International intermodal rail energizes port traffic. The growth of intermodal traffic in Canada is increasingly linked to North American economic and trade conditions. With relatively small local populations near Canada’s major ports, the depth of inland rail reach and service levels are vital to attracting the container shipping lines.
The reach of Canadian National’s (CN’s) international intermodal service extends to import and export container traffic at the ports of Vancouver, Prince Rupert, Montreal, Port of Saint John, Halifax, New Orleans and Mobile.
CN introduced a significant change in the handling of import containers from the South Shore terminals at the Port of Vancouver in early 2017. Under the 2004 CN/CP co-production agreement, CP handled their own and CN’s traffic to Centerm and Vanterm, via the CP main line on the south shore of Burrard Inlet.
In January 2017, CN resumed switching their traffic to the South Shore container terminals and rerouting via the Burrard Inlet Line and across the New Westminster Rail Bridge. In part, intermodal traffic has increased because CN has worked with GCT at Vanterm to handle some of the container traffic that might have otherwise been displaced by the rail expansion project at Deltaport. CP has also made investments to improve service to the South Shore terminals.
The Prince Rupert container expansion scheduled for completion in the summer of 2017 provides more incremental capacity that will benefit shippers. With the growing number of shipping line partners now doing business with CN there is a much bigger pool of international containers.
If an exporter is located where there is an intermodal terminal (i.e., Edmonton, Calgary, Prince George, Saskatoon and soon to be in Regina), empty containers are available. The Prince Rupert gateway presents new export opportunities at Tidal Coast Terminals and Coast Tsimshian Enterprises Lumber Transload facilities in Prince Rupert and via CN’s Prince George facility.
Container match back export opportunists will arise in Alberta and Manitoba, especially with specialty crops. CN is also working with a partner to open an intermodal ramp in Regina in 2018 which will be an attractive location for specialty crop export loading.
CP’s International intermodal business consists primarily of containerized traffic moving between the ports of Vancouver, Montreal and New York and inland points across Canada and the U.S. Import traffic from the Port of Vancouver is mainly long-haul business destined for eastern Canada and the U.S. Midwest and Northeast.
CP successfully opened a new “live” lift at Portal, North Dakota in May 2017. Portal is the border crossing for CP’s intermodal traffic moving between Western Canada and the U.S. Midwest. The new service allows CP to lift single containers off trains for inspection by Canadian and U.S. authorities as opposed to having entire intermodal cars set-off, which could delay three or more containers. This investment will virtually eliminate non-targeted containers from being delayed at the border crossing.
On August 14, 2017, CP launched a direct rail transportation service between Vancouver and Detroit, a service that extends CP’s reach and increases optionality and access to the primary markets for shippers. Leveraging CP’s newest transload facility in Vancouver and its innovative live-lift operation at Portal, North Dakota to accelerate cross-border shipments, this new service can cut transit times from the West Coast to Detroit by as much as 48 hours compared with our nearest competitors.
While international intermodal is energizing port traffic, a major issue for exporters is whether the availability of containers inland represents new short term supply chain opportunities, or represents a structural change in the marketplace.
The development of the Prince Rupert container terminal over the last decade as the spark for improved inland container availability. The expansion of DP World’s terminal in Rupert and rail infrastructure enhancements at Deltaport will only intensify the magnitude of the changes in container availability.
Over the next two years, shippers and port officials might see the fruits of CP’s renewed interest in international intermodal rail. However, CN’s track record and the desires of the container lines for service quality and price will also help shape how port traffic and trade lane growth is energized.
Read the BC Shipping News article that more fully explores several important topics with top Canadian National (CN) and Canadian Pacific (CP) officials.