The expansion project at the Port of Prince Rupert wrapped up Tuesday with the unveiling of the upgraded Fairview Container Terminal, a hub that analysts say has emerged as one of Canadian National Railway’s most prized corridors for future growth.
The $200-million investment by Dubai-owned DP World has turned the Prince Rupert facility into Canada’s second largest container terminal, increasing the annual capacity from 850,000 twenty-foot equivalent unit (TEU) containers to 1.35 million. Since opening in 2007, the container has grown from weekly service featuring one train per week to servicing major steamship companies and more than 14 trains a week. An upgrade was needed, said DP World Canada’s general manager Maksim Mihic in a statement.
“Prince Rupert’s success has been driven by its unparalleled geographical position on the trans-Pacific trade route, its high terminal productivity and its consistently low dwell times that have sustained despite our significant growth,” Mihic said.
With CN’s exclusive access to the terminal, Raymond James analyst Steve Hansen said in a note to clients Tuesday that the Port of Prince Rupert is “a strategic gem.”
“While CN’s vast network affords it many unique growth opportunities, the Port of Prince Rupert is quickly emerging as one of the railroad’s most prized growth corridors,” Hansen wrote, pointing to a “flurry” of current and future capital investment thanks to the site’s many advantages, including reduced congestion time and expenses in Canadian dollars.
Canada’s largest national railway has seen consistent growth this year, with higher freight volumes across a range of sectors driving a 20 per cent quarterly profit gain last month.
Walter Spracklin, an analyst with RBC Capital Markets, said in a note to clients that the upgraded Fairview Container terminal is winning share, as volume flows to CN.
“Based on the rapid expansion of volumes at Fairview, we believe that the advantages the terminal offers, namely the shortest sailing distance from Shanghai to the west coast and fast container evacuation is resonating with shippers,” Spracklin wrote.
Spracklin also said that in addition to boosting cargo volume, the Prince Rupert expansion could offer the opportunity to diversify the mix of cargo, particularly when it comes to liquefied natural gas and grain.
CN said it is committed to selling 80 per cent of the new capacity within three years.
Last week, both CN and Canadian Pacific Railway called on the federal government to invest infrastructure funds in rail capacity to Vancouver’s export terminals. CN said the new investments being made along the western coast will challenge existing rail infrastructure, and the government should prioritize infrastructure funding, particularly to Vancouver’s north shore.