American concerns about container shipments through Fairview Terminal reached a new height last week, as Federal Maritime Commission Chair Richard Lidinsky confirmed that congressmen from the west coast had asked him to investigate Prince Rupert to determine if it puts U.S. ports at an unfair disadvantage.
“It is a very complicated issue, involving the harbor maintenance tax, weaker container inspections, NAFTA and possible subsidy of cargo railroads to Canada, but this issue will have to be studied, so stay tuned,” the Journal of Commerce (www.joc.com) quoted Lidinsky as saying.
“I realize it’s awkward to do this kind of thing with our largest trading partner and neighbor, but it’s a regulatory situation that should be clarified, and the sooner we can do it, the better off we’ll be.”
The FMC will decide whether to do a formal inquiry, a notice of inquiry or a focussed investigation sometime next month. However, Prince Rupert Port Authority Vice-president of Marketing and Business Development Shaun Stevenson said he’s certain the commmission won’t find any unfair practices taking place.
“It’s concerning because this has been festering for some time in that the efficiencies and advantages of going through Fariview Terminal to get containers to the U.S. has resulted in a lobby in Washington related to subsidies and rail subsidies, which is the furthest thing from the truth. So it’s concerning, but we’re also confident that if they investigate and research they will find that the only advantages Prince Rupert offers is its location and the efficiency of the operation,” he said, adding that the claim of weaker inspections was also unfounded based on 100 per cent screening at the terminal and additional screening at the border.
“Canadian port authorities were commercialized in 1999, so there is no direct benefit coming from government, we have limited borrowing capacity and we really have to live off of our own revenues…It seems like the west coast ports are trying to find a way to impose a tariff on goods imported through Canada.”
Stevenson also took issue with concerns about weaker screening.
“This is absolutely false. U.S. bound cargo from Prince Rupert on CN has a higher level of screening than in the U.S. There is 100 per cent screening at Fairview Terminal and the containers are screened again at the border,” he said.
“From a security standpoint, there is no more secure entryway into the U.S. than through Prince Rupert.”
Should the commission approach the port authority for information, Stevenson said they will be fully cooperative.
“We welcome the opportunity to provide information to the commission because I’m confident that if they look they will find that we are purely commercial and receive no subsidy in contrast to U.S. ports, which have a lot of government subsidy,” he said.
A memo from the Association of Canadian Port Authorities, for instance, mentions that Canadian port authorities pay for their own dredging while that cost is covered by the government in the U.S., U.S. ports have access to favourable interest rates via Government Obligation Bonds and several ports receive funding from thestate and local governments.
Lidinsky, who was appointed by President Barack Obama in 2009, heads up a commission whose goals include monitoring “the laws and practices of foreign governments which could have a discriminatory or otherwise adverse impact on shipping conditions in the U.S.” and “to foster a fair, efficient and reliable international ocean transportation system and to protect the public from unfair and deceptive practices”.