The Great Canadian Port Give Away: Prince Rupert

And what a lot of smiling faces there were. So long Canada-Hello China!

Canada port eyes pot of gold at end of downturn

By Earle Gale (China Daily)
Updated: 2009-07-08 08:00

Prince Rupert on Canada's northernmost west coast is considerably closer to Asia than other North American container ports - meaning imports flow into North America days faster than through its rivals.

A seaside town in the shadows of Canada's West Coast mountains that calls itself the "City of Rainbows" will be looking for its pot of gold at the end of the economic downturn.

With a population of 13,000, Canada's most rain-soaked city (it gets over 250 cm a year) is awash with totem poles, bald eagles and boarded-up storefronts.

To many, it might look like an unusual boomtown-in-waiting but experts believe a bright future is on the horizon, thanks to the fact that Prince Rupert is 4,642 nautical miles from Shanghai while Los Angeles is 5,810 miles away.

After all, distance is time, and time is money in the international shipping business and Prince Rupert's brand new container port is being touted as Asia's next major gateway into North America.

"Our stars have aligned," said Don Krusel, Prince Rupert Port Authority's president and CEO less than two years ago when the port opened.

"Our timing couldn't have been better to bring on stream this high-performing container terminal to anchor a new express trade corridor. We will be able to offer both Asian and North American shippers unparalleled reliability, efficiency and speed in moving their products through our port."

It was a proud day for Krusel, who had been championing Prince Rupert and its underutilized port 770 km north of Vancouver for a long time in September 2007 when the new container port welcomed its first ship. He was sure the tide was about to turn for Prince Rupert after years of high unemployment.

When Krusel started at the port authority - as its manager of finance and administration in 1987 - the tiny facility shipped out felled trees, coal and grain and handled almost no imports.

But Krusel couldn't help noticing the port - being about as far north and west as you can get in North America - was much closer to Asia than the established West Coast terminals and he was sure it was the right place for a container handling facility.

Indeed, that proximity to Asia was the very reason the town was founded in 1910 by railway company executive Charles Melville Hays - as a conduit for China's silk exports.

Hays died aboard the Titanic in 1912 and his dream all but died with him.

Prince Rupert languished, overlooked and underused, for the next nine decades.

"Port development has taken a long time," admitted Mayor Jack Mussallem. "Ever since 1910 and the sinking of the Titanic, with Charles Melville Hays on board, we have had some port facilities in place: coal and grain export terminals, " but little else.

But in 2007, after a $170-million partnership between the Port Authority, Maher Terminals, Canadian National Railways and two levels of the Canadian government, the old port was enlarged and equipped with expanded rail sidings and an array of container-handling hardware.

Chinese cranes

Three massive cranes, each weighing 1,800 tons and towering 80 m above the dockside, now dominate the skyline.

Built by ZPMC of Shanghai, the cranes, and the exceptionally deep natural harbor meant tiny Prince Rupert could unload the world's largest container vessels.

"Now, the first phase of the container port can handle half a million containers a year," Mussallem said.

The grandson of Lebanese immigrants who moved to Prince Rupert in 1910 when the town was brand new, he is well aware of how patiently locals have waited for their world-class port.

"It is our destiny," he said.

Stockwell Day, Canada's minister of international trade, is fond of pointing out to foreign shippers that Prince Rupert offers a three- to five-day time-saving on an average 17-day trip from Asia to North America.

But if Prince Rupert thought it could sit back and let the Asian exports flow in, it was in for a rude awakening. The tide changed quickly after the new container port opened two years ago when the world was lunging into economic recession.

With North American consumers no longer thirsting for Asia's exports, the port that can handle 500,000 20-foot containers a year offloaded only 182,000 from 78 vessels in its first year.

And with China exporting 26.4 percent less in May 2009 than it did one year earlier, the short-term prognosis is not good.

Local politician Gary Coons, who represents the city and surrounding area in the provincial legislature, admitted people are disappointed.

"The port, so far, has not lived up to expectations," he said. "I believe many of us are disillusioned at this point in time."

But he is in no doubt it will become one of the world's premier container-handling facilities.

"As soon as markets stabilize and shippers realize the benefits of the 'Northern Gateway' ... Prince Rupert will be a major player," Coons predicted.

And it is with that sort of optimism that Prince Rupert is pushing forward with $600-million plans to expand the container port, so that by 2014, it will be able to handle two million containers.

Nathan Cullen, the local Member of Parliament who represents the region in Canada's federal chamber in Ottawa, is in no doubt that the port's future is inextricably linked with Asia's prosperity.

"This port will grow and become a major player on the western shipping front," he said. "It allows the city to diversify itself at a critical time in its recovery it's critical for the country to have alternate routes with a growing Asian market."

"Time is money," added Mussallem. "Buyers and customers want just-on-time delivery. So the question is: 'What route would you choose?'"

It's taken 100 years but Prince Rupert believes its destiny, so closely linked to China's prosperity, will finally be realized at the end of the economic downturn.

Dale McLean, chair of the board of directors of Prince Rupert Port Authority, and Wen Jianyao, vice-president of Ningbo Port Group, sign an agreement on the container port on Sept 12, 2007. Barry Bartlett/Prince Rupert Port Authority