General Discussion

I've read that the port's major competitive advantage is that it is closer to Asia than any other major North American port, thereby shortening time at sea and overall transit time from China to major North American markets.

But is this really much of an advantage? Look at the east coast... we have two major ports...Halifax and Montreal. Halifax is certainly closer to Europe than Montreal...so one could reasonably conclude (based on the proximities argument) that Halifax would be the predominant port of choice for most goods coming to North America from Europe..yet Montreal and the ports along the US Eastern Seaboard are certainly favored over Halifax.  For some reason it still makes as much or more sense to send a ship up the St. Lawrence to Montreal verses off loading in Halifax for furtherance by rail to inland markets.

When the Strait is open and clear of ice, Churchill, Manitoba is actually the closest Canadian port to Europe.

A port is only one small link in a physical distribution system. Lets say Wal Mart cuts a deal to buy 10,000 TV sets from Happy Hunan Manufacturing in Wuhan.  Someone needs to get those 10,000 sets into the hands of customers all over North America.  In the case of Wal Mart they will design a system that puts these sets in the hands of their customers for the lowest possible cost per set.  Many factors come into play.  Just one of these factors is the fact that there are millions of customers within an eight hour truck drive from Los Angeles or Hampton Roads.  There are very few Wal Mart customers within eight hours of Prince Rupert.

Ulrich wrote:

I've read that the port's major competitive advantage is that it is closer to Asia than any other major North American port, thereby shortening time at sea and overall transit time from China to major North American markets. But is this really much of an advantage? Look at the east coast... we have two major ports...Halifax and Montreal. Halifax is certainly closer to Europe than Montreal...so one could reasonably conclude (based on the proximities argument) that Halifax would be the predominant port of choice for most goods coming to North America from Europe..yet Montreal and the ports along the US Eastern Seaboard are certainly favored over Halifax.  For some reason it still makes as much or more sense to send a ship up the St. Lawrence to Montreal verses off loading in Halifax for furtherance by rail to inland markets.

Distance is almost the only competitive advantage along with Prince Rupert being a non-PMA port, but the value is obtained principally through lower shipping rates than through lower inventory carrying costs.  The market is virtually 100% Chicago and environs.  When there is sufficient volume at an originating port to load a ship 100% with Chicago-bound containers, and not incur excessive costs waiting for that volume to aggregate at the origin port, then Prince Rupert is attractive.

RWM

     What is a non-PMA port,and why is it relevent?

PMA = Pacific Maritime Association. Bargaining group for major Pacific Coast Stevedore companies. It's counterpart is the ILWU, the International Longshoreman & Warehouse Union.

I wonder how desireable Prince Rupert and other non-California Ports will look once (if it hasn't happened yet) California has an extra $20 surcharge (tax) on per container that uses California Ports.

IIRC, the CN trains that come from PR are 80% destined for chicago/Memphis markets. The COSCO line that is.

Paul

Soo 6604 wrote:

I wonder how desireable Prince Rupert and other non-California Ports will look once (if it hasn't happened yet) California has an extra $20 surcharge (tax) on per container that uses California Ports. IIRC, the CN trains that come from PR are 80% destined for chicago/Memphis markets. The COSCO line that is. Paul

California has looked at the effect of the surcharge carefully, it won't cause a noticeable diversion of containers.

I believe one the reasons Montreal is used over Halifax is that most of the ships serving Montreal were owned by CP and their business goes to CP. CP Ships has been sold but I think the relationship continues at Montreal. CP does not serve St. John anymore.