Winnipeg's Canadian Pacific rail yard - Date unknown Cole Breiland.

19 September 2012

Rail Cutbacks Won't Hit Trade

Winnipeg Manitoba - About 125 transportation and trade experts from throughout the south-central United States and Midwest as well as the four central Canadian provinces will be in Winnipeg next week talking about ways of enhancing trade.
 
It's this city's turn to host the annual NASCO (North America's Corridor Coalition) conference to hash out ways of uniting public and private sectors to address national and international trade and transportation issues and the economic development possibilities that go along with them.
 
Supply-chain development and trade issues are becoming continuous topics of discussion in Winnipeg these days as we all try to wrap our heads around the potential opportunities for Centre Port Canada, the national inland port being developed near Richardson International Airport.
 
Seeing how this regional economy is devoid of the things that cause boom-town economies elsewhere, Winnipeg is banking on the development of an inland port as a way to enhance long-term economic growth in the city.
 
The underlying rationale of the initiative, which we all need to be reminded is more like a 40-year project than a five-year one, is the pre-existence of a package of transportation assets that can be leveraged and tweaked so they become more valuable than they might be on their own.
 
We're talking about a 24-hour cargo-friendly airport, a proper highway network, a well-developed trucking and distribution industry, and three transcontinental railways that cut through the city.
 
It's not good news that one of those railways, Canadian Pacific, is discontinuing its container service to Chicago.
 
But it sounds worse than it is.
 
For starters, CP has been hauling, on average, less than seven containers a day from Chicago to Manitoba and Saskatchewan. In 2011, the railroad moved about one million containers on its network.
 
Ed Greenberg, a spokesman for Calgary-based CP, said the route will be discontinued effective Saturday because of insufficient volumes. It's hard to argue with that.
 
And the absence of locomotives pulling scant little freight today ought not to have much impact on the plans for whatever type of logistics hub Centre Port turns out to be.
 
A spokesman for Centre Port said, "We don't expect it (CP Rail's Chicago route cancellation) to have any impact. The majority of CP's freight to Chicago is from Asia, is unloaded in Vancouver and crosses the U.S.-Canadian border at Portal, Saskatchewan. (not through Winnipeg). CP's Winnipeg operations are strong and we have a good working relationship with them."
 
The assets upon which the Centre Port concept is based do not go away, and the service could come back.
 
"As part of ongoing monitoring of traffic patterns and volumes, our railway would look at revising service offerings if the need emerges in the future," Greenberg said. "With the rail network that we have in place, our railway is well-positioned to changing customer shipping requirements."
 
The light traffic does indicate, however, surprisingly little exchange of goods between the Prairies and the busiest transportation hub in the U.S.
 
But don't tell that to border agents in Emerson and Pembina, North Dakota, USA, who man the busiest border crossing west of Detroit-Windsor.
 
Total two-way trade has been between $13 billion and $17 billion for each of the past five years and where annual bidirectional traffic has exceeded one million vehicles in four of those years.
 
The final destination for that traffic is all over North America, but there are continuous efforts to forge stronger connections regionally.
 
Economic Development Winnipeg vice-president Greg Dandewich said there is always more that can be done.
 
"There is a variety of efforts to identify more opportunities for supply-chain and value-chain development from a bi-national and bi-regional perspective," Dandewich said.
 
Meanwhile, there's no telling what the trade flows will be like in coming years. And it is those changing global trade patterns, China is now the second-largest economy in the world, that Centre Port is trying to anticipate.
 
A tiny blip in CP's freight operations in the region does not alter the big-picture strategy that is in the works. The development of regional connections through NASCO and otherwise has to be ongoing to ensure economic health in this region.
 
But in the long run it's China, more so than Chicago, that will ultimately be the difference-maker for Centre Port.
 
Martin Cash.