By Steve Stackhouse

When planning a sea-based shipment between Asia and North America, it’s natural to picture containers flowing through the Port of Los Angeles or the Port of Seattle. You can be forgiven if the Port of Prince Rupert doesn’t first come to mind — but the more you learn about it, the more you’ll wonder why it doesn’t.
As it turns out, the Port of Prince Rupert in British Columbia is the closest North American port to Asia. It’s more than 1,000 nautical miles closer to Hong Kong than Los Angeles is, and about 500 miles closer than Seattle. And it’s ideally suited for handling goods flowing to or from the Midwestern United States, sitting at the western terminus of the rail line with the easiest route across the Rockies.
No wonder that such places as Prince Rupert and the ports of British Columbia’s Lower Mainland are at the heart of the Canadian government’s Asia–Pacific Gateway and Corridor Initiative, which is beginning to take shape across the western part of the country.

The Asia-Pacific Gateway and Corridor Initiative
Stretching from the British Columbia Lower Mainland and Prince Rupert ports across Western Canada and into the heartland of North America is what the government refers to as the Asia–Pacific Gateway and Corridor. It’s a network of transportation infrastructure, including ports, roads and rail connections, airports and border crossings — and it’s a corridor that Canadian officials tout as a prime link with Asia.
“It starts with a geographic advantage,” says Brian Bohunicky, director general of strategic policies at Transport Canada. On a map, the corridor appears as a pair of routes crossing Western Canada. One runs from Vancouver through Calgary, Alberta, across Saskatchewan to Winnipeg, Manitoba. The other begins about halfway up the British Columbia coastline in Prince Rupert and runs through Edmonton, Alberta, and across Saskatchewan on its way to Winnipeg. From Winnipeg, it’s fast and cost-efficient to reach points from the U.S. Midwest through Montreal and beyond. That’s why the Asia–Pacific Gateway and Corridor is increasingly seen as an attractive “Shanghai to Chicago” economic connection.
As any world map makes clear, Canada offers a tremendous economic gateway to the commercial centers of Asia — Vancouver is nearly two days closer to Shanghai than California ports are, and Prince Rupert is at least three days closer. Yet despite the significant cost savings shippers can enjoy by choosing these routes, Canada’s West Coast ports currently handle only about 9 percent of the container traffic along the North American West Coast.
Getting the word out about the location advantages is one key to steering more trade through Canada’s Asia–Pacific Gateway and Corridor. But officials are not leaving anything to chance, and are taking numerous steps to make a solid corridor even more attractive for Asia–Pacific trade by increasing its capacity, exploring regulations and operating practices, and addressing governance issues to be sure all “owners” of the corridor are on the same page.
The Canadian government last October launched the Asia–Pacific Gateway and Corridor Initiative, an integrated set of investment and policy measures pertaining to trade with the Asia–Pacific region. “It’s an attempt to look at the transportation system as a whole system,” says Bohunicky. “With the speed at which things move along the global supply chain, you have to look at the whole system.”
The initiative includes nearly $600 million worth of current and future public investments in infrastructure, transportation technology, border security projects, and competitiveness initiatives. Meanwhile, private sector firms have committed nearly $6 billion in investments linked to the Asia–Pacific Gateway and Corridor through 2010, involving rail, port, and airport facilities. The result, Canadian government officials believe, is that container traffic at British Columbia’s major commercial ports will grow to 7 million or more units annually by 2020. That, in turn, would boost Canada’s share of West Coast container traffic from 9 to 14 percent.
It’s a results-oriented plan, according to David Emerson, Minister of International Trade and Minister for the Pacific Gateway and the Vancouver–Whistler Olympics. The goal, he says, is to improve Canada’s efficiency as an Asia–Pacific gateway, and includes significant early actions as well as long-term strategic planning.
Ground was broken in February on the initiative’s first project: construction of a new seven-lane bridge across the Pitt River. According to Lawrence Cannon, Minister of Transport, Infrastructure and Communities, “the Pitt River crossing connects key economic and transportation facilities with Greater Vancouver.”
The new bridge, to be completed by the end of 2009, replaces two existing swing bridges that have seen their traffic counts triple since 1985. The design of the bridge will reduce traffic congestion on the bridge itself while also reducing interference with marine traffic below because it will use fewer piers.
Other improvements are on the way:
• Construction of new road/rail grade separations along the Roberts Bank Railway Corridor, intended to enhance the efficiency of rail operations and improve the flow of community traffic.
• “Twinning” of the Trans Canada Highway in Banff National Park and highways elsewhere that have the potential to become bottlenecks.
• Construction of the new South Fraser Perimeter Road along the south side of the Fraser River, linking primary transportation facilities in the Vancouver area.
• Further transportation improvements to be determined and enabled by the Asia–Pacific Gateway and Corridor Transportation Infrastructure Fund.
In addition, the Canadian government has announced other steps to make the corridor a more attractive connector between Asia and North America:
• New licensing regulations aimed at making Lower Mainland ports more efficient, reducing wait times and increasing the number of daily trips made by trucking owner–operators; government officials have recognized the potential benefits of integrating the port authorities of Vancouver, Fraser River and North Fraser.
• About a million dollars’ worth of improvements at rail crossings to make them safer for both trains and area drivers.
• The government’s recently introduced Blue Sky international air transportation policy, intended to create opportunities for travelers, businesses, and the air industry, while building upon expanded air-services agreements in the Asia–Pacific region, including China and India.
• Adoption of a fast-track consultation and planning process designed to carry the initiative forward and steer decision-making and long-term strategic planning.

The Port Rupert Connection
The geographic advantage of connecting to Asia through Canada is most dramatic in the small but growing dot on the map known as Port Rupert. Don Krusel, president and CEO of the Prince Rupert Port Authority, offers an exercise to demonstrate. “Take the short string approach,” he says. Grab a piece of string and a globe. Pick a point in the middle of the continent — say, Chicago — and hold one end of the string there on the globe. Pull the string taut and place the other end over a major Asia–Pacific location, such as Shanghai. “The string will go right through the Port of Prince Rupert and the transportation corridor that links Prince Rupert with Asia and Prince Rupert with the rest of North America,” he says.
Prince Rupert, with a population around 16,000, is no stranger to Asia–Pacific trade. Its port was founded more than a century ago as a gateway for the silk trade between Asia and Europe, says Barry Bartlett, the port’s manager of corporate communications and public affairs. Its more recent history has involved the export of Canada’s natural resources, adds Krusel. “It has the largest and most modern grain handling facility in Canada and one of the most modern coal facilities,” he says, and it has facilitated the export of huge quantities of lumber.
Now, the port is plunging into container handling in a major way, through a partnership with the New Jersey-based terminal operator Maher Terminals. “With the introduction of container handling, we’re moving from a regional exporter of commodities to a major international gateway,” Krusel says.
Maher Terminals is in the midst of a container terminal project that will become operational in phases, beginning in October, says CEO Brian Maher. The first phase will have an annual capacity of half a million TEUs (20-foot-equivalent units), and will be able to transfer containers directly from cargo ships to rail lines. Phase 2 of the project, due to be completed toward the end of 2010, is to add another 1.5 million TEUs of capacity.
According to Maher, creating a brand-new container gateway makes perfect sense given the explosive growth of trade with Asia. “The pressure on West Coast ports in growth and congestion is significant,” he says. “Both shippers and shipping lines are looking for other access to their markets.” Prince Rupert, he says, is a natural.
The port promises highly efficient transfer of goods in part because, as Bartlett points out, it will have the first pure intermodal container terminal in North America. In other words, it’s there purely for the transfer of cargo, mostly to rail carriers — inbound containers won’t be hanging around in the small community of Prince Rupert but will instead be passing through on their way to points inland, so congestion is much less likely. Nearly all of the cargo passing through the terminal will be loaded onto rail cars, not trucks.
Prince Rupert marks the western terminus of the Canadian National rail line, Maher says, and the line “has the best grades across the Rockies of any rail line.” The port enjoys mild enough weather to operate year-round and has North America’s deepest harbor.
Maher says interest in a new Asia–Pacific container gateway will be high. “Shippers like your Wal-Marts and Nikes are looking for new gateways, so it’s not that hard to get them interested.”
According to Krusel, as the inbound Asia–Pacific trade through Western Canada grows, it will create some attractive outbound opportunities. “Containers have to find their way back to Asia, and the majority are empty,” he says. That creates highly favorable economics for shipping the kinds of value-added goods that are in demand in Asia. For example, Krusel envisions opportunities for forest-product manufacturers to develop facilities all along the Western Canada transportation corridors, creating everything from door frames to wood flooring to manufactured housing to send back overseas through British Columbia’s ports.
Bartlett says the development prospects in the Prince Rupert area are unique, given its history as a community that has grown up around a port rather than vice versa: “There is a lot of industrial-zoned land available.”

Stronger Connections, Better Efficiency
Beyond Prince Rupert, improvements are in the works throughout the Western Canada transportation corridors. For example, planned expansions at Vancouver/Fraser ports are to grow container capacity from 2.78 million to 5.5 million TEUs by 2020. That plus the Prince Rupert developments would bring Canadian West Coast capacity to at least 7.5 million units total. Investments at the ports are to total at least $1.2 billion by 2010, including a $170 P&O Ports container terminal project and $80 million TSI Terminals projects, all in Vancouver.
Railways, too, are improving their infrastructure. Canadian National and Canadian Pacific are investing at least $2.5 billion in their systems to boost capacity and increase productivity at distribution and transload centers.
Meanwhile, airport facilities also are beefing up to meet increased demand. Vancouver International Airport, for example, expects passengers to double to 28.4 million by 2020, and will boost gate capacity by more than 60 percent in about the same time frame. More than 50 flights a week now link Vancouver with China and Hong Kong.
Complementing the infrastructure improvements are investments in productivity. This year, the British Columbia Maritime Employers Association is to invest more than $10 million on employee training, using new training technology.
The public and private investments together are creating great opportunities for all of North America to connect with suppliers and customers in Asia–Pacific locations. That’s what the Asia–Pacific Gateway and Corridor Initiative is all about, says Bohunicky: “It’s an integrated set of infrastructure investments and quality measures, looking at how the whole system serves the global supply chain and optimizing how that system works. This is about operating from a North American foundation and using that North American platform to reach the rest of the world.”