Grainswest - Fall 2022

Fall 2022 Grains West 34 FEATURE expansion that increased its capacity from 1.35 million 20-foot container equivalent units (TEU) to 1.6 million TEU. A second expansion, scheduled for completion within the next several years will bring total capacity to between 1.8 and 2 million TEU. Because the Port is not constricted by existing urban development, potential also exists to construct entirely new terminals. While there is no need for a second grain terminal now, Fletcher said there is room to expand the existing facility when the tenants see value in the investment. A second container facility is a top priority, however, and a feasibility assessment is currently underway. Friesen believes Prince Rupert is the single best location for a new container terminal anywhere on the West Coast of North America. Contributing factors include existing road and rail infrastructure adjacent to the site and good coastal geography with deep water. And though the Port is conveniently close to its namesake city, its largely rural setting offers relatively low projected construction costs. Plans for a 70-acre transloading logistics site are also in the works. Construction of the massive, multimillion- dollar facility is set to begin construction in coming months and should be operational by 2026. Dubbed the Ridley Island Export Logistics project, it will be able to handle entire trainloads and load bulk cargo into containers prior to shipping. Of the 400,000 TEUs the facility should fill annually, approximately 150,000 will be grain. “A significant component [of the new facility’s capacity] will be a grain transload facility purpose-built and on a scale that doesn’t exist today. It will be a game changer for agricultural exporters to be able to send full unit trains of grain exports to this facility to have them containerized and then find market access,” said Friesen. The Port holds an aggressive and future-focused growth strategy for its entire portfolio, which has ambitions to reach annual capacity of 50 million tonnes by 2032, if not sooner. “Beyond that, through the 2030s and the 2040s, we see that growth continuing in a major way,” said Friesen. “Port projects take a long time. We’re really, really focused on long-term planning. The next decade [will] set up the two or three after that. We’re looking well out into the future to ensure Canada’s trade needs are met.” To this end, plans are in the works, and in several instances, construction is underway to build capacity through expansion or, as mentioned, the creation of new terminals, and to enhance road and rail infrastructure to service these terminals. “We’re looking at $2.5 billion worth of projects either in the ground today or close to final decisions,” said Friesen. “We’re laser focused on the opportunity we have to attract private sector investments into new terminal infrastructure.” Both the federal and provincial governments have stepped up to ensure adequate infrastructure is in place at the Port for growth to proceed. Ottawa has committed $153.7 million through the National Trade Corridors Fund to support a rail bridge expansion and enhanced logistics facilities at the Port. “There’s certainly a recognition at Transport Canada and the federal government about the importance of the Port of Prince Rupert and pursuing Canada’s agenda with respect to trade, market access and supply chain resiliency to ensure Canada has two large scale, viable port options on the West Coast,” said Friesen. “Prince Rupert is where much of that growth in Canadian export capacity is going to happen.” While Friesen said these growth plans are exciting, uncertainty surrounding regulatory approvals remains a key impediment to expeditious growth of capacity. “We’ll need to go through an entire project development lifecycle, including environmental reviews, but hopefully we can get that terminal up and running by about 2030,” he said. RAIL ACCESS The Port of Prince Rupert is serviced exclusively by CN Rail. The rail line across the Rockies to tidewater has much gentler grades than southern rail routes to Vancouver and Seattle. This allows the Port to be serviced by longer trains that burn relatively less fuel. To encourage shippers to decrease pressure on the Port of Vancouver, CN incentivizes certain contracts for Prince Rupert with lower rates. Friesen commended CN for keeping cargo rolling on a regular basis. He also cheered the railway’s continued capital investment in its northern mainline, including additional rail sidings that will support ongoing growth and efficiency of Port operations. “We live and die by rail up here. And to that end, we’ve got a great partner in CN,” he said. Not everyone is as confident in CN’s ability to keep up with the Port’s shipping needs. Mark Hemmes is president of Quorum Corporation, which is tasked by Transport Canada and Agriculture and Agri-Food Canada to monitor and report on western Canadian grain handling and transportation. Hemmes said while expansion is exciting for the Port of Prince Rupert and positive for Canadian exports in general, rail capacity has become a limiting factor. A decade ago, grain was the major product that flowed through the Port. Today, grain cars compete for loading and unloading space with many non- agricultural goods. “Because of all that expansion, because of that increase in the amount of traffic going through there, the whole rail capacity issue has become more of a concern for the industry as a whole, and not just the grain industry,” he said. “I think a lot of people are concerned, including CN. They’re the only game in town, so they really are working hard at increasing the capacity and the flow.”