ST. JOHN’S, Nlfd. – A report released by a Federal Minister of Transportation ‘s Advisory Committee is causing a rift between East Coast trucking associations.
The Newfoundland and Labrador Independent Truckers Association (NLITA) and the Owner-Operators’ Business Association of Canada (OBAC) are clashing with the Atlantic Provinces Trucking Association (APTA) over the report, titled “A Strategy for the Future of Marine Atlantic Inc.”
The three associations are at odds with each other over Recommendation #6 of the report, in which the advisory committee has proposed the discontinuance of the Marine Atlantic Inc. (MAI) drop trailer service (DTS) between North Sydney, N.S. and Port-Aux-Basques, Nfld.
NLITA and OBAC have said they are in favour of the entire 41-recommendation plan, including the proposed discontinuance of DTS.
In fact, NLITA president Jon Summers has said, “We couldn’t have come up with a better plan if they let us write it ourselves.”
The APTA however, is entirely against the recommendation, and has said if DTS is eliminated, businesses and residents of Newfoundland should expect to see a significant negative impact on the economy in terms of quality and variety of goods available; increased costs to shippers, manufacturers, and consumers; and degradation of the distribution of goods throughout the Central and Western areas of the province.
“What the report fails to identify correctly is the volumes that are moved by the drop trailers and how that group can continue to serve without becoming live carriers,” said APTA president, Ralph Boyd.
Both Boyd and Summers met with representatives from Transport Canada in St. John’s, Nfld. to respond to the proposed plan June 21.
Summers said the drop-trailer service has a significant negative impact on cost, schedule adherence and customer satisfaction and that the added deck space created with the discontinuation of the MAI’s service will have a very positive effect on the travelling public.
“This move to streamline operations should make long waiting times at ferry terminals a thing of the past and alleviate the frustration that was far too common when travelling to and from the Island,” Summers said. “We believe all our members will see a real improvement in their earning potential over the course of a year, but more significantly, the plan to discontinue drop-trailer service will be a tremendous boon to the Island economy and to small producers who rely on the timely delivery of their goods to market.”
Boyd said that though the committee’s focus was how to improve service levels to the majority of the users, they still failed to look at the big picture.
“If you look at the number of drop-trailer companies (about a dozen), the number of live carrier operators (about 1,100), and the number of passenger loads per year (about 420,000 people), you’re going to want to satisfy the most visible group of people, meaning the drop-trailer users come last,” he said. “But that small group of people represents almost 50,000 trailers a year going across that surface. If you convert 50,000 trailers to live, what added pressure does that put on Marine Atlantic operations in order to serve the Newfoundland marketplace? I don’t think that the report went far enough to answer those questions.”
Boyd presented the results of an AMEC study commissioned by the APTA to evaluate the economic impact on Newfoundland and Labrador if drop trailer service were to be discontinued.
The study indicated that of the $34 million in revenues for MAI from commercial vehicles in 2004, more than 50 per cent of those vehicles were drop trailers. It also showed commercial traffic on MAI has increased by 20 per cent since 1998, while other user class volumes continue to decline. Drop trailer usage specifically, has increased by 15.3 per cent between 2001 and 2004, while live usage had increased by only 5.4 per cent.
The study cited the increase in the use of DTS was because of delays experienced at MAI for live units and the need to maximize manpower and equipment efficiency.
The findings also indicated that converting from drop trailers to live units would cost the trucking industry approximately $50 million in capital costs and an additional $30 million per year in operating costs. According to the study, because the trucking industry cannot absorb these costs, they will be passed on to manufacturers and shippers, and eventually to consumers, with an eventual increase of 15 to 25 per cent in consumer prices in Newfoundland.
However, the NLITA chalks up these numbers to fear mongering by the APTA and suggested a list of three alternatives drop trailer carriers have instead of passing on costs.
The first alternative is to deliver trailers as live loads.
“This is asking them to do nothing more than what the owner/operators and smaller transport companies have been doing successfully for years,” Summers said. “Our rates have been competitive, and apart from delays that are out of our control, our customers are satisfied with our level of service.”
The second is to use the Oceanex service, which Summers said has increased its capacity by 44 per cent with a second ship sailing from Halifax to St. John’s weekly.
“It should be noted that some carriers use this service as well as the MAI drop trailer service and in fact have quoted lower rates to customers when utilizing the Oceanex service.”
The final alternative is a tentative project plan that would run a new ferry service between the Port of Belledune, N.B. and Corner Brook, Nfld. Though the project has been put on hold, Summers said that drop trailer carriers shouldn’t count it out just yet.
“This service could provide substantial savings to shippers, and is one that should now be explored by the drop-trailer carriers,” he said.
Joanne Ritchie, executive director of OBAC, says that these alternatives, combined with the 15 per cent rate decrease MAI is offering, could greatly increase the efficiency of these carriers and result in lower costs.
“Rates are now considerably higher than the equivalent road-distance cost and that hurts business,” she said. “We’re excited about rate stabilization and the planned introduction of newer, larger vessels on the crossing that will accommodate more passenger traffic and more commercial traffic. It’s a win-win situation for just about everyone.”
But even though the APTA has indicated that they recognize the need for changes to improve MAI service, they stand by their original recommendation to the advisory committee which asked for the purchase of a separate commercial vessel capable of handling both live units and drop trailers. They have asked that the vessel have reasonable passenger capacity, the capability of meeting the traffic offering and the ability to maintain a year round on-time schedule. Before the Canadian Government makes any final decisions concerning the discontinuation of the service, Transport Canada will review points from all three associations and consult further with stakeholders.