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Welcome to North America’s Leading Edge
PRINCE RUPERT OPPORTUNITY
Trade & Transportation Seminar - WTCAKOctober 2011
AGENDA
Who We AreStrategic AdvantagesFacilities Overview Container Terminal Project & Growth PlansBuilding the Gateway – Ridley Island Development PlansAlaska’s Gateway to Opportunity
AGENDA
Who We AreStrategic AdvantagesFacilities Overview Container Terminal Project & Growth PlansBuilding the Gateway – Ridley Island Development PlansAlaska’s Gateway to Opportunity
WHO WE ARE Canadian Port Authorities
For profit, non shareholder, with mandate from federal government.
Our Mandate - Letters Patent• - Commercially viable • - Autonomous and governed by a Board of Directors • - Steward of Crown’s Assets:
Total Land Holdings 965.60 haOwned Harbour 14,000 haNavigable waters footprint >350 km of coastline
Our Value Add• - Facilitating and expanding the movement of cargo and passengers • - Overall planning, development, marketing and management of the commercial port • facilities.
Our VisionTo be a leading trade corridor ‘gateway’ between North American and Asian markets.
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AGENDA
Who We AreStrategic AdvantagesFacilities Overview Container Terminal Project & Growth PlansBuilding the Gateway – Ridley Island Development PlansAlaska’s Gateway to Opportunity
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STRATEGIC ADVANTAGES
• Closest North American Port to Asia
• Deepest natural harbor in North America
• Safe, sheltered & efficient access from international shipping lanes
• Exceptional community & labor support for expansion
• Superior/uncongested rail connection to North American heartland
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STRATEGIC ADVANTAGES • Closest North American Port to Asia
• Deepest natural harbor in North America
• Safe, sheltered & efficient access from international shipping lanes
• Superior/uncongested rail connection to North American heartland
• Exceptional community & labor support for expansion
Closest North American Port to Asia
STRATEGIC ADVANTAGES
North American Conic Equidistant Projection
North American Conic Equidistant Projection
Closest North American Port to Asia
STRATEGIC ADVANTAGESPort, Harbor & Community
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• Closest North American Port to Asia
• Deepest natural harbor in North America
• Safe, sheltered & efficient access from international shipping lanes
• Exceptional community & labor support for expansion
• Superior/uncongested rail connection to North American heartland
STRATEGIC ADVANTAGESExtensive Market Reach with Competitive Transit Times
• Closest North American Port to Asia
• Deepest natural harbor in North America
• Safe, sheltered & efficient access from international shipping lanes
• Superior/uncongested rail connection to North American heartland
• Exceptional community & labor support for expansion
RAIL SYSTEM EFFICIENCY AND PERFORMANCE • Best crossing of Rocky
Mountains from west coast - Rail grade under 1%,
• Trains run longer, faster (less urban congestion)
• Reliable - Fewer weather-related interruptions
• No congestion at port or on main line (<25% utilization)
• CN invested in capacity expansion and upgrades
• Acquisition of complimentary rail systems (EJ&E)
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11,000-foot CN Container Train along Skeena River
RAIL SYSTEM EFFICIENCY AND PERFORMANCE
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Figure 2: Route profile, Prince Rupert to Chicago
Figure 3: Route profile, Los Angeles to Chicago
Figure 4: Route profile, Seattle to Chicago
AGENDA
Who We AreStrategic AdvantagesFacilities Overview Container Terminal Project & Growth PlansBuilding the Gateway – Ridley Island Development PlansAlaska’s Gateway to Opportunity
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Ridley Terminals Inc.• Automated 100 acre terminal
• Unloads trains @ 6,000 tonnes/hr
• Loads ships @ 9,000 tonnes/hour
• 12 million tonne annual shipping capacity
• 1.2 million tonne storage capacity
• Handling coal, pet. coke & wood pellets
• modernization and expansion to 24 million tonnes is underway
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2,000,000
4,000,000
6,000,000
8,000,000
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
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Prince Rupert Grain Ltd. • Modern high-throughput facility
• 7 million tonne annual capacity
• 4,000 tonne/hr loading rate
• 202,000 tonne storage capacity
• Berth ships to 145,000 DWT
• Grain clean capabilities
Fairview Container Terminal – Phase 1• > 98% marine-to-rail intermodal • Design capacity: 500,000 TEUs• 360 meter container quay• 17.0 meter berth depth (low tide)• 3 Ultra Post Panamax Cranes• Container Yard capacity @ 4 high = 9,430 TEUs• Reefer stacks with 72 plugs• 7 working tracks (5,500m), 6 storage tracks
(6,100m)• 4 Radiation Scanning Portals; on-site VACCIS
screening
89 91 93 95 97 99
2001
2003
2005
2007
2009
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
TOTAL PORT-WIDE TRAFFIC (MT)
2010
16,531,000
AGENDA
Who We AreStrategic AdvantagesFacilities Overview Container Terminal Project & Growth PlansBuilding the Gateway – Ridley Island Development PlansAlaska’s Gateway to Opportunity
FAIRVIEW CONTAINER TERMINAL UNIQUE SERVICE APPROACHVELOCITY
Focus: on-dock intermodal
Simplicity of operation
FLUIDITY
Responsive, flexible and adaptable
Cooperation and collaboration of partners
TERMINAL OPERATIONS
MARINE / RAIL INTERFACE Load direct from vessel to unit
train
Build train on terminal
Scheduled rail service
Non stop service to destination
TERMINAL FLOW Minimal truck operation
Scheduled coordination of
trucking with terminal (pick up /
drop off)
Maher train crews
High terminal productivity
PERFORMANCE TO DATE
• Currently three vessel calls per week
• 2008 - 181,000 TEUs handled• 2009 -- 263,000 TEUs, up 45%• 2010 – 343,366 TEUs, up 29.5%• 2011 – 228,793 AugYTD• Short dwell time at the port• Rail leg average to Chicago: 100
hrs• 100% of containers scanned on
system – VACIS and radiation
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2007 2008 2009 2010 2011 2012
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100,000
200,000
300,000
400,000
500,000
Container traffic through the Fairview Terminal has grown 132% since it’s opening in 2007. It is expected to reach 500,000 TEUs in 2012 or 100% of the Terminal’s design capacity and 71% of it’s operating capacity.
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FAIRVIEW TERMINAL IS SEEING GROWTH IN AN ENVIRONMENT OF DECLINE. GROWTH DURING ECONOMIC RECESSION
Vanco
uver
Seatt
le
Taco
ma
Los A
ngeles
Long B
each
Portlan
d
Oaklan
d
Sava
nnah
Prince R
upert
-100%
-50%
0%
50%
100%
150%
200%
250%
% Change in TEU Volume YoY by Quarter
Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
THE PRINCE RUPERT GATEWAYPrince Rupert’s Value Proposition Proof of the Proposition
Speed • 1.5 - 3 days closer to Asia (sailing)• Short terminal / port dwell time• 4 – 8 days savings in total transit time
Reliability • Minimal congestion at port or within rail system • Little to no variability in service• Consistent and reliable transit times into Chicago and Memphis, as well as central Canada
Cost • Service is price competitive• Lower total logistics cost for shipper• Reliability improves supply chain predictability
Flexibility • Logistics – import: transload, re-route, hold back, modify inventory; export: containerize cargo at a natural “eddy”, at the port
DEFINING OUR COMPETITIVENESSdon’t replicate… invovate
• Quantifying our carbon footprint study – SNC Lavalin
• Understand shipper’s needs (Supply Chain focus) – WCL and QCL studies
• Measuring and monitoring performance – KPIs
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Source: SNC Lavalin “Methodology for Estimating and Comparing Carbon Efficiencies of Marine Gateways” 2010
CONTAINER IMPORT LOGISTICS Proof of Concept - Potential Projects
• Supply Chain Issue / Market Opportunity -- Identify and test PR Value Proposition of speed, reliability, cost and identify and quantify the need for “flexibility” of Supply Chain at Port of PR.
• Scope of Proof of Concept – WCL :– Senior Management of 45 of the top
100 Beneficial Cargo owners including 4 of top 10 US importers (Walmart, Target, Sears, Costco, Nike, Toys R Us, Nissan, Dollar Tree) and 13 top 3PLs (including CEVA, UPS, Kuehue & Nagel, OEC, NYK Logistics)
– quantified need of transload, inland ports, visibility, deconsolidation, value added logistics, warehousing, fulfillment centre FTZ.
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BCO’s Likelihood to Increase PPR Imports if Flexibility Options* Were Provided
0%
20%
40%
60%
80%
100%
Highly likely to increase
Likely to increase
No change Don't know
18%33% 28% 21%
* “e.g., transloading, value-added services, team truck expediting, etc.”
51% are likely to increase imports through PPR Corridor if certain new improvements* are made.
Prince Rupert Opportunity -- “51% of BCOs stated that they would “likely” or “highly likely” increase imports through the PoPR if more flexible options were provided”.Conclusion: PoPR’s value proposition “timing, reliability, TL cost” all rate as extremely important supply chain strategy drivers, a new value proposition of “flexibility” rates as very important.
CONTAINER EXPORT LOGISTICS Proof of Concept - Potential Projects
Supply Chain Issue / Market Opportunity • only one option for Canadian exports; and, • majority of containerized cargo is stuffed at the port (96% of
lumber, 87% of wood pulp and 73% of specialty crops). Scope of Proof of Concept • QCI Consulting identified:
– Factors affecting export decisions regarding supply chain configuration; – Factors influencing shipping lines’ equipment allocation;– Steps to competitively position the PoPR in the development of
containerized export traffic.
Prince Rupert Opportunity • “companies recognized that the constraints in growth for
Vancouver container port facilities are primareily in the difficulty of coordinating off dock activities in the Lower Mainland. It is congestion in off-dock activities that is seen as limiting Vancouver’s growth…”
Conclusions• “wood pulp and specialty crop shippers identified the
limited capacity available to support container stuffing at the port…issues with lack of competition…were listed by both forest product companies and specialty crop shippers.”
• “Shippers believe that Prince Rupert’s major strength was the lack of congestion at the port and good rail service.”
Prince Rupert Constraining FactorsMagnitude of importance
Lack of access to markets 6
Insufficient capacity for container stuffing / storage at port 4
Lack of competition in existing markets 3
No support for refrigerated services 2
Problems to access traffic from CP origins 2
Lack of container supply 2
Container Business Competitiveness do not replicate… innovate
2011• Customer Satisfaction Assessment• Port of Entry Benchmarking• Supply Chain Model Development• Logistics Planning & Engineering• Transload Operations Model• ’53 Container Flow Study• Supply Chain Leaders Strategy• FTZ• Boarder thinning (US Customs Agents in PR)
Fairview Terminal - Phase II ExpansionTerminal Capital Cost: $650MRail infrastructure Cost: $300MTotal Cost: $950M
Incremental Capacity: 1.5 M TEU’s/yr
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Phase I
Phase II b
Fairview Container TerminalPhase II
Phase II a
AGENDA
Who We AreStrategic AdvantagesFacilities Overview Container Terminal Project & Growth PlansBuilding the Gateway – Ridley Island Development PlansAlaska’s Gateway to Opportunity
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Ridley Island Development Plan
GATEWAY 2020 DEVELOPMENT VISIONDefining the development opportunities• Guiding principal – Planning in
Common• Existing Terminal tenants• Responding to shippers needs• Creating regional opportunity
• Key strategic themes• Building upon existing underutilized
terminal infrastructure• Maximizing development utility of
limited property• Integrated development clusters• Innovation• Mitigation of potential future activity
conflicts • Create platform for value-added
activities to maximize the economic opportunity for the community and region 35
ROAD, RAIL AND UTILITY CORRIDOR
Common User
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Rail Corridor
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Utility Corridor
39Land bank for growth and diversification of cargo at existing terminals
40Bulk Terminal Cluster
41Bulk Terminal Cluster
Canpotex Development Site
43General Cargoes Cluster
44Logistics Cluster
45Logistics Cluster – Watson Island Integration
46Logistics Cluster – Integration with Fairview Terminal
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AGENDA
Who We AreStrategic AdvantagesFacilities Overview Container Terminal Project & Growth PlansBuilding the Gateway – Ridley Island Development PlansAlaska’s Gateway to Opportunity
CURRENT CONNECTIONS TO ALASKACN Aquatrain
ALASKA OPPORTUNITIESContainerized cargo
EXPORTS• Reefer traffic to Asia
○ Key seafood market s like Japan ○ Secondary processing
• Reefer traffic to domestic markets in the US heartland• Forest Products in Asia• Mineral concentrates
IMPORTS• Access to Chicago distribution centers• Provisioning