Port-logistics in Prince Rupert and Northern BC: lessons and questions for development in

remote urban regions

Peter Hall, Simon Fraser Universitypvhall@sfu.ca

Vancouver ports’ 20 year container growth (ends?)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Vancouver Total TEU Vancouver share Linear (Vancouver share)

0

10000

20000

30000

40000

50000

60000

1991 1996 2001s Adj2006s

Employment in PLS for All cities; 1991-2006

Montreal

Toronto

Vancouver

LowerMainLand

Calgary

Edmonton

Halifax

PrinceRupert

PrinceGeorge

Victoria

Windsor

Winnipeg

Vancouver and Prince Rupert ports’ container growth

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Vancouver Total TEU Prince Rupert TEU Vancouver sharePrince Rupert Share Linear (Vancouver share)

BC Port Cargo Statistics, 1990-2010 - Overall growth, especially in unloaded/imports

Short tons 1990 2010 1990-2010 Growth

Vancouver Loaded 62,073,100 86,348,900 39%

Unloaded 8,411,500 18,394,300 119%

Total 70,484,600 104,743,200 49%

Prince Rupert

Loaded 12,097,800 13,433,100 11%

Unloaded 387,200 1,561,100 303%

Total 12,485,000 14,994,200 20%

BC Loaded 96,864,038 114,163,184 18%

Unloaded 25,175,112 29,257,084 16%

Total 122,039,150 143,420,268 18%

Source: Shipping in Canada (Statistics Canada)

Port-logistics in Prince Rupert and Northern BC: lessons and questions for development in remote urban regions

• What economic and other benefits do port-logistics developments bring to remote urban regions?

• Since opening in 2007, the Fairview terminal has grown to handle over three-quarters of million TEU per year, alongside diversification in cargos, carriers and routes, and expansion in direct port employment.

• Yet between 2006 and 2016, the population of the Prince Rupert census agglomeration declined by about 5%, not reversing a decades-long trend.

• The discrepancies between these qualitative and quantitative outcomes raise questions about how we should think about the economic benefits and other impacts of port-logistic developments in remote urban regions.

Port-logistics in Prince Rupert and Northern BC: lessons and questions for development in remote

urban regions

• Context

• Cargo profile

• Governance and key actors

• Regional connections

• Employment change and population decline

Competitive Advantage of BC Ports vs Other West Coast PortsSource: BC Ministry of Transportation

Figure 3.Locations of terminal sites around Prince Rupert. (Google Maps, 2014)

Source: Byrne 2015

Prince Rupert 2016 container profile:59% inbound (Vancouver: 53%)

Import Export Total

Total TEU 437,332.8 299,330.3 736,663.0

Loaded TEU 437,124.0 166,291.0 603,415.0

20' 48,700.0 3,291.0 51,991.0

40' 188,849.0 81,195.0 270,044.0

45' 4,767.0 271.0 5,038.0

Empty TEU 209.0 133,040.0 133,249.0

20' 9.0 20,922.0 20,931.0

40' 100.0 51,705.0 51,805.0

45' - 3,870.0 3,870.0

Percent empty 0.0% 44.4% 18.1%

Prince Rupert Port Authority Cargo Profile (tonnes)

YearFairview

(containers) Grain (PRG) Coal (Ridley) Other (logs)Westview

(wood pellet) Total

2002 126,731 2,290,860 1,816,827 240,156 4,474,574

2003 107,712 1,228,982 2,697,195 261,380 4,295,269

2004 155,850 3,128,533 912,889 217,239 4,414,511

2005 101,861 3,113,950 1,015,032 243,596 4,474,439

2006 16,712 4,739,447 2,815,008 167,085 7,738,252

2007 182,796 5,098,402 5,085,771 214,279 10,581,248

2008 1,826,011 3,759,517 4,847,031 155,289 10,587,848

2009 2,661,896 5,080,834 4,159,678 271,263 12,173,671

2010 3,441,018 4,294,104 8,299,868 389,522 16,424,512

2011 4,113,433 5,042,165 9,638,520 545,118 19,339,236

2012 5,657,448 4,731,470 11,530,777 370,285 22,289,980

2013 5,374,767 5,136,603 12,072,211 479,718 1,107 23,063,299

2014 6,190,248 6,456,309 7,111,682 352,966 511,742 20,622,947

2015 7,764,103 6,255,094 4,432,298 437,234 734,598 19,632,465

2016 7,366,630 6,141,723 3,992,307 454,846 896,257 18,862,593

Prince Rupert Port Authority:• Well, I guess it’s all about not putting all of your eggs in

one basket and diversifying the cargos that move through our port. So instead of-- ‘cause when LNG was-- everyone was talking about LNG and all the projects were going, there was lots of interest in port lands. But they were not all given out to LNG for that very reason. That we didn’t want all of this, you know, all of our available land to be developed for the same purpose. So having little pieces-- because knowing the markets fluctuate, coal, lumber, containers, doing as much market feasibility and planning as you can. But knowing that at the end of the day if you have little pieces of the pie in different classes, cargo classes, then you’re going to be successful. So it’s all about diversifying the port. And that’s the message we try to get out there.

Prince Rupert Port Governance plus

Governance Events Comments

1945-1960s

Government (CN Rail) owns most foreshore, some by City

Lost coal export terminal to Vancouver

Private and city lobbying for NHB inclusion

1970s

National Harbours Board (1972), continued CNR control

Ridley Island planning; lost petrochemical facility

Hinterland interests (Alberta, northern BC)

1980-1990sPort Corporation (1983)CN corporatized Ridley Island opens 1984 Stagnation…

2000s Port Authority (1999)Fairview Container Terminal (2007)

PA, CN, government-initiated development; attract Maher, Cosco

2010s Port Authority

Westview open 2013DPW acquire Fairview 2015Phase 2 North (2017), 750,000 to 1.35m TEU

Ridley Island Expansion (Propane but no LNG; Raymont & CT transload)

Kristoff trucking, Kuehne & Nagel• K&N, they had logistics and freight forwarding contract

for Rio Tinto Alcan in probably 2011. And they contacted us and-- met them and we basically gave them rates and, you know, took a while, took a year or two, to get off the ground. But they liked what we did, liked what we could do and, you know, we hit it off well, you know, early on. And did a little bit of work for them and just as the project grew there and got--coming online they just sent everything-- everything they could have or-- everything they had they sent it our way…. we’re not partnered or anything like that. This is one of the few places where they’ve got their sign in the world on someone else’s property, to tell you the truth. Yeah, it was a big deal. It was quite a big deal to put that sign up there.

Prince Rupert Port Authority: First Nations• Tidal Terminals and Coast Tsimshian Enterprises has

partnered to make C.T. Terminals which is a lumber stuffing facility out on Ridley Island. So that’s a joint venture project where they’re partners in that operation and operating that terminal. Yeah, in the construction of the road rail utility corridor, that was a joint venture to CIC Construction, a local First Nations company as well as-- I believe they’re involved in the maintenance building that’s out on the way to the B.C. Ferries terminal. Have you seen it?

• So certainly above and beyond consulting and keeping them aware-- keeping all of the First Nations communities aware. We try to partner with them for projects whenever possible. They have an agreement that they would be given, for major projects, first-- a job benefits agreement there. As long as their quotes come in competitively and that they’re actually able to-- not actually able, but that they have the resources.

Source: Googlemaps (2014)

Source: Ministry of Transportation and Infrastructure (BC), http://www.th.gov.bc.ca/popular-topics/maps/bcmaps.htm

Tidal TerminalsA: So this is our lumber side of the yard. We’ve got a variety of mills and clients shipping through us here. The furthest mills we routinely see deliveries from would probably be Houston area. However, that being said, we’ve seen deliveries as far from Mackenzie or Prince George.Q: And that’s all coming in by truck?A: All truck, yeah. So I mean, you’d probably think those loads would go south if they were going to export on rail. But some of the clients just need to fill the order, so we’ll occasionally see a top-up load arriving here from those far destinations. Q: And then the core business is from Smithers?A: Smithers area, so West Fraser operates in Smithers. Canfor has got mills all along the way, all the way back to, like I say, Mackenzie. Skeena Sawmills in Terrace is a big long-term client of ours. And then there’s a few smaller mills. So-- oh, you know, I forgot to mention Hampton, Hampton Affiliates, American.

Better picture of log transload

Pinnacle Renewable Energy - Pellet

Facility Strathnaver

Pinnacle Renewable Energy – Westview

Terminal Prince Rupert

Prince Rupert customs broker: wood pellets

• …for instance, when the Westview Terminal, this is on the shipping side still, Peter. But when Westview Terminal, the pellet ship-- the wood pellet ship that started-- actually starting to build the terminal. We established a relationship with the shipper, with the fellow that manufactured the wood pellets. And so that we could have our name in for whoever or however they’re going to make up their shipping arrangements. Then that may be with the owner or the charter of the vessel that we would ask that we would be their general agent when they came in. So our relationship with the terminals locally is also very important.

Prince Rupert customs broker: containers

• …the present agent who handles all the container ships was put in place primarily through a relationship formed, like, a long time ago. And that whole kind of mentality if it’s not broke, don’t try and fix it, has kind of worked for them. So nobody’s really-- has to go outside of choosing a different agent. And there’s only certain lines that do call into Prince Rupert at this time. And because if they’re in an alliance and those alliances they decide to just use one agent out of just continuity and simplicity. So, you know, when other lines do decide to come into Prince George we do expect to be looking after those customers. Like, Evergreen or anything like that. But the way the present situation is, it’s set up, is in the alliance that they’re quite happy with just using the same agent.

The location of maritime advanced producer services

Note: Vancouver is 6th in total count, 8th in relative connectivity, and is higher in routine

than command activities

RANK CITY TOTAL EST

1 New York 160

2 Houston 97

3 New Orleans 61

4 Washington D.C. 61

5 Miami 56

6 Vancouver 42

7 Mexico City 40

8 Seattle 39

9 Los Angeles 35

10 San Francisco 34

11 Montreal 30

12 Toronto 27

13 Hamilton 26

14 Fort Lauderdale 24

15 Jacksonville 24

Transportation & Warehousing employment relative to All Industries – BC Regions (1995-2011)

All industries, thousands employed

Transportation & Warehousing, thousands

employed

Growth of Transportation & Warehousing relative to

All Industries in region and relative to BC1995 2011 Growth 1995 2011 Growth

British Columbia 1,785,600 2,274,700 27.39% 97,100 124,100 27.81% 0.00%Vancouver Island

and Coast 306,400 367,100 19.81% 11,800 14,900 26.27% 6.05%Lower Mainland-

Southwest 1,054,800 1,419,100 34.54% 62,500 82,200 31.52% -3.43%Thompson-

Okanagan 194,000 254,700 31.29% 8,900 10,500 17.98% -13.73%

Kootenay 69,600 72,100 3.59% 2,700 3,300 22.22% 18.22%

Cariboo 79,400 81,200 2.27% 5,700 6,500 14.04% 11.35%North Coast and

Nechako 49,000 43,300 -11.63% 3,700 3,700 0.00% 11.22%

Northeast 32,500 37,200 14.46% 1,800 3,100 72.22% 57.35%

Average earnings ratios (PLS/All industries); CMAs; 1991-20061991 1996 2001s Adj2006s

Rest of Canada 1.25 1.21 1.18 1.13

AbbotsfordChilliwack 1.28 1.33 1.19 1.12

Calgary 1.09 1.10 1.14 1.06

Edmonton 1.22 1.22 1.18 1.11

Halifax 1.21 1.17 1.19 1.19

Montreal 1.21 1.20 1.13 1.15

PrinceRupert 1.41 1.39 1.49 1.77

PrinceGeorge 1.38 1.42 1.28 1.18

StCatharinesNiagara 1.28 1.37 1.24 1.19

Toronto 1.09 1.05 1.00 0.96

Vancouver 1.30 1.28 1.24 1.23

Victoria 1.17 1.14 1.19 1.13

Windsor 1.17 1.12 1.07 1.00

Winnipeg 1.32 1.32 1.27 1.31

Total 1.21 1.18 1.14 1.10

The bottom line• Prince Rupert (Skeena-QC Regional District, 2001-11):

+ 22.6% in transport & warehousing- 21.1% overall employment

• Lots of port activity growth…≠ Lots of employment growthLots of change in employment mix and locations

• Regional trajectories of economic development :• long-established patterns (resource extraction cycles)• mediated by existing and emergent institutions (PRPA, FN)• lacking advantages of scale and independent global connections• secure the local benefits through less formal and historically

contingent arrangements