Is it the beginning of a great relationship?

The ties that bind Memphis, Tennessee and Prince Rupert, BC are steel ones, twin rails on the CN lines that stretch for thousands of kilometers, but soon could make each city’s future forever entwined.

The Globe and Mail has examined the sudden interest in a far off port from the heart of the American South east, Memphis a transportation hub for the southern USA is counting on container traffic through the Prince Rupert port to make their town a major gateway into international trade.

The potential for a massive change in the way that goods are shipped to and from North America is making two diverse locations on a map, that much closer and that much more optimistic for better times for each other than anyone might ever have imagined.

Prince Rupert finds Mississippi soulmate
WENDY STUECK
From Tuesday's Globe and Mail
May 21, 2007 at 10:13 PM EDT

Vancouver — Two years ago, Dexter Muller had barely heard of Prince Rupert, B.C., and had no clue it was as much as two days closer by ship to Asia than better-known West Coast ports such as Vancouver and Los Angeles.

These days, Mr. Muller has no trouble finding Prince Rupert on a map. In March, Mr. Muller – vice-president of industry group Memphis Regional Chamber – spoke at a Memphis conference focused on trade opportunities created by the new container port under construction in the B.C. city.

He's handing out DVDs that highlight Memphis-Prince Rupert trade connections. The DVDs, part of a marketing campaign being conducted by the Memphis Regional Chamber, Canadian National Railway Co. and the Port of Memphis, paint Prince Rupert as an alternative to overloaded ports such as Vancouver and Long Beach, and highlight its rail connections to Memphis, a transportation hub with easy access to a host of major cities in the United States.
He's not the only one becoming more familiar with Canadian geography.

“It shows you how globalized trade has become when you have a lot of people in Memphis, Tennessee, who are probably more familiar with Prince Rupert than some people may be in Canada,” says Mr. Muller, a senior vice-president with the regional chamber.

The buzz in Memphis around Prince Rupert comes as the B.C. city's new container terminal is moving from a concept to operations, making good on a decade's worth of planning and marketing based on the northern city's deepwater port, rail connections and relative proximity to export centres such as Shanghai and Hong Kong.

This month, China Ocean Shipping Co. signed on as the terminal's first official customer. The terminal is scheduled to begin operations in October.

“Up until now, we have been building infrastructure,” says Don Krusel, president and chief executive officer of the Prince Rupert Port Authority. “Now we have a customer, which proves that the infrastructure is going to be successfully used.”

Initially, the concept was a tough sell, Mr. Krusel says. Container terminals have traditionally been located in or near major urban centres, allowing for quick unloading of containerized cargo, whether T-shirts, televisions or household goods.

But over the past couple of decades, ships have grown bigger, the volume of goods being shipped between Asia and North America has ballooned and congestion has become commonplace. A recent report by the Boston Consulting Group said companies should consider alternatives such as air freight or relocating some operations to avoid port-related traffic jams.

Prince Rupert provides a different “gateway” model, Mr. Krusel says, based on the idea that cargo coming into the port can be loaded directly onto rail cars and shipped to its ultimate destination.

That's where Memphis comes in.

The city, with its long-time port on the Mississippi River, is hooked into five rail networks, including CN, and so handles many ocean-going freight containers coming from Asia and destined for cities throughout the United States, Mr. Muller says.

Currently, most of the containers coming through Memphis come via Los Angeles-Long Beach, he says. Starting this fall, an increasing number – somewhere in the neighbourhood of 1,000 a week – are expected to come via Prince Rupert.

“We believe this will open up opportunities, because companies are looking for alternatives,” Mr. Muller says.

Memphis is not the only place hoping to take advantage of the Prince Rupert connection. Industry groups in Alaska are keen on the container terminal as an avenue for Alaskan exports, and the terminal is also generating interest in Alberta, Saskatchewan and Manitoba, Mr. Krusel says.

Less expensive, faster container shipping options through Prince Rupert could mean opportunities for Canadian goods such as B.C. seafood, Alberta beef or modular housing components made from B.C. lumber, he adds.

The Prince Rupert container terminal is a joint project of the provincial and federal governments, the Prince Rupert Port Authority, CN, and Maher Terminals, the New Jersey-based company that will run the B.C. facility.

Prince Rupert already has coal and grain shipping facilities and a cruise ship terminal. But the container terminal is seen as the facility's bid for the big leagues of the global shipping game.
The first phase of the facility will have a capacity of 500,000 20-foot-equivalent units, or TEUs, making it a relatively small player compared with, for example, the Port of Vancouver, which handled 2.6 million TEUs last year and has projects under way to boost its capacity to four million TEUs.

The Prince Rupert Port Authority has begun work on the second phase of the container terminal, but those plans are running into stiff opposition from two Indian bands that maintain they have not been adequately consulted on the first phase of the project.

Last month, those bands – the Las Kw'alaams and Metlakatla – said they would not allow phase one of the terminal to begin operations until their concerns had been addressed, threatening “direct protest” if their concerns were not addressed.

In response, the Prince Rupert Port Authority said the federal government signed off on the consultation process for the first phase of the terminal last year and that the port authority has already begun consultations with Tsimshian First Nations, including the Lax Kw'alaams and Metlakatla, for the second phase.