(The following report by Scott Deveau appeared on the Financial Post website on September 12.)
OTTAWA — The new container terminal at the port in Prince Rupert, B.C., which has its official opening today, is expected to bring an additional $300-million in revenue to Canadian National Railway Co., which has exclusive rail access to the site. James Foote, CN’s vice-president of sales and marketing, discussed the railway’s plans for the new corridor, which has been nicknamed the Midwest Express after its ambitions to move manufactured goods imported from Asia to distribution centres in Chicago and Memphis more quickly than any other West Coast port. He talked to the Financial Post’s Scott Deveau.
Q. How do you expect the new terminal to help grow your business?
A. It clearly positions our international, intermodal business to have significant growth over the next few years as the terminal opens up and ramps up to full capacity, which we have said is 500,000 [twenty-foot equivalent units] by the end of the year. That’s quite a big ramp-up for us. In addition to that, it also creates a lot of opportunity for us to develop new lines of business to take advantage of the empty capacity that will be going back towards Asia.
Q. How have the shippers responded to the new facility?
A. Very favourably. Not only is this an opportunity for us to move product, but more importantly, it’s an opportunity for North American exporters to look to Asia for new markets. We’ve already built some specialty grain facilities in Edmonton. We’re looking at building some facilities to fill empty containers with the derivative products from ethanol production. We’re building a new facility in Prince George to be able to fill containers going back with forest products. So it really creates a lot of excitement and a lot of opportunity that until now didn’t exist.
Q. Are there specific products that will be shipped back to Asia along this line?
A. Canola and barley, those products grow here in Canada, and they’re looking to move that more into the Chinese market. These DDGs [dried distiller grains], which is animal feed and comes out as a byproduct of distilling grains from ethanol, that’s a brand-new business that has tremendous opportunity and a lot of volume that needs to have more capacity. And the forest products business. Obviously the lumber producers and other forest-product producers in Western Canada are having some difficult times in their traditional markets right now and are looking to this for its potential.
Q. That track up to Prince Rupert right now is extremely underutlitized– I’ve heard figures of about 10% of capacity. Will it be ready for this traffic?
A. I don’t know if it would be that low. … It’s clearly underutilized. But it’s world class railroad going up there that was built to export Canadian coal and grain and is, based on its current configuration, operating at nowhere near capacity and so we can easily accommodate this growth in container traffic while continuing to move more coal and more grain without adding any extra capacity to accommodate it.
Q. You ran into some operational issues last winter due to landslides and heavy snowfall. Are you worried about this new line in Northern B.C.?
A. No, there is nothing unusual or different about that line up there than the one going into Vancouver. In fact, I would say because of the lack of traffic, it’s easier to operate up there.
Q. When do you expect the first containers to be shipped from the port?
A. Late October.