1. 1 Northwest Ports and the Gateway Initiatives Anne V. Goodchild Assistant Professor Department of Civil and Environmental Engineering University of Washington

2. 2 2

3. 3 3 Research Port elasticity study with Dr. Leachman Port elasticity study with Dr. Leachman Impact of Port of Prince Rupert on regional trade Impact of Port of Prince Rupert on regional trade Transportation resilience Transportation resilience –Analysis of past disruptions at PR Transloading and warehousing Transloading and warehousing Cross border research Cross border research Clean Trucks Program Clean Trucks Program

4. 4 4 Diversity in West Coast Ports Growth pattern Growth pattern Discretionary cargo Discretionary cargo Approach to drayage truck emissions Approach to drayage truck emissions Congestion Congestion Landside infrastructure Landside infrastructure –Port access –Urban region

5. 5 5 West Coast Container Volumes

6. 6 6 Discretionary Cargo The cargo that doesn’t have to go through a particular port The cargo that is transloaded Importing via the East Coast is getting more competitive Some companies have recently moved to a 4-5 port strategy – –In this case consolidation-deconsolidation is less effective With a one port strategy consolidation-deconsolidation is getting more competitive $30 would remove transload volume in the Pacific Northwest $30 would have very little impact on Southern California

7. 7 7 The line to Prince Rupert is a spur line The line to Prince Rupert is a spur line No alternative routes No alternative routes Required switching activities in Prince George Required switching activities in Prince George

8. 8 8 Reliability Threats Highway 16 west at Shames Flats and 3 to 4 km west of Shames Flats has opened to single lane alternating traffic as of noon June 10, 2007CN workers begin the long task of rebuilding the rail line between Terrace and Prince Rupert now that the Skeena has started to recede.

9. 9 9

10. 10 Distribution Centers About 33% of Port of Seattle traffic use a warehouse in the Green River Valley (2005) About 33% of Port of Seattle traffic use a warehouse in the Green River Valley (2005) 18% of 2007 Port of Seattle traffic is transloaded 18% of 2007 Port of Seattle traffic is transloaded Provide capability to use consolidation- deconsolidation strategy Provide capability to use consolidation- deconsolidation strategy Provide economic benefit to importers from inventory management and transportation cost Provide economic benefit to importers from inventory management and transportation cost Provide regional economic benefit Provide regional economic benefit

11. 11 Unique elements of NW Ports More price sensitive More price sensitive More discretionary cargo More discretionary cargo Less transloading Less transloading Relatively weak local demand Relatively weak local demand Regional/International competition Regional/International competition Regional/International cooperation Regional/International cooperation Servicing Alaska trade Servicing Alaska trade

12. 12

13. 13 Canada’s gateway and trade corridor initiative Canada’s strategy has resulted in heavy investment in a “new” port Canada’s strategy has resulted in heavy investment in a “new” port –Not all cargo needs to move through a congested region –Has capacity Consolidation activities in Vancouver Consolidation activities in Vancouver Separation of rehandled/local cargo from discretionary cargo Separation of rehandled/local cargo from discretionary cargo Primarily serving midwest markets Primarily serving midwest markets

14. 14 Currently PR serving US midwest Currently PR serving US midwest –Imports –Exports SE Alaska continues to be served by Washington ports SE Alaska continues to be served by Washington ports

15. 15 US Policy Growing consensus for a national freight program Growing consensus for a national freight program National Surface Transportation Policy and Revenue Study Commission, AASHTO, ARTBA, NRC, ATA, AAPA, US Chamber, GAO GAO recommends “a national strategy to transform the federal government’s involvement in freight transportation projects. This strategy should include defining federal and nonfederal stakeholder roles and using new and existing federal funding sources and mechanisms to support a targeted, efficient, and sustainable federal role.”

16. 16 Policy Suggestions National strategy for planning & investment Merit-based criteria for prioritizing projects Predictable, dedicated, sustained funding for freight infrastructure Partnership with the private sector to anticipate and meet the needs of system users New user fees

17. 17 Growing Coalition Coalition for America’s Gateways and Trade Corridors National Freight Mobility Infrastructure Act Coalition for America’s Gateways and Trade Corridors National Freight Mobility Infrastructure Act –Creates National Freight Mobility Infrastructure Fund Merit-based distribution criteria Merit-based distribution criteria Multi-modal eligibility Multi-modal eligibility National in focus National in focus –Creates New Funding Mechanism 1% tax of the cost of transportation of ALL goods (domestic and international; all modes) 1% tax of the cost of transportation of ALL goods (domestic and international; all modes)

18. 18 CAGTC Participants Coalition for America's Gateways and Trade Corridors Washington State DOT/ Port of Tacoma California Air Resources Board Association of American State and Highway Transportation Officials ITS America National Railroad Construction and Maintenance Association National Industrial Transportation League Association of American Port Authorities Agriculture Transportation Coalition West Coast Corridor Coalition Mississippi Valley Freight Coalition National Association of Manufacturers American Association of Port Authorities Waterfront Coalition American Road & Transportation Builders Association American Public Transportation Association Owner-Operator Independent Drivers Association Association of American Railroads AAA

19. 19 Discussion

20. 20

21. 21 Open Questions Being closer to Asia is a significant asset Being closer to Asia is a significant asset Significant economic activity will occur in Prince Rupert Significant economic activity will occur in Prince Rupert Transit of containers between Canada and the US is not a deterrent Transit of containers between Canada and the US is not a deterrent Container management Container management

22. 22 Prince Rupert Container Terminal Performance to 11-March-08 19 Vessel Calls All vessels arrived & departed on schedule Off loading/loading 22 containers/hour 35,600 TEUs handled 36.5% Backhaul - fully laden containers (less than Seattle, Tacoma, and Vancouver) Maximum Dwell Time: 2 Days 100% of containers scanned for radiation

23. 23 Container Management Containers imported into Canada must leave the country within 30 days Containers imported into Canada must leave the country within 30 days They can only be used for one repositioning move They can only be used for one repositioning move –This may favor the delivery of containers to the US, where laws are less restrictive Most shipping lines are under contract to balance east and westbound moves and are subject to penalties if they are not Most shipping lines are under contract to balance east and westbound moves and are subject to penalties if they are not –Unless export potential is exploited, it will be expensive for shippers to return the containers to Prince Rupert, impacting the total cost

24. 24 Transloading

25. 25 Prince Rupert Terminals Grain Terminal Coal/Sulphur/Wood Pellet Terminal CONTAINER TERMINAL Phase 1 & 2 CONTAINER TERMINAL 2 WATER DEPTH Inner Harbour: 35 - 44 metres Wharf: 18.7 metres Ridley Island

26. 26 1 st CN Container Train Departure Nov. 1 2007

27. 27 Demand Shipping lines will decide whether or not to use Prince Rupert Shipping lines will decide whether or not to use Prince Rupert They will choose to use it if meets their needs to control cost while maintaining service quality and reliability They will choose to use it if meets their needs to control cost while maintaining service quality and reliability There is a complex web of relationships and economics that drive these decisions There is a complex web of relationships and economics that drive these decisions Demand for shipping line services is driven by shipper demands, and is a function of cost Demand for shipping line services is driven by shipper demands, and is a function of cost Shippers will find it more attractive to use Prince Rupert if they can finance the cost of the return trip with exports Shippers will find it more attractive to use Prince Rupert if they can finance the cost of the return trip with exports They will choose to service Prince Rupert first if import demand is of high volume and high priority They will choose to service Prince Rupert first if import demand is of high volume and high priority

28. 28 Reliability Lean supply chains are a source of competitive advantage Lean supply chains are a source of competitive advantage Increased length, frequency of disruption Increased length, frequency of disruption Shippers are looking for reliability (uncertainty is the enemy of logistics) Shippers are looking for reliability (uncertainty is the enemy of logistics) e.g. e.g. –Port of Seattle 2005 volume increase –Walmart moves to a 5 port US import strategy

29. 29 Prince Rupert Advantage – Hong Kong Vancouver Seattle Los Angeles Distance from Hong Kong (Nautical Miles) 5,286 5,777 5,768 6,380 Prince Rupert

30. 30 Prince Rupert Advantage – Kobe Vancouver Seattle Los Angeles Distance from Kobe, JA (Nautical Miles) 4,101 4,554 4,536 5,137

31. 31

32. 32 Prince Rupert Container Terminal

33. 33 100% Radiation Scanning

34. 34 Edmonton – 39 hrs Winnipeg – 61 hrs Halifax Chicago – 99 hrs Montreal – 115 hrs Prince Rupert Prince George Toronto – 108 hrs Vancouver – 61 hrs New Orleans Halifax Memphis – 117 hrs Saskatoon – 47 hrs Calgary Memphis Competition UP/Los Angeles – 112 hrs UP/Seattle – 120 hrs BNSF/Los Angeles – 130 hrs

35. 35 Export/Backhaul Opportunities Alaska and BC seafood forest products pork soybean recycled paper cotton special agricultural products - pulses, grains, oilseeds malt, cubes, pellets, hay beef poultry milk bottled water Leather/ hides

36. 36 Port of Prince Rupert – Export Backhaul Opportunities Alaska and local Seafood (est. 75,000 – 100,000 TEUs per annum) Alaska and local Seafood (est. 75,000 – 100,000 TEUs per annum) Pork (est. 100,000 – 160,000 TEUs per annum) Pork (est. 100,000 – 160,000 TEUs per annum) Beef (est. 40,000 – 80,000 TEUs per annum) Beef (est. 40,000 – 80,000 TEUs per annum) Forest Products (est. 120,000+ TEUs per annum) Forest Products (est. 120,000+ TEUs per annum) Special Agricultural Products (est. 60,000 – 100,000 TEUs per annum) Special Agricultural Products (est. 60,000 – 100,000 TEUs per annum) –Pulses- Grains and Oilseeds –Malt- Cubes, Pellets, Hay Other (originating in Chicago-Memphis area) Other (originating in Chicago-Memphis area) –Cotton (est. 160,000 - 180,000 TEUs per annum) –Recycled paper (est. 40,000 - 100,000 TEUs per annum) –Soybeans (est. 130,000 to 170,000 TEUs per annum) Petrochemicals/plastics (to be determined) Petrochemicals/plastics (to be determined) Developmental (to be determined) Developmental (to be determined) –Log and modular home manufacture –Bottled water

37. 37 Prince George Inland Port Prince George Inland Port –120,000 TEU’s of forest products annually Grand Prairie Intermodal Container Facility Grand Prairie Intermodal Container Facility –$2.5 million of land donated by Alberta Gov’t. Access improvements to CN Intermodal in Saskatoon Access improvements to CN Intermodal in Saskatoon –$20 million from the APCGI. Access improvements to CPR Intermodal in Edmonton Access improvements to CPR Intermodal in Edmonton –$75 million from the APCGI. CN Edmonton Grain Distribution Centre CN Edmonton Grain Distribution Centre –$4 million facility opened Nov. 16, 2006 –Handling high-value specialty crops Gap Analysis-identified Opportunities Gap Analysis-identified Opportunities –Container Services: refrigeration, stuffing, storage & repair –Bonded warehousing –Ridley Island Logistics Park Port of Prince Rupert – Sample Initiatives to Stimulate Export Traffic

38. 38 PR—Prince George, British Columbia

39. 39 International Intermodal Freight West Coast handles the vast majority of Asian imports West Coast handles the vast majority of Asian imports Moved via landbridge to midwest and East Coast (double stack trains) Moved via landbridge to midwest and East Coast (double stack trains) Rapid growth in container volumes as Asian imports have grown Rapid growth in container volumes as Asian imports have grown

40. 40 Port of Seattle 4 container terminals, 25 cranes 4 container terminals, 25 cranes Natural deep water harbor Natural deep water harbor 4 RR routes to inland markets (2 major RR hubs within 1 mile) 4 RR routes to inland markets (2 major RR hubs within 1 mile) 10 container berths up to 50 ft (15 m) 10 container berths up to 50 ft (15 m) Vessel calls: 1,221 (2007) Vessel calls: 1,221 (2007) TEUs (2007): 1,973,504 TEUs (2007): 1,973,504 Containerized metric tons (2007): 14,584,816 Containerized metric tons (2007): 14,584,816

41. 41 Port of Tacoma 5 container terminals 5 container terminals 4 dockside intermodal rail yards 4 dockside intermodal rail yards Upland infrastructure with road network & easy access to interstate system Upland infrastructure with road network & easy access to interstate system Natural deep water port Natural deep water port Available land for expansion Available land for expansion

42. 42 Port of Vancouver TEUs (2007): 2,307,289 (increase to 4 million by 2012) TEUs (2007): 2,307,289 (increase to 4 million by 2012) Million tons/cargo (2007): 82.7 Million tons/cargo (2007): 82.7 17 bulk terminals, 25 marine cargo terminals 17 bulk terminals, 25 marine cargo terminals Linked to 3 RR with double stack capacity Linked to 3 RR with double stack capacity

43. 43 Prince Rupert Port > 98% marine to rail intermodal > 98% marine to rail intermodal Annual capacity: 500,000 TEUs Annual capacity: 500,000 TEUs 360 metre container quay 360 metre container quay 18.7 metre berth depth 18.7 metre berth depth 3 Ultra Post Panamax Cranes 3 Ultra Post Panamax Cranes 7 working tracks (5,500m), 6 storage tracks (6,100m) 7 working tracks (5,500m), 6 storage tracks (6,100m)

44. 44 Leachman For direct inland movement of marine boxes, the break point in declared value at which it is cheaper to import via the West Coast instead of all-water movement to Eastern markets fell from $46 to $40 per cubic foot.

45. 45

46. 46