Boston, MA 09/02/2014 (wallstreetpr) – Canadian National Railway (USA) (NYSE:CNI) will benefit from the opening of the remote port Prince Rupert, which only attracts tourists earlier. The new facility will reduce the delay occurred due to the labor dispute in U.S. West Coast region and congestion over the local railways.
Advantage
According to Bloomberg Intelligence, traffic in Prince Rupert port improved by 49% in July compared to the same period last year. The gain in traffic was due to increasing containers volume from East Asia such as China.
Moreover, the Prince Rupert Port Authority said that the port is well-positioned and closer to Shanghai than Los Angeles, and Canadian National Railway (USA) (NYSE:CNI) has an exclusive connection with the port that will provide a complete access to East Asia and the U.S. Midwest.
In addition, the railroad also well connected that can reduce the transit time if the cargo is coming from Shanghai to Chicago (less than two days) and Los Angeles (less than three days) through Prince Rupert.
Besides Prince Rupert port, container traffic at Vancouver’s port also increased during July and expects to continue the trend. Though both the ports have less traffic compared to Los Angeles, but the increasing volume expects to raise the capacity in the future. Factors like limited labor dispute/strike and congestion/disruptions over the rail lines will boost the demand for the Canadian ports than the U.S.
Hind side
The disruption in transport and strike will affect the performance of the port as it reduces the shipment capacity and container volumes. For instance, during March, the strike by the truck drivers slowed down the shipment capacity in Vancouver port to the extent of CAD885 million of cargo per week.
Canada, though experiences less frequent railroad disruption compared the U.S. port and the opening of another port for commercial usage will improve the shipment capacity.
