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June 10 2019

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20 The Journal of Commerce | June 10 2019 www.joc.com Canada Shipping and Trade Special Report THE PORT OF Prince Rupert plans to double its container capacity by 2020 and ultimately quadruple its capacity, sending a bold message as fellow British Columbia port Van- couver grapples with its own plan to inject much-needed handling capacity into its terminals. The Prince Rupert container terminal master plan released in May outlines projects that will potentially add 6 million to 7 million TEU of capacity and, in the short term, help to accommodate growth on Canada's Pacific Coast. The announcement came amid conflicting proposals by the Vancouver Fraser Port Authority (VFPA) and its largest tenant, GCT Canada, on how Canada's largest port will expand to accommodate future growth. Last year, Canada's ports, like those in the US, found their resources taxed by events beyond their control, including weather that affected intermodal rail operations in Canada and the US, poor vessel on-time performance in the trans-Pacific, capacity issues at inland rail hubs, and the US-China tariff war that dis- rupted normal shipping patterns and produced unexpected cargo surges. Ports must scramble to develop surge capacity to handle such unscheduled events. Prince Rupert, located 500 miles north of Vancouver, in 2018 handled a record 1,036,009 TEU, up 12 percent over 2017, according to port statistics for laden and empty containers. Vancouver handled 3.4 million laden and empty TEU, a year-over-year increase of 4.4 per- cent, according to port statistics. The two ports, both of which have direct intermodal rail connec- tions to the US Midwest and beyond, have ambitious expansion plans but, given the lead time required to secure environmental permits and meet local construction requirements, the big-ticket expansion projects won't be completed until the mid- to late- 2020s, port managers have told The Journal of Commerce. Key gateway in Asia trade In terms of accommodating Canada's trade with Asia, Prince Rupert and Vancouver together are viewed as a key gateway, so devel- opment projects at the two ports complement each other. According to a report by Black Quay Consult- ing, Vancouver and Prince Rupert combined have a current capacity of 5.34 million TEU. The 4.4 million TEU handled by the two ports in 2018 means Vancouver and Prince Rupert are operating at 82.4 percent of their combined capacity. The industry standard for the terminal operating industry is that service levels deteriorate when facilities exceed 80 percent utilization and their ability to respond to container surges is compromised. As a result, Prince Rupert's master plan is looking at short-and longer-term projects to meet the port's growth objectives. In the short term, a project announced last year by the port and DP World will expand the Fairview container terminal from 1.35 million TEU to 1.8 million TEU by 2022. A long-term project to build a second container terminal at South Kaien Island will add 2.5 million TEU of capacity around the mid-2020s. Shaun Stevenson, Prince Rupert's president and CEO, said there is no firm timeline for the South Kaien Island terminal, but when a decision is made to move forward and the necessary permits have been secured, construction will take about three years. Given those requirements, the port views it as a "mid- to late-2020s project," he said. Stevenson stressed that South Kaien Island is a good location for a container terminal. In fact, the port authority in the early 2000s considered it for the first container terminal but opted for the Fairview site. The three major container terminals in Vancouver — Deltaport and Vanterm (which are operated by GCT Canada) and Centerm (operat- ed by DP World) — also have short- term expansion projects planned or under way. Those projects will increase the terminals' capacity incrementally into the mid-2020s. The total expansion projects in Vancouver and Prince Rupert should Princely plans Port of Prince Rupert maps major expansion as dual Vancouver projects jockey By Bill Mongelluzzo The total expansion projects in Vancouver and Prince Rupert should provide Canada's Pacific Coast with enough capacity to handle organic growth from vessel upsizing,

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