Industry Issues: Transportation Systems Should Meet Needs of Economy, Not Vice-Versa
September 1, 2004
Too often these days transportation "strategies" seem to be developed based on the flawed premise that the economy needs to adapt to meet the needs of the transportation system rather than recognizing that what we need to do is to refine the trans...
Too often these days transportation “strategies” seem to be developed based on the flawed premise that the economy needs to adapt to meet the needs of the transportation system rather than recognizing that what we need to do is to refine the transportation system to meet the needs of the economy.
Too often transportation systems are viewed as ends in themselves.
The reality is that transportation systems are tools for supporting economic and social growth and that we need to ensure that they support current and future business needs rather than attempting to force businesses to adjust their practices to meet the needs of the transportation system.
Nowhere is this philosophical perspective clearer than in the ill-conceived notion that shifts to modes other than trucking should be encouraged, supposedly to improve the efficiency of the entire transportation system.
If so much freight can so easily be diverted to rail, or to marine for that matter, one must ask why is it not moving by those alternative modes now?
Since shippers are the ones who decide how freight will move, one has to assume that either shippers are irrational economic actors, using an inefficient mode out of ignorance, or accept that there must be good, sound economic reasons why they choose truck over the other modes.
I think it is fairer to assume that shippers are in fact rational economic actors and that they are using the mode that best meets their economic needs and that they will continue to do so, making it ridiculous to suggest that they can be forced or induced to use another, less efficient mode.
It is the worst kind of folly to assume that just because the highway system is overburdened and there is possibly excess capacity in other modes that shippers will change to what they consider to be a less efficient mode of transportation just because someone philosophizes that such a diversion would be beneficial.
This is a misguided strategy doomed to failure, and it gives false hope that no other action (i.e., investment in highways) needs be taken. It distracts people from doing the harder but more effective things that should be done.
Those other actions require the investment of time, money and political leadership and it is all too attractive to some to simply dismiss the need to undertake more substantive actions and rely on “modal shift” as the panacea.
The undeniable fact is that trucking dominates the freight movement industry because of the higher level of service it can provide.
Trucking is certainly not the cheapest mode, but it is the most reliable and flexible mode.
And a superior service level is what drives modal choice, not characteristics like transport distances and commodity type.
While there are people who are good at measuring volumes and patterns and capacities, and sometimes even rudimentary economic factors like price, it is more difficult to quantify intangible factors (quality of service, for example) and therefore they do not take them into account.
There is a lot of talk these days about tolls, other forms of user charges and road pricing.
Using these tools to coerce shippers into changing their shipping patterns is another example of the underlying desire to make the economy conform to the needs of the transportation system rather than vice versa.
By making it more difficult and/or expensive to move goods, we will not encourage shippers to change their shipping patterns, we will encourage them to re-locate to other, more transportation friendly jurisdictions.
Adding even more costs to an already heavily taxed sector (direct transportation taxes provide over $6 billion each year to federal and provincial coffers compared to a reinvestment of just over $1 billion) will undermine our precarious economic situation even further when it comes to attracting new direct investment.
Our governments – both federal and provincial – need to pay heed. To fail to do so is a recipe for economic decline.
It is mystifying to me that a country like Canada, whose economic well-being is so dependent upon transporting goods to market, can range from complacency to outright hostility when it comes to making transportation investment – particularly highway investment – a priority.
We do so at our own peril.
– David Bradley is president of the Ontario Trucking Association and chief executive officer of the Canadian Trucking Alliance.