In its December budget the government of Canada sent a strong signal to the U.S. administration that it would do its part to keep terrorists out of North America.The budget also sent a strong message ...
In its December budget the government of Canada sent a strong signal to the U.S. administration that it would do its part to keep terrorists out of North America.
The budget also sent a strong message to Canadians that Ottawa understood the relationship between Canada and U.S. trade, modern manufacturing processes and trucking when it allocated $1.2 billion toward making our border more trade efficient. This message was quickly reinforced with the announcement of a Canada-U.S. agreement to streamline border processes between the two countries.
It seems the significance of these federal initiatives was not lost on the railway industry which panned the budget announcement as “shortsighted.”
What is shortsighted however, is the railways’ continued denial that North America’s trade patterns and freight distribution systems are built around the truck. Only trucks can provide the safe, reliable transportation service required today.
Congestion at the northern border pre-dated the tragic events of Sept. 11. However, for too long, that was seen by many to be the truckers’ problem. The link between trucking, trade and Canada’s economy was either misunderstood, or ignored. That seems to have changed.
Of course, whenever there is talk of governments investing in roads or border crossings the railways object.
In recent decades, railways have seen their market share dwindle as the economy and the demands of shippers changed. If you listen to the railway advocates, public policy alone is to blame for their relatively low (but still immensely profitable) market share. They claim to represent the safest, cleanest, most over-taxed and under-appreciated mode of freight transport out there, but they just can’t get any government to listen to them.
Maybe it’s because their arguments don’t stand up to scrutiny.
Take the environment. Truck engine and fuel emission standards have been regulated for years. Unlike in the U.S., rail fuel and engine emissions are not regulated in Canada.
The railways argue they are more fuel-efficient than trucks, but as the Centre for Sustainable Transportation has recently concluded, this is like comparing apples and oranges. Trucks basically service the shorter distance, small shipment market. A study conducted for the NAFTA Commission on Environmental Co-operation also recently concluded that a shift of freight from truck to rail would actually increase emissions of the most harmful pollutants in major trade corridors.
Another study of the Ontario freight system conducted last year for Transport Canada found that a shift of freight from truck to rail would have almost no effect on highway traffic on the most congested sections of Highway 401 between Montreal and Toronto. Why? Because trucks are not the major cause of congestion, and trains don’t provide door to door service.
Taxation is another railway bogeyman.
In Canada, the fuel taxes and registration fees that truckers pay cover more than their fair share of costs for their rights of way. In fact, in Ontario truckers pay the equivalent of almost the entire capital and maintenance budget of the provincial highway program.
The real reason that trucks are now the preferred mode of choice for the majority of shippers is not public policy. Trucking’s competitive advantage over rail is better service and reliability. Even Paul Tellier, chief executive officer of Canadian National, admits that rail is already 10-15 per cent cheaper than truck. This is another way of saying that the two modes are competing on something other than price.
Here to stay
It must be acknowledged that the railways have improved their service in recent years. Consequently, there is more intermodal cooperation than ever before, but unless shippers abandon their current production and distribution strategies, trucks are here to stay.
This might explain why the railways’ outburst against the federal government’s decision to invest in better borders was so shrill.
The fact that most Canadian manufacturing centres are within one day’s truck trip from the US industrial heartland creates the ability for plants on both sides of the border to be supplied from the other country. For Canada, this has been an enormous economic boon. But it has also made us vulnerable. Anything that threatens the reliability of supply – like an inefficient border, or even the perception of problems at the border – could have significant implications for supply contracts and consequently, direct investment and jobs in Canada.
I can understand why some railway advocates may not want to see the border fixed or at least not in ways that allow trucks to move goods efficiently. But the nature of the North American economy tells us that there is no choice, no turning back. The train has left the station.
Nevertheless, the railway industry continues its relentless battle to have public policy put more of the trucking industry’s freight on the steel wheels. They are still financially supporting CRASH, though the rumor mill has it that the level of the contribution may have decreased.
More recently, the Railway Association of Canada re-introduced one of its old strategies of trying to convince railway pensioners to write their local politicians on behalf of RAC.
We all need to ensure balance in the arguments put forward. It’s easy to contact your local politician. Your local/provincial and federal government Web sites list the addresses and e-mails of every member.
A simple note reminding them of the importance of the trucking industry – a simple gesture – would be a big help.
– David Bradley is president of the Ontario Trucking Association and chief executive officer of the Canadian Trucking Alliance.
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