Burns Lake link in west coast chain

Burns Lake prosperity from Prince Rupert port expansion a tough sell to local businessman

You may have noticed a steady increase in the volume of rail traffic coming through Burns Lake over the past several years. A lot of it is tied to the steady rise of traffic through the Prince Rupert port since 2005.

From a total of about 4.5 million tonnes of total shipping weight in 2005 to 22.3 million tonnes of traffic in 2012, the Prince Rupert Port Authority (PRPA) expects the trend to continue once various expansion projects come online.

Gateway 2020 is the PRPA’s 10-year expansion plan encompassing all projected developments. The expansion would accommodate expected increases across the range of bulk products shipped out of the Prince Rupert port.

By 2020, assuming natural gas projects slated for Prince Rupert, and assuming increases in coal and forestry shipments come online, the port is expected to handle up to 90 million tonnes of bulk product every year.

Most of the current loads are for energy products, like coal and pellet fuel, and containerized forest products. Energy and forest products account for a little more than three quarters of total tonnage, while consumer goods, and other containerized exports and imports make up the rest of the shipping volume.

Ken Veldman, Director of Public Affairs for the Prince Rupert Port Authority was in Burns Lake last week for a public presentation and meeting with locals.

He said Asian and international demand for resource and energy products – coal, forest products, potash, and natural gas – is booming, but there is a ‘west coast crunch’ where the supply chain pinch is felt in Prince Rupert.

“People are looking to Prince Rupert to provide the solution to the capacity challenge,” Veldman said.

Increased capacity in Prince Rupert means increased traffic through Burns Lake. Although a large percentage of projected increases come from proposed natural gas pipelines terminating in Prince Rupert, rail traffic is expected to increase significantly.

Coal shipments are expected to increase from the current 12 million tonnes per year to over 24 million tonnes per year by 2014. That doubling of rail traffic for coal alone will have a significant impact on the number of trains going through Burns Lake.

According to Veldman, port-related supply chain jobs account for approximately 2200 workers, with only one third of those workers based in Prince Rupert. The rest – CN rail workers and logistic support personnel are included in Veldman’s figure – are spread along the supply chain.

Regional industry, like forestry in the B.C. interior and through-out the Northwest or coal mining in Northeastern B.C., is crucial to the success of the port. Strong industries throughout the province mean a strong port, Veldman explained.

“Our prosperity is dependent on Burns Lake’s prosperity,” he said.

While Veldman’s prosperity comment was meant to reflect the PRPA’s recognition that its export business is tied to the fortunes of provincial and interprovincial resource industries, one local business owner in the audience that evening took exception to the implication that port expansion automatically meant a benefit to communities along the transportation corridor.

Bob Schneider, owner of DTU Industrial Supplies in Burns Lake, questioned the value of the coastal port to local business when economies of scale mean that businesses along the transportation corridor have no access to containers unloaded in Prince Rupert.

“I try to import stuff out of China, and do you know where they unload it… Edmonton? I have to pay to get it trucked back to Prince George. We can’t even take a truck into Prince Rupert to get the container off the ship and bring it to Burns Lake.”

Although containers can be off-loaded in low volumes in Prince Rupert, the costs are prohibitive.

“What prosperity is it to Burns Lake?” Schneider asked.  “Everybody benefits except for the people who have the real estate the trains roll through. When there’s a container coming from the west, we should have a way to have it brought to our location and reduce our costs. We need to be able to maintain a competitive edge.”

Veldman acknowledged that the cost of moving only a few containers at a time mean that there was little incentive for the development of off-ramps for local pick-ups or deliveries, whether in Prince Rupert or Prince George.

“Off-ramps are driven by volume,” Veldman said. “[We] can’t stop in every community or you lose the value of what [the] supply chain represents. The value… is speed.”

Veldman said the PRPA doesn’t have a role in generating off-ramp logistics. Instead, those logistics rely on private sector investment.

Schneider let the matter rest by pointing out that the nature of doing business in Northern B.C. has been affected by the current supply chain infrastructure.

“Right now, we don’t have two-way trade, we have one-way trade,” Schneider said.

“We watch it go only one way. We’re tied to large distribution centres elsewhere, changing the whole way business can operate in the North.”

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