CANADA:GLOBAL TRADE & TRANSPORT: CAN PRAIRIE FARMERS BE GLOBALLY COMPETITIVE? Presentation to TOC INTERMODAL CONFERENCE Speaker: Douglas Campbell Campbell Agri Business Strategists Inc Agr, Transport, Trade and Government Consultants Prairie-To-Ports Gateway & Inland Port, CEO Location: RAI Conference Centre, Amsterdam, Netherlands December 5, 2007
Asia North American Trade 1960s + Japan, then Taiwan 1980s + Asian Tigers, Hong Kong, Singapore 2000s + China, then India 2010s + Vietnam, Thailand, Malaysia 3000 Million People (vs. CA at 30 Million) China: $19 Billion/ mo Trade Surplus China, India: sustained 10% GDP growth China s 6 th Largest Trading Partner is a Country called Wal-Mart USA
Asian Container Ports dominant 6 of World s Top 10, 2005 (Million TEU) Singapore 23 Hong Kong 22 Shanghai 18 Shenzhen 16 Pushan 12 Kaohsiung 9 Rotterdam 9 Hamburg 8 Dubai & Los Angeles 7.5 CA s BC Ports 2.0 Source: Hong Kong Port Development Council
WTO Doha Negotiations Hong Kong, December, 2005
Canada Argues for Aggressive Trade Liberalization
Trade Drivers CA needs Trade, 38% of GDP Atlantic / Seaway UK & France Commonwealth NAFTA Fort Erie - Buffalo; Windsor - Detroit; Sarnia - Port Huron Asia Pacific Japan & China Grain Wal-Mart Express
Why the US Imports from China: Retail Price vs. Ocean Freight, 2006 Item Shelf Price Ocean Frt % TV Set $700 $10.00 1 Vacuum $150 $ 1.00 1 Scotch $ 50 $ 0.15 0.3 Coffee, 1kg $ 15 $ 0.15 1 Beer, can $ 1. $ 0.01 1 Source: Boston Consulting Group, 2006
Asia s Share of World GDP China 15.4% Japan 06.4% India 06.0% asean 05.7% ASIA 33.5% USA 20.1% EU 14.8% (UK 3.0%) CA 01.8% Source: ACDEG
US Trade with China: 1990-2005 Exports up 743% Imports up 1527% Total Merchandise Trade up 1339% By 2020 China = the Hub of all Asian N.A. Trade China will account for 60% of Asian NA Trade Foreign companies will account for 60% of China s exports Source: CME
Purchasing Power Parity 2005 Trillion US$ US 12.5 EU 12.2 CHINA 8.2 Japan 4.0 India 3.9 Germ, UK, FR, IT, Brz, RU: 2.6 2.0 CA, MX, SP,SKo,Indonesia: 1.3
CA s Global Trade Success: needs innovation, product value-addition, top logistics Trade Growth & Competition accelerate China, India, Brazil, Argentina grow pre-doha Productivity >> Canada re raw commodities Canadian Agriculture needs value-addition Bulk declining competitiveness Trade liberalization $1.3 Billion gain, G&O Domestic transformation Barley Beer, Beef & Pork Wheat Ethanol, Gluten Canola Margarine, Bio-Diesel
From Trade Transport GLOBAL TRADE GROWTH Shippers and Customers seek GATEWAYS to US MARKETS RESPONSE of CANADIAN MODES SEARCH FOR IMPROVED LOGISTICS INLAND PORT CONCEPT
China s Determination
China s Inland Marine Traffic Reach, Pearl River Delta
Canada s Asia Pacific Trade Flows Railways CP 1885 (Vancouver) Canadian Northern 1906 (Vancouver) Grand Trunk Pacific 1912 (Prince Rupert) Pacific Great Eastern BC Rail Bulk Commodities: Grain, Coal, Potash, Sulphur Grain sales /aid to China, Japan, India ( 60s +) Great Lakes / Seaway 1870s 1970s Shift to Pacific Ports 1960s 2020 Atlantic Panama Canal ( 60s) Vancouver ( 70s) Prince Rupert ( 80s) Portland (2000) Merchandise leads shift to Container Bulk > 95% until 90s; Container >15% since 2000
Canada s Trade Connectors Seaboard Ports Atlantic & Seaway: Halifax, QC, Montreal, Hamilton Pacific Vancouver Prince Rupert Railways Canadian Pacific Canadian National Shortlines BNSF? Trucking Trans-Canada & Yellowhead Highways Transload to US rail (BNSF, UP, NS, CSX to US markets)
Vancouver Port growth 1885 Transcontinental Railway (CP) 1912 1928, 7 major grain terminals 1960s 80s, major commodity sales Grain Potash, Coal, Sulfur 1970s 90s, expand bulk handling capacity Grain 3 new port terminals Potash & Sulfur 3 new port terminals Coal 2 new port terminals 1980s, expand container handling capacity Van-term, Cen-term, Lynn-term, Delta Port
Wal-Mart Drives Logistics Search for Manufacturing base China China consolidates future staging role Pacific Ocean vs Indian Suez Atlantic Atlantic Ports & Seaway Chicago Pacific Ports & CP / CN Chicago Canada, vs US, vs Mexican Gateways? US Distribution via Prince Rupert? Chicago Memphis Kansas City
Port of Prince Rupert
CN goes chasing Wal-Mart Express
Enhancing Logistics Options The Competition USA vs. MEXICO vs. CANADA Pacific North Line Edmonton vs. Saskatoon vs. Winnipeg Pacific South Line Calgary vs. Moose Jaw vs. Winnipeg American, Mexican and Back door Competition US West: LA / LB, Portland, Seattle, Tacoma MX West: Manzanillo / Cardenas / Monterrey US Gulf: Houston / Dallas US East: NY / NJ, Savannah, Norfolk The Back Door strategy Indian Ocean Suez CA Halifax / Hamilton or US Atlantic Seabord, or Gulf, or Panama
Continental Corridors
Canadian Transport Response The BEST of CANADA Ports: Van-Rupert, Halifax-Hamilton, QC-Montreal Railways: CN - 3 Seaboards, CP. Highways & Trucks Twinning of TCH by 2009 Turnpike Doubles 135 feet long. (Reimer, 15Nov.07, WESTAC) Location, Location, Location CISCOR NAFTA Asia Pacific
Why Not Prairies? Assets Export mentality: STEP, SK Agrivision, Canola, Pulse & Flax Growers, Weyburn & SW Inland T s Transcontinental Railways CN, CP = Class One Highways & Trucks & Shortline Railways, GWR R & D, engineering, electronics (IRG) Rail & Truck and Farm Equipment Mfg. Available, expandible Land Steady, and Affordable skilled Labour pool Location (Prairie Hub), Location (APG & Corridor), Location (NAFTA Gateway) Where? Swift Current - Moose Jaw Weyburn / Regina =S. Corridor Battleford P.A. - Saskatoon Yorkton, = N Corridor
Why Saskatchewan? 4 th most populated Province, 1929 30 million acres of rich agricultural soils Grows 1000 x more than it consumes Born to Export: Grains, Potash, Oil, UR Midpoint Calgary-Edmonton to Winnipeg Vancouver-Rupert to Thunder Bay China to Chicago! Best located & cheapest staging area for Asia Pacific trade / transport corridor But Land-locked. 1000 miles from Tidewater Needs strong surface transport infrastructure
Vancouver Advantage ASIAN FOCUS & HERITAGE 47 YEAR MARRIAGE WITH CHINA INFRASTRUCTURE CONSISTENTLY POSITIVE RESPONSE.. IS IT SLIPPING? COMMERCIAL & POPULATION GROWTH EXPENSIVE LAND & LABOUR TRAFFIC CONGESTION, INEFFICIENCIES In situ Options expensive, Investment returns uncertain
Prince Rupert Advantage CHARLES MELVILLE HAYS, D.1913 CN RAIL MTN ROUTE SUPERIOR 2 DAYS SHORTER SAILING TIME UNCONGESTED WATERFRONT DEEP WATER PORT 60 TO 80 FEET VS 45 FT (HI TIDE) AT LIONS GATE VS 36 FT (LO TIDE AT CENTERM, VANTERM, LYNNTERM)
Inland Port Advantage PROBLEM: VANCOUVER LOWER MAINLAND LIMITED, EXPENSIVE WATERFRONT LAND & LABOUR COSTS CONGESTION BERTHING & TUGBOATS RAIL VS TRUCKS RAIL vs TRUCK vs AUTO LEVEL CROSSING DELAYS GREENHOUSE GAS EMISSIONS SOLUTION: PRAIRIE ADVANTAGE NO EXPENSIVE WATERFRONT ECONOMIC LAND & LABOUR PRICES RECONNECTS CN, CP NO CONGESTION GREENFIELD OPTIONS EFFICIENT & EXPANDIBLE DESIGN PARAMETERS CONNECTS CHICAGO
Saskatchewan Advantage Integral Part of Asia Pacific & NAFTA Corridors Traffic & Trade Growth Consolidate Sask s ongoing Trade Role Empty Returns an Opportunity Stuffing Pigs & Cans Value-Added Exports
NEXT STEPS FOR SUCCESS It takes much more than WISHING!! Capture Industry Decision-Makers Shippers, Rail & Marine Carriers & Port Operators Focus Government Decision-Makers Federal Transport, WD, Finance, Agriculture, Industry Legislators: House of Commons & Senate Provincial Finance, Transport, Industry, Agriculture, Enterprise SK Municipal Go after Cities, RMs, SARM & SUMA Faciliators: MJ REDA, SK Agrivision, STEP, STA Roundtables, Facilitation Develop a Plan Focus on Implementation
Prairie-To_Ports Gateway
Prairie-To-Ports Gateway & Inland Port Not-For-Profit Public-Private Sector Corp Private Sector Investors Shippers: Pork, Potash, Pulses, Pulp & Paper Carriers: Trucking. Rail Municipalities, EDOs Other Exporters, Importers Individual companies (WalMart, Cdn Tire, Sears) Trade Associations, CME, IEAC Secretariat led by D. E. Campbell, CEO www.prairiegateway.ca Doug.campbell@prairiegateway.ca 1-403-932-6866 Calgary, Alberta, Canada