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Short sea shipping on Canada’s west coast

DELTA, B.C. - As traffic congestion worsens in the Lower Mainland of B.C. and Canada struggles to meet the terms of the Kyoto Accord, an old shipping concept is suddenly receiving a fresh look....

DELTA, B.C. – As traffic congestion worsens in the Lower Mainland of B.C. and Canada struggles to meet the terms of the Kyoto Accord, an old shipping concept is suddenly receiving a fresh look.

Short sea shipping refers to the movement of cargo by marine vessel through inland and coastal waterways and between points traditionally served by rail and truck. It’s a form of freight transportation that’s widely used in Europe due to high population densities and road congestion. Now, Canadian and U.S. transportation officials are pushing to have the concept more widely explored here at home, which could result in the marine mode taking a larger chunk of the overall freight pie.

Allan Domaas, president and CEO of the Fraser River Port Authority, has been one of the biggest proponents of short sea shipping along Canada’s West Coast. He insists it’s essential to lessen shippers’ reliance on truck transportation, especially in light of the recent container trucker strike which crippled the Port of Vancouver this summer.

“We clearly need alternatives to get cargo around the region,” Domaas says. “We have the opportunity to build a more efficient, effective intra-port system. Think how efficient we could be if every terminal had an intra-port rail link and an intra-port water link. It’s a huge opportunity for this region.”

Domaas says the trucking industry shouldn’t feel threatened by the emergence of short sea shipping, as it’s a mutually complementary service. He says truckers could achieve better earnings by shuttling containers short distances between ports rather than sitting in Lower Mainland traffic for hours on end.

And he also says a short sea shipping alternative will make Canadian ports a more appealing gateway for international shippers, which would result in higher overall cargo volumes moving through the ports – and more freight means more money to be made by all modes.

“It’s about trying to build a gateway that has as many alternatives as possible to ensure every user can find a solution for their needs,” Domaas says. “It’s an underutilized activity and it’s time we look at it in a new light.”

Paul Landry, president of the B.C. Trucking Association (BCTA) is not so convinced the time is right for short sea shipping to play a larger role. He questions whether the level of service shippers have become accustomed to thanks to Just-in-Time deliveries can be matched when adding a marine component to shipments.

“I think people are sort of enamored with the idea and the concept makes sense, but the economics and practicality aren’t there just yet,” he says. “It might take 45 minutes to an hour to move something from Burnaby to Mission by truck, but how long would it take to detach a trailer, put it on a barge, move it up the river some distance, handle it again and then have another truck ready to pick it up?”

Landry said short sea shipping makes more sense for longer trips (for instance from Vancouver to Los Angeles), but even then he doubts that shippers will be quick to jump on-board.

“Shippers are always concerned about price and service,” he points out. “I don’t think anyone’s going to pay a premium so one more truck will be removed from the I-5 corridor.”

While shippers may not want to fork out the extra money to help relieve road congestion, there have been some suggestions that government may. Dr. Mary Brooks, William A. Black Chair of Commerce with the University of Dalhousie, says public perception is another force driving short sea shipping – however flawed the logic may be.

“Part of the driving force, particularly in the U.S., is that car owners are very frustrated with long-haul trucks on major commuting corridors,” she says. “They are taxpayers and voters. People don’t necessarily know how the chicken they buy in the supermarket gets there.”

She also says there’s a perception that marine vessels are far less polluting than tractor-trailers (despite the fact the new generation of truck engines are nearly emission-free).

Adrian Samuel is manager of sales and marketing with Seaspan Coastal Intermodal (SCI), a short sea shipper connecting the Lower Mainland of B.C. to Vancouver Island. He says short sea shipping is experiencing continued growth thanks largely to the rising cost of fuel and the shortage of truck drivers.

“As the driver pool starts tightening up and fuel costs more, people will look to our model,” insists Samuel.

SCI provides a roll-on, roll-off service between its Delta terminal and those in Nanaimo and Swartz Bay on Vancouver Island.

“We provide the bridge where there is no bridge,” Samuel says. Currently the only alternative for trucking companies serving Vancouver Island is B.C. Ferries, which requires the driver and tractor to accompany the load throughout the six-hour round trip.

“If I’m a trucking company facing a labour shortage and equipment shortage, I’m thinking here’s a chance for me to free up some of those assets,” says Samuel.

With border congestion becoming more of an issue, SCI is also exploring new lanes into the U.S.

“Border congestion may open up new markets very quickly,” Samuel suggests. “Dollar for dollar, we wouldn’t be cheaper than trucking when you have a guy willing to run to Seattle for $400 – there’s no way we can compete with that. But when he or she can’t do that anymore, all of a sudden (short sea shipping) is going to be much more viable. It’s not that far away.”

Samuel admits it will be a challenge to change the mindset of shippers who have become reliant on Just-in-Time deliveries.

“There needs to be a change in mentality from Just-in-Time to Just-on-Time,” he says, noting SCI offers a scheduled service which is nearly always adhered to.

Dr. Brooks agrees that the success of short sea shipping may hinge on whether or not shippers are prepared to loosen their service expectations.

“One of the things we hope to find (in future research) is the importance of Just-in-Time,” she says.

Even in Europe, where short sea shipping is commonplace, some shippers have expressed concern the mode is “slow and complex” according to a 2004 report authored by Dr. Brooks and James D. Frost. The paper, entitled Short sea shipping: a Canadian perspective, noted European shippers were concerned that “the transport chain was not integrated, but a ‘broken chain’ due to the lack of integration with the land modes at either end of the short sea service.”

The report also suggested there are other roadblocks threatening to prevent short sea shipping from reaching its potential in Canada. A U.S. Harbor Maintenance Tax of 0.125 per cent of cargo value on U.S. freight imports acts as a disincentive for cross-border shippers, the report says.

As well, differences in the advanced pre-notification rules that apply to truck and marine modes also serve as a deterrent. While trucking companies must only provide electronic pre-notification 30 minutes prior to arriving at the border, marine carriers must provide their information 24 hours in advance.

“This is not conducive to the development of short sea shipping,” the report says.

The findings of Short sea shipping: a Canadian perspective, were that there need to be two conditions in place before short sea shipping becomes more feasible in Canada. They are: “Road congestion sufficiently severe to increase unreliability of land transport delivery times, and environmental savings sufficient that customers are willing to pay for them.”

The report concludes “What is not clear…is whether Canadian customers would be willing to pay more for environmentally-friendly transport if additional short sea services were mounted.”

While Brooks says it remains to be seen whether short sea shipping will play a significantly larger role in the Canadian freight transportation picture, she urges the trucking industry to view the concept with an open mind.

“One of the things that may be of interest is whether or not truckers perceive this as a threat,” Brooks to
ld Truck West. “I’m not sure that they should, because the trucking industry is going to have a lot of problems with the looming driver shortage. A lot of drivers will want to have better working conditions such as more short-haul trips and more time home with their families. It may be better for everybody all-around.”

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