Federal Maritime Commission Chairman Richard A. Lidinsky Jr. plans to ask the agency at its Oct. 5 meeting to launch a study looking into accusations that the Canadian govermment unfairly subsidizes the diversion of U.S. import containers to Prince Rupert, British Columbia.
Lidinsky told the The Journal of Commerce’s 6th annual Canada Maritime Conference in Montreal Tuesday that he will ask for the investigation at the request of senators Sens. Maria Cantwell and Patty Murray, D-Wash., who are asking for help on behalf of the state's ports.
Lidinsky previously said the issue involves looser container inspections at Prince Rupert and possible Canadian goverment subsidies to the country's freight railroads.
"The perception (at U.S. ports) is the Canadian government is, if not behind, then it is supporting the activity at Rupert,” Lidinsky said.
He said the volume of U.S. containers moving through all Canadian ports is around 750,000 20-foot equivalent container units, compared to 140,000 TEUs in the early 1980s. Prince Rupert handles about 350,000 TEUs a year, much of which is transported to the U.S. Middle West by CN Railway.
Lidinsky said the FMC, which has jurisdiction over all U.S. waterborne cargo, loses this jurisdiction when the cargo is landed at Prince Rupert or any other Canadian port en route to the U.S. “The move by ship from Shanghai to Chicago is our waterborne commerce as contained in more than 1,200 service contracts files at my agency,” he said.
John Higginbotham, senior distinguished fellow at Carleton University in Ottawa, said the FMC study would not be worth its time. He said the diversion of cargo through Prince Rupert is occurring because of the natural advantages of the route and the cooperation of partners in the supply chain on both sides of the border.
"We maintain our own harbors, you can maintain your own harbors,” he said.
The FMC has to vote on Lidinsky’s request for the study. “The sooner we do this, the better off we will all be,” he said. “If we don’t address the issue now, we’ll be talking about diversion of cargo to Melford (Nova Scotia) when that terminal opens,” he said.
He said the study could force Congress to address the issue of whether the Harbor Maintenance Tax, is the best way to fund U.S. port dredging.