August 03, 2005

Planned Prince Rupert Port May Streamline Imports from China to US

Prince Rupert is the Closest North American Port for Chinese Imports

Increasing congestion at West Coast ports is spurring global supply chain planners to pursue alternative routings. In 2004, Gridlock at the ports of Los Angeles and Long Beach forced more than 100 ships with $4 billion in cargo to be diverted to other ports. In response, companies sourcing in China want a better balance of transportation options to meet the demands of the North American market. The planned Prince Rupert port may offer an alternative route which adds flexibility to the China supply chain.

Prince Rupert is a small British Columbia town which is gaining fame in the China business community, where a $170 million container port is expected to open in 2007. Prince Rupert is the closest North American port for imports originating from China, since ships normally take a northern route across the Pacific Ocean. Cargo can then be sent on CN’s rail network to Chicago, Memphis, and other key distribution points in the American Midwest.

In fact, the port boasts that it offers the shortest route from Shanghai to Chicago. It is situated 436 miles/36 hours sailing time closer to Shanghai than Vancouver and over 1,000 miles/68 hours closer than Los Angeles. The port also claims to offer shippers immediate access to up to 80% of CN’s high capacity Northern Line and integrated CN Rail network.

Affects on China Supply Chain Strategies

Supply Chain planners assessing how the Prince Rupert alternative may affect cost and service levels over the next 5 years must first map out their supply chain flows and critique the network’s current capacity from China to North America. Companies then need to determine whether the Prince Rupert port will offer a significant advantage over their current set up. The current delays at West Coast ports will not ease up in the near future, thus companies can re-examine their lead time from production to delivery to incorporate the Prince Rupert port, to allow for delays at the West Coast ports. or find another alternative.

A comparative analysis should be part of an overall feasibility study for determining whether the Prince Rupert port offers a better alternative to your current arrangement. Factors to consider include: