Truck News


Choppy seas for East Coast carriers as costs soar

DIEPPE, N.B. – Truckers in the Atlantic provinces have seen rate creep this year, but new and higher fees in four areas – fuel surcharges, cost of living, drop trailer and security – at Marine Atlantic keep that ferry operator...

DIEPPE, N.B. – Truckers in the Atlantic provinces have seen rate creep this year, but new and higher fees in four areas – fuel surcharges, cost of living, drop trailer and security – at Marine Atlantic keep that ferry operator way out in front in the trucking industry’s “fond thoughts” department.

Some increases more or less track the increase in the cost of living; ie., the cost of getting off Prince Edward Island via the Confederation Bridge went up by 2.3% this year.

The cost of the first two axles is up a dollar to $44.25 and the cost for each additional axle rose a quarter to $7.25 per axle.

“Toll rates are reviewed annually at the Confederation Bridge and are adjusted based on the rate of inflation, subject to approval by the federal government through Transport Canada,” explains Laurel Lea, coordinator, marketing and community affairs, Strait Crossing Bridge Limited.

Northumberland Ferries raised its rates for commercial vehicles crossing between Caribou, N.S. and Wood Islands, P.E.I. and between Digby, N.S and Saint John N.B. by less than 2%. It did not raise its fuel surcharge, which is $10 and $50, respectively, for its two ferries.

“We are controlling our fuel costs internally with measures such as slightly longer crossing times, running on two engines instead of four between Digby and Saint John, keeping our hulls polished and turning off generators that are not needed,” says Don Cormier, vice-president, operations and safety management, Northumberland Ferries.

The Halifax-Dartmouth Bridge Commission raised its MacPass tolls for crossing the MacKay and Macdonald bridges by 14%. The increases range from 29 cents for vehicles with two axles and dual rear wheels, to $1.05 for eight-axle vehicles.

“This is kind of significant to us because we could do 16 crossings a day on the bridges. Ninety per cent of our work is in the Metro area. If you utilize owner/operators, this is a big hit for them,” says Colleen O’Toole, finance officer, Lighthouse Transport Services in Dartmouth.

New Brunswick-based carriers saw a rude increase in their International Fuel Tax Agreement registration fees. Last year it was nothing but a $5 decal charge. The new annual fee structure runs from $25 for carriers with one vehicle to $1,500 for those with 50 or more vehicles.

“We went from the lowest to the highest in Canada,” notes Jean-Marc Picard, executive director, Atlantic Provinces Trucking Association.

There may be some other nickel and dime fee increases in the Maritimes, but the real stinger is that packet of Marine Atlantic rate increases. For starters, on Feb. 13 it imposed an across-the-board increase of 4% over 2011 prices and a new $3.50 security fee. Marine Atlantic has so far held its fuel surcharge at its 2011 rate of 21% of the general tariff rate for passengers and vehicles.

What has carriers steaming though is the $50 increase in the drop trailer fee, from $210 last year’s to $260. The fee was $110 in 2010, by the way. The fee was initially scheduled to come into effect in February, but Marine Atlantic delayed the increase to Apr. 1 to allow commercial customers to better prepare for the adjustment.

“This rate increase is necessary to reflect the rising costs associated with materials, supplies and labour. Marine Atlantic has upgraded its equipment to continue providing this service to commercial customers and costs have increased,” explains Tara Laing, communications officer, Marine Atlantic.

There are mutterings from the trucking side though that this explanation is codswallop, as in: ‘Cry me a river that Marine Atlantic has had to replace some equipment.’

“The reasons for the increase in the drop trailer fee? I’ve heard them all. I think it is a federal government mandate to have a higher recovery for users for sailings between Newfoundland and Nova Scotia and a lower subsidy percentage,” says Gordon Peddle, CEO of Rexton, N.B.-based Atlantica Diversified Transportation Systems. He doesn’t swallow Marine Atlantic’s justification for the increase. “It takes 15 minutes to jockey a trailer on the boat. The best I can charge is $75 an hour. They are charging $260.”

The sharp drop fee increase also concerns grocers shipping to Newfoundland.

“We’re not happy with the fee increases, especially since they seem to come out of nowhere. The feds are making these demands on Marine Atlantic and Marine Atlantic turns around and raises its rates. There is no justification for these increases,” says Jim Cormier, director Atlantic Canada for the Retail Council of Canada.

The increase will cost Atlantica $160,000 a year, which it will pass on to its clients. New Brunswick-based Day & Ross dealt with the increase by announcing a surcharge.

“We have no alternatives but to pass on the costs to our customer base,” says Doug Harrison, president of Day & Ross General Freight. “Fifty dollars is not a big number over a whole trailer load, but as we see (various) fees, it adds up to a large number. No carrier can afford to absorb these costs.”

There is speculation that carriers that cannot pass on the increase will drop the Newfoundland market and seek loads heading to destinations with lower overhead.

The increase is changing the way freight is shipped to Newfoundland. Atlantica, for example, is now shying away from drop trailers.

“Last year I was predominately using drop trailers. Now I try and go live as much as possible. I think it is cheaper,” Peddle says. This also raises the question of driver availability.

There is also talk about shifting freight from Marine Atlantic to Oceanex, which is the only other marine carrier to Newfoundland. This is not a cut and dried option though.

Peddle comments, “Going to Oceanex is not an option. If we put just-in-time or perishables on Oceanex it jeopardizes the service and maybe even the quality of the food. There is a capacity crunch on the Oceanex option. We need the Marine Atlantic option.”

Cormier speaks favourably of Oceanex as an option.

“It is a valid option, depending on the product. Grocery retailers are using Oceanex and are tapping into it. But Marine Atlantic does two crossings a day. Oceanex does two crossings a week. When it comes to fresh produce, it means that there is no other option than Marine Atlantic.”

Well now, that depends on the source of that fresh produce. As Captain Sidney Hynes, executive chairman and co-owner of Oceanex, explained to me once about his Montreal-St. John’s container ship operation: “You will be in Toronto Friday morning and in St. John’s Monday morning. The road from Toronto (to Sydney, N.S.), plus Marine Atlantic to Port aux Basque, then to St. John’s? They simply can’t match (us).”

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