By Clifford F. Lynch
For the past year, the name Prince Rupert has become increasingly familiar to
the Memphis logistics community. But still, to many it doesn’t mean much
unless you happen to be a student of 17th Century Canadian history.
If so, you no doubt will be at least remotely acquainted with Prince Rupert of
the Rhine – soldier, Caribbean buccaneer, artist and the first governor of the
Hudson’s Bay Company.
If you are a frequenter of UFO websites, you may have come across a report on
the HBCC Research site of a couple residing in Prince Rupert, who are regularly
visited by a UFO every time they explore the UFO subject online.
But if you are neither a Canadian historian nor a UFO wonk, you might
legitimately ask what, where, or who is Prince Rupert and what does it mean to
900 miles north of Vancouver and more than 3,000 miles from Memphis lies the
north coast of British Columbia, a land where whales, eagles, and bears
outnumber the people. It is here, just outside the town of Prince Rupert City
(pop. 12,815) that the northernmost railhead in North America aligns with the
deepest harbor on the continent. And it is here that a new, state-of-the-art
container terminal is under construction, with the initial phase scheduled for
completion in October 2007. Served by the Canadian National Railroad, this
terminal will provide a direct route for containers shipping from Asia to
Typically, containers of products from Asia destined for Memphis will move
through the ports of Los Angeles and Long Beach where they are transferred to
either the BNSF or Union Pacific railroads for the final rail leg of their
journey. Once they arrive in this area, they are unloaded at either the Union
Pacific intermodal yard in Marion, Ark., or the BNSF yard in Memphis. The
capacity here for both railroads is adequate for the time being. The capacity at
Marion is 375,000 containers annually; and with the new BNSF facility expansion
currently under way, this railroad will be able to handle 650,000, scalable to
But the destinations of eastbound containers are not where the U.S. problems
lie. West Coast ports have become increasingly congested, making it difficult to
unload and move containers promptly. While ports at Oakland, Calif., Seattle and
Tacoma, Wash., have been able to pick up some of the slack, the most popular
port destinations in southern California have experienced continuing problems.
East Coast ports have expanded, or are in the process of expanding, their
facilities; and some firms have located distribution centers close to these
ports. UTi, for example, operates an enormous 4 million square foot facility in
Bayport/Houston, Texas, for Wal-Mart. Products destined for many Wal-Mart stores
move from Asia through the Panama Canal to Bayport, bypassing the West Coast
One would think that the increasing use of alternate ports would solve the
problem, particularly in a slowing economy, and indeed it might except for one
thing. The new container ships under construction, and even some currently in
use, are too large for the Panama Canal. This has spawned another relatively new
term for the logistics industry – "Panamax." A Panamax ship is the
maximum size that can be moved through the canal.
The largest ship currently in operation is the Xin Los Angeles. If
this ship sails to the U.S., it must call at a West Coast port, or move through
the Suez Canal to an eastern port. Although the country of Panama has approved a
$5.5 billion expansion of the canal, this construction will not be completed
The Kansas City Southern Railway is moving containers from the Mexican port
of Lazaro Cardenas, over its Mexican rail subsidiary, but this route is somewhat
tortuous, particularly for products destined for cities not on the direct route
such as Memphis.
This brings us back to the most promising option Memphis has seen in recent
years – Price Rupert. The first phase of this facility, opening within a few
months, will be much less congested and will have an initial capacity of about
500,000 TEU’s (250,000 40- foot containers); and by 2010 will be able to
handle about 1,000,000 containers. While the expanded capacity will still be
less than that of Los Angeles or Long Beach, it will be an attractive option for
In spite of its far north location, the port is ice-free. Its configuration
will allow containers to be transferred directly from the ships to Canadian
National flatcars and from there to Memphis with no further interchange.
Prince Rupert is almost 1,200 nautical miles closer to Shanghai than Los
Angeles/Long Beach, and the sailing time will be about 60 hours less. Combined
with the efficiencies at the new port and the direct service by the Canadian
National, Memphis consignees will be able to receive their products at least two
days earlier than from Long Beach and, in time, possibly sooner.
While cost comparisons will not be available until the new movements actually
start, preliminary indications are that a movement from Shanghai through Prince
Rupert to Memphis will cost less than a similar movement through the other West
In May of this year, the CN and the China Ocean Shipping Company reached an
agreement whereby COSCO will begin calling on the new port on a weekly basis
during the fourth quarter of 2007.
Containers destined for Memphis will move into the new CN yard in the Frank
C. Pidgeon Park where a further $100 million expansion is scheduled for
completion by late next year.
For more than 24 years Memphis has been known as "America’s
Distribution Center," but with the assets we already have, plus the new
Prince Rupert route, we are on the verge of becoming a truly global logistics