Small port, big competition: Canada's threat to Seattle jobs

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PRINCE RUPERT, B.C. - The Port of Seattle has been raising the alarm about how traffic jams from a new sports arena in SoDo could slow cargo operations and threaten thousands of jobs.

 

But that's not the port's only worry.

 

KIRO 7's Graham Johnson traveled to Prince Rupert, British Columbia, to visit sudden new competition.

 

In the small, gritty town of Prince Rupert, B.C., the high-tech displays at the Port Authority visitor center make clear the port has big ambitions.

 

“Right now we have three cranes.  We're looking forward to the arrival of a fourth,” said Michael Gurney with Prince Rupert Port Authority.

 

Prince Rupert is emerging as a competitor to the ports of Seattle and Tacoma in part, because of geography. 

 

Ships form Asia take the great circle route to the West Coast up by Alaska’s Aleutian Islands.

 

Prince Rupert is a day closer to Asia than Puget Sound and three days closer than Southern California.

 

“This terminal is attracting the attention of shippers around the world,” said Gurney.

 

When the container terminal opened just over five years ago, it barely registered on the scales of global shipping.

 

But even during the recession, Prince Rupert was suddenly doing 30 percent of the container business of the Port of Seattle.

 

Rain is about all Seattle and Prince Rupert have in common. The population there tops out at 13,000, and there's so much room to expand, the port's strategic plan calls for reaching the size the Port of Seattle is now by 2020.

 

Rudy Finne has been a Seattle longshoreman since 1975.  He’s worried about losing jobs to Canada.

 

“They’re going to be moving north.  I’m really scared,” said Finne.

 

Scary is also a word Port of Seattle CEO Tay Yoshitani uses to describe growing competition from both Prince Rupert and Vancouver.

 

“I believe that is our biggest threat,” said Yoshitani. “(I’m) very worried.  Very worried.”

 

California handles about 70 percent of the West Coast container market.

 

Puget Sound and British Columbia get the rest.

 

Last year, Seattle and Tacoma combined had a 15 percent market share – just above B.C.

 

But the trend is moving in Canada’s favor.  In 2012, Port Metro Vancouver had a record year.

 

“We're just competing hard, and that's proving to be valuable to our customers,” said Gurney.

 

Vancouver executives say they’re focused on Canadian markets. Vancouver also has big expansion plans that have Seattle officials wondering how shipping companies will choose their future ports.

 

“They’re already shifting some of the cargo,” said Yoshitani.

 

The Port of Seattle doesn’t have numbers of how many jobs have been lost to Canada.  But with Seattle’s seaport responsible for some 30,000 jobs, Yoshitani says there’s a lot at stake if Seattle can’t compete.

 

“We’re going to lose some of those jobs and that's not good for anybody,” said Yoshitani.

 

It’s not just less time at sea that has shipping companies interested in Canada.

 

While many containers in Seattle are put on trucks that get stuck in traffic, in Prince Rupert, train tracks run right to the docks.

 

They lead to a sophisticated rail network that not only sends goods to Canadian markets, but also deep into the U.S.

 

“It’s all about the reliability and the speed of service,” said Gurney.

 

Eric Schinfeld of the Washington Council on International Trade says there’s another factor working in Canada’s favor – money.

 

“There’s a tax incentive for companies to not come into the United States,” said Schinfeld.

 

The U.S. imposes a federal harbor maintenance tax based on what’s in the containers.  The tax mostly pays for dredging projects elsewhere in the country.

 

“It can add thousands of dollars to a shipment,” said Schinfeld.

 

Ships going to Canada don’t have to pay for it.

 

 “We’re trying to get Congress to change the law so that there's a level playing field,” said Yoshitani.

 

Seattle’s advantage over Prince Rupert is that people actually live there and provide a market for imports.  But Port CEO Tay Yoshitani says the growth of Canada’s ports and the strength of its rail system signal the need to improve our own freight mobility --like building long-delayed overpasses crossing train tracks.

 

Seattle longshoreman Rudy Finne is pessimistic much will happen.

 

He says the push for a new sports area near the Port of Seattle tells him a lot about where marine cargo falls in the priority list.

 

“The difference is Prince Rupert wants it, and most of the government here doesn't want it.  That's the difference,” said Finne.

 

As that debate continues, Prince Rupert keeps growing.

 

“We're aware of the commentary and the angst,” said Gurney.

 

Angst over a small port poised to compete and hungry to grow.