Work has begun on a project to add rail, road, and power infrastructure at British Columbia’s Port of Prince Rupert.

Here are the quotes that should make Washington State port and trade officials nervous. And should make Washington State legislators think twice about punting a transportation investment bill to 2014 or 2015:

“This is not about building transportation infrastructure. The real story is that we are building instruments of trade,” Prince Rupert Port Authority president Don Krusel said shortly before attending a groundbreaking ceremony at the site.

“Canada is a trading nation and British Columbia is a trading province. Without our ability to expand the tools and the instruments to get our goods to international markets, we will not have continued prosperity and growth. This is all about building trade and thereby growing prosperity.” ($90-million Prince Rupert rail, road project to boost northern resource development, The Vancouver Sun.)

“The corridor project is the precursor to further expansion westward from the current container terminal footprint, and offers up the foundation for the more long range prospect of Container Port expansion,” the North Cost Review reports (Editor’s emphasis).

The project is part of a “broader $300-million multiphase port expansion underway at Prince Rupert” and is scheduled for completion in December 2014.  This project includes construction of five parallel rail tracks, a two-lane roadway and a port-owned power distribution system along an eight-kilometer (five-mile) corridor.

The project is being funded jointly by the governments of Canada and British Columbia, who have each contributed $14.6 million (US) and Canadian National and the port authority, who have each committed $29.1 million (US).

When this project is completed it will add 60 to 90 million tons a year of potential export capacity to Canada’s West Coast, according to the Canadian National’s General Manager Doug Ryhorchuck in a news release from the Prince Rupert Port Authority.

“The growing awareness of Prince Rupert as a North American gateway to Asia has created global interest in the port and the northwest region for investment and commerce. CN’s investment in the Road, Rail and Utility Corridor will strategically add export capacity and help strengthen the infrastructure to get Canadian goods to market.”

What’s at stake for Puget Sound in this competition?

Seattle Port Commissioner John Creighton explains:

“The maritime industrial cluster in Seattle alone provides, directly and indirectly, over 60,000 family wage jobs and generates over $10 billion in annual revenue for our region (See the 2009 City of Seattle study). Industrial businesses in Seattle, which rely on the efficient movement of freight, account for 35% of the city’s tax base, paying for essential government services for its citizens.”

The Port of Tacoma’s numbers are older and predate some strong growth, but are still impressive:

“The Port of Tacoma is an economic engine for South Puget Sound, with more than 43,000 family-wage jobs in Pierce County and 113,000 jobs across Washington state connected to Port activities. A major gateway to Asia and Alaska, the Port of Tacoma is among the largest container ports in North America. The Port is also a major center for bulk, breakbulk and project/heavy-lift cargoes, as well as automobiles and trucks.”

See below for more on the possible impacts to the Ports of Seattle and Tacoma from British Columbia Ports.

Learn more from our related stories:

Port of Prince Rupert On Course to Exceed Last Year’s Record Shipments

Port of Vancouver BC has Record Year for Containers, Capacity Projects

British Columbia to Invest $25 Billion in Infrastructure to Capture More Asian Trade

Canada Invests Again to Capture More Asian Trade

WANTED – A National Freight Strategy

One reason the British Columbia gateways ports of Vancouver and Prince Rupert are growing could well be the U.S.’s Harbor Maintenance Tax (HMT).   The Federal Maritime Commission (FMC) studied the issue, and estimates that a good amount of U.S. bound trans-Pacific cargo is passing through Canada in part to avoid the HMT, which may be as high as $109 per container. In fact the FMC concluded that half of the U.S.-bound import container cargo arriving first through Canadian ports would instead arrive first through U.S. ports if the HMT were to end. Read the FMC’s news release which summarizes why U.S.-bound goods from Asia first enter Canada; and a news release from U.S. Senator Patty Murray who along with U.S. Senator Cantwell called for the study.

Canadian officials dispute the finding. They believe the HMT is a relatively minor factor in shippers’ decisions as to where to route their cargo, and claim other factors influence shippers to use the British Columbia ports.  This presentation (pdf) from Robin Silvester, President and Chief Executive Officer of Port Metro Vancouver, has good slides and notes that explain the Canadian position.

The Seattle region is home to two ports, Tacoma and Seattle, which are perhaps the most impacted by the growing success of the British Columbia ports.  Tacoma and Seattle port officials, shippers, commodity groups and businesses have been sounding the alarm for years. They’ve advocated for federal and state policy changes and funding that could help the two ports increase their competitiveness, and sustain and grow jobs. A few elected officials have recognized the need and worked the issues hard, including U.S. Senator Maria Cantwell (D), and State Representatives Judy Clibborn (D) and Hans Zeiger (R). Newly elected U.S. Representative Denny Heck (D) is making SR 167 a priority issue. Others have carried the ball as well.

Seattle freight interests, while supporting the SR 167 project, are focused on the SR 509 project (learn more). This project would extend SR 509 from SeaTac Airport (itself a major freight movement center), providing an alternative truck route from the Port of Seattle, relieving some  I-5 congestion, and remove many trucks from SR 99 and local streets.

Port of Seattle Commissioner Bill Bryant (learn more about him) commented for this story:

“Tens of thousands of jobs across Washington State depend on the Ports of Seattle and Tacoma, which are in a competitive dogfight with the British Columbia ports. If we’re going to keep those jobs in Washington State we’re going to need to invest in infrastructure. We’re looking at over $100 million in deferred maintenance and refurbishing of important truck routes and bridges. If we don’t address that backlog, and keep our transportation network in adequate shape, jobs from Seattle to Eastern Washington will be at risk. That means the State has got to invest and that the Ports of Seattle and Tacoma must organize themselves so they are competing with British Columbia and not each other.”

While state legislators are grappling with transportation investment proposals that could help the Ports of Tacoma and Seattle and the jobs they support, there are some warning signs.  First, the Seattle community seems to be uniting behind locating a new NBA arena next door to the Port of Seattle. It would complicate if not inhibit future growth and operations at the Port. Second, while momentum is funding the SR 167 project in Tacoma, many state legislators seem reluctant to support a gas tax increase to fund this and other projects. Ironically, many of those legislators’ constituents have jobs directly or indirectly related to the two ports.

Unfortunately, it’s no stretch to believe that this time next year I’ll be writing about another record year for Port Metro Vancouver, no new funding for SR 167 and SR 509, and increased momentum for a NBA arena next to the Port of Seattle.