longer it takes Prince Rupert to get its act together – the less likely it will be a destination port and – it will be a nice story that never happened.”
Mexican officials announced that they plan to study the feasibility of developing the harbour of Punta Colonet, about 250 kilometers south of the U. S. border, into a port that would be comparable to facilities at Los Angeles and Long Beach.
Mexico is also planning to expand container ship capacity at the country’s deepest port, Lazar Cardenas, as the country hopes to capture overflows from the already-clogged
U. S. ports.
While these Mexican ports would immediately drain shipping volumes from the U. S, Ports, they would likely have little short term impact on volumes at Prince Rupert and Vancouver, since the bulk of shipments to B. C. are destined for the rest of Canada, stalk said.
But before Mexico charges ahead with its plans, measures need to be taken to ensure freight can easily reach the U. S. from Prince Rupert, he added.
The Port of Prince Rupert plans to open a new container facility by 2007, capable of handling 500,000 TEU’s, or twenty foot equivalent units, per year. Future plans include expanding its capacity to two million TEU’s per year.
“If Prince Rupert reached that point, Mexico wouldn’t make that much of a difference,” Stalk said.
Otherwise, the port would see only low-value overflow shipments. “It will carry companies not wanting to pay a lot,” he said.
Boosted by surging Asia-Pacific trade, freight demand on the west coast of North America has been growing at a rate equivalent to one Port of Vancouver a year, according to Stalk.
But, he said, authorities have shown little sense of urgency in addressing the influx.
In a report titled, “The China Rip Tide: Threat or Opportunity.” Stalk wrote that close to 100 new container loading berths will be built in China over the next several years. In comparison, only a handful of berths are planned for the west coast of North America.
Vancouver Port Authority spokesman Duncan Wilson said most of the expansion projects at the Vancouver port are on schedule, though expansion plans at the Delta Port are about a year behind due to delays to its environmental assessment.
”We’re planning on tripling our capacity by 2020. That’s a substantial expansion,” Wilson said.
“I think the criticism is ….. we should be building more, but sport infrastructure must be expanded at the same rate as the land-side transportation structure,” such as road and rail developments, he added.
Repeated calls to the Prince Rupert Port Authority were not answered by Wednesday evening.
wleung@png,canwest.com
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