Canadian Shipper


CN welcomes news of Maher Terminals expansion project at Prince Rupert; outlines capacity strategies

PRINCE RUPERT, B.C.– CN has welcomed news that Maher Terminals Holding Corp. will expand the capacity of the Port of Prince Rupert’s Fairview Container Terminal to more than 1.3 million twenty-foot equivalent units (TEUs) annually, from the current annual container-handling capacity of approximately 850,000 TEUs.

“This investment in terminal expansion to accommodate future growth in overseas container traffic is good news for CN’s customers and the Pacific Gateway we serve,” said CN CEO Claude Mongeau.

Maher Terminals Holding Corp., the operator of the Port of Prince Rupert’s Fairview Container Terminal, announced its decision earlier this week to proceed with expansion of the 7-year-old facility, increasing its container capacity by 500,000 TEUs to accommodate growing container volumes and further enhancing the Canadian gateway’s growing role in North American trans-Pacific trade.

“Intermodal customers have been capitalizing on the advantages of Prince Rupert as part of their transpacific trade solution since Fairview’s first phase opened in 2007,” said Don Krusel, President and CEO of the Prince Rupert Port Authority. “We’re very pleased to see Maher Terminals continue delivering on the vision of fast, reliable container service — while creating new opportunities for the workers, communities, and nations who benefit from this trade gateway.”

In conversation with Canadian Shipper today, Jean-Jacques Ruest, CN ‎Executive Vice-President and Chief Marketing Officer, said that 90% of the expansion targets the rail business.

He also noted that as volumes increase at the Port of Prince Rupert, they will increase at some of CN’s other facilities in the US and Canada.

“We want to attract more exports to match up with imports. We will ramp up our ability to give customers more matchback at that terminal. We have enough infrastructure at our intermodal facility in Prince Rupert. Saskatoon is where we are working with customers to source load grain going to the West Coast, as well as pulp. We’ve expanded that yard over the course of 18 months, and we will expand it further for more throughput,” he said.

CN is also working on additional fluidity through Detroit, Memphis and Chicago.

Ruest said CN will be making announcements about terminal capacity expansion in the East, and that in the West, the company’s capital expenditures have been more related to exports.

When asked about the effects of West Coast port congestion on Canada’s ports, and potential long-term diversion of cargo, Keith Reardon, CN’s Vice President for intermodal, said that a lot of the beneficial cargo owners of the freight “are choosing to stick with us at Rupert, or at some of the other ports we handle other than Rupert. We feel very comfortable to take on existing customers’ growth and additional customers. Where we were in alignment with the numbers we could handle we’ve worked well. When the numbers were too high, it created some congestion,” he said.

“We knew we would have high single digit growth in our intermodal. Because of diversions and the reduced network, we increased rail cars by 12%,” he added.

“We have more capacity this January than we had in January last year- in terms of locomotive, rail cars, inland terminals, crew, etc. Since July of last year there was a lot of traffic that came to Canadian ports because of West Coast congestion, and in early July diversions were very strong,” said Ruest.

Because this created an unannounced level of diversion, CN put a capacity management program in place.

“All traffic to the US was put in this program to prevent clogging at the port. We managed capacity and provided more resources,”  Ruest said.

Canadian traffic was not part of this capacity management program, which is managed quarterly for US customers.

“If you are a Canadian stakeholder, an announcement like the expansion of the Fairview terminal at Maher means more vessels, and a wider choice of shipping lines. We are confident of more vessels, and a wider choice of shipping lines. For Canadian exporters who are looking for more empty boxes going back to Asia, the more successful we are emptying boxes from Prince Rupert to the US, the more backhaul capacity,” he said.

Ruest emphasized the fact that for Canadian importers, “we don’t want the service in Toronto or Montreal to be affected by the fact we do US business. Every year we reinvest in capital infrastructure to create capacity,” he said.

Reardon added that in terms of terminal dwell time, in the months of January and February it was an average of 44 hours for a box at Prince Rupert.

“We work very hard with Maher to have the appropriate number of rail cars on spot under a 24/7 labour arrangement to create a fluid terminal. One of the things we did was add the Kaien long rail siding, allowing us to go to three trains in and out per day. The standard practice was 2 in and 2 out. That is a key enabler for us to keep the dwell times down,” said Reardon.

“If things are not flowing perfectly it allows us to catch back up. It’s the key to a fluid terminal and to resiliency,” he added.

“2015 will be a year Canadians will be proud of the intermodal logistics investments at CN. We will probably be able to announce more of what we are doing at our facilities soon. The message to importers and exporters is that there is more fluid service, and capacity coming in where and when they need it. We understand what our job is and are working hard at it including capital investment,” Ruest said.

The Maher Fairview terminal expansion project will provide a second deep-water berth, four additional gantry cranes, and land reclamation to further expand the container yard. On-dock rail trackage will also be expanded through densification of the current track configuration, which will be supported by a rubber-tired gantry crane operation. The terminal expansion will increase the capacity to over 1.3m TEUs annually, and is scheduled for completion in mid-2017.

In seven years of operations, traffic through Prince Rupert’s Fairview Container Terminal has grown at the fastest pace of any container terminal in North America. In 2014, volume increased 15 per cent over year-earlier volumes, while Fairview continued to post excellent terminal dwell times for containers.