(The following report appeared on the Business Edge website on June 24.)
CALGARY, B.C. — Canadian National Railway Co. is expecting a big boost in its container traffic when the Port of Prince Rupert, B.C., completes its first container terminal sometime next year.
Chief executive Hunter Harrison told analysts late last week that a planned container terminal at the Pacific port will give CN a competitive advantage over other railways and Prince Rupert an edge over other West Coast ports serving Asian markets.
A spokesman for the Prince Rupert Port Authority said the port is expected to announce within 60 days a partner to build a container terminal, able to handle large container ships carrying consumer goods from China and other countries.
Port authority spokesman Shaun Stevenson said the B.C. provincial government has also committed $17 million to the terminal project.
Harrison said CN’s investment at Prince Rupert is partly dependent on getting federal approval for its $1- billion takeover of B.C. Rail, announced last November but still under review by the Competition Bureau.
If the controversial B.C. Rail deal goes through, CN is already committed to spend $15 million to modify its line between Prince Rupert and its mainline track west of Edmonton, to make it possible to carry two stacked containers on each railcar, as the mainline network already can.
“There’s a huge opportunity in Prince Rupert,” Harrison said in a presentation to analysts.
Prince Rupert says it is the deepest natural harbour in North America, and is located 30 hours’ sailing time closer to Asia than other West Coast ports CN, with the only rail link, says it could shuttle the containers to the continental hub at Chicago 1.5 days faster than from any other port.
Intermodal traffic, the shipping of standard-sized steel containers that also go on ships and trucks, accounts for 19 per cent of CN revenues.
Harrison said that while the intermodal business is growing, it has to improve margins to achieve the profits of its other divisions. “Intermodal has grown in the double digits, but it has clearly not had the return to invest in the franchise.”
He said the company intends to increase its freight rates by about two to three per cent a year, given that its service has improved with faster and more reliable trains.