CALGARY, Alta. - The trucking industry and the railways have traditionally been viewed as long-time adversaries - parallel universes that operate independently of each other and compete fiercely for t...
CALGARY, Alta. – The trucking industry and the railways have traditionally been viewed as long-time adversaries – parallel universes that operate independently of each other and compete fiercely for the same freight. But neither industry functions within a vacuum, and this realization is prompting some carriers to change the way they perceive the railways.
Representatives of the two transport modes have publicly exchanged barbs in the media on countless occasions, and they still can’t resist the temptation to ruffle each other’s feathers from time to time.
Witness Canadian Pacific (CP) Railway president, Robert Ritchie, addressing the Calgary Chamber of Commerce on Nov. 5, 2002: “Rail is the safest, most cost-efficient and environmentally-friendly form of surface transportation that we have.”
Meanwhile, in his monthly Truck News column, Canadian Trucking Alliance chief executive officer, David Bradley, wrote: “The sole reason for the predominance of trucking comes down to the fact our industry consistently provides better service than the railways.”
While the public jousting between lobby leaders on both sides of the fence won’t end anytime soon, there appears to be an evolution underway affecting how these two transport modes perceive each other.
Although the battle lines have clearly been drawn in the sand, an unprecedented number of companies are ignoring those boundaries and forging new ties with old rivals.
On Aug. 28, 2002, Grande Prairie, Alta.-based Wiebe Transport forged an alliance with short-line railway, Alberta RailNet. The partnership involved construction of a 14-car rail site adjacent to Wiebe’s truck receiving and departure yard.
The unlikely marriage was the result of increasing customer demands to offer the most cost-effective and efficient movement of goods. Wiebe Transport realized it could enhance its efficiency and deliver better customer service if it involved the railway in its operations.
“It’s something where we can, as a trucking company and a railroad, do things that help each other,” Ron Wiebe, general manager of Wiebe Transport, said upon opening the new facility. “There’s always going to be a need for rail and a need for truck and if we both recognize that, then we can work together and service our customers better … We’re never going to replace each other.”
That school of thought is gaining momentum in the North American trucking industry, says Tom Malloy, vice-president of business development with the Intermodal Association of North America (IANA).
IANA is a U.S.-based association designed to “represent the combined interest of all the parties involved with freight intermodal movements.”
Malloy says he’s noticing an unprecedented level of co-operation between the trucking and rail industries north of the border.
“It’s really taken off in Canada as a great partnership and a real barometer of the way that two transportation modes can effectively work together,” says Malloy. “In the U.S. it’s been a little bit slower and that’s because of several factors.”
For the most part, the U.S. has a large amount of domestic traffic that simply isn’t intermodally conducive, says Malloy. However, he adds the story is quite different in Canada, as evidenced by the latest data collected by IANA.
“The Canadian intermodal story throughout the year 2002 has been one of great success,” says Malloy.
The fourth quarter market trends report compiled by IANA indicates intermodal movements within Canada have increased an average of 13 per cent each year since 1996. Trucking companies involved in the movement of intermodal freight are reaping the rewards, according to the report.
“Despite a slower economy, many major motor carriers reported firmer pricing and better earnings in the fourth quarter,” the report indicates.
“Earnings improved even as truck tonnage growth declined.”
Consolidated Fastfrate has aligned itself with the rail industry perhaps more so than any other Canadian carrier. The company has its own yards co-located with CP yards in Vancouver, Regina, Winnipeg, Thunder Bay, Toronto and Montreal.
Just last September, the carrier also relocated its Calgary yard to be closer to CP’s intermodal facilities.
Kevin Hankinson, vice-president and general manager for Consolidated Fastfrate’s B.C. and Alberta operations, says the benefits of co-locating are far-reaching and well worth the cost of relocating.
“Because of our close proximity we are able to have later cut-off times to supply loaded containers to CP,” says Hankinson.
“That allows our customers to ship later and allows us to consolidate more customer orders onto the containers that need to depart that particular day.”
The same logic applies when loads are being picked up for delivery to receivers.
“From a receiving perspective…we can get those containers once they arrive, quicker than our competitors who may be on the other side of town,” says Hankinson.
“Our shippers can ship later and the receiver of those goods can receive them earlier.”
Before relocating its Calgary yard, Consolidated Fastfrate was moving 200 containers a week over 20 kilometres of city roads. Now that distance has been virtually eliminated resulting in reduced wear and tear on roads and equipment as well as reduced fuel, labor and maintenance costs.
“Those containers are still there but they’re moving from their facility to our facility for all intents and purposes off the street and out of traffic,” says Hankinson.
“Being that close to the rail facility means that much less truck traffic is moving between the rail facility and our cross-docks.”
The words ‘less truck traffic’ are exactly what scare many fleets away from working with the railways. Last year, federal Transport Minister David Collenette, worked the trucking industry into a frenzy after suggesting more freight should be shifted off the nation’s highways and onto rail.
While proponents of the trucking industry were quick to point out the proposal’s many flaws, fleets that work closely with the railways don’t necessarily see reducing truck traffic as a bad idea.
Hankinson points out that in Consolidated Fastfrate’s scenario, it’s a win-win situation for everyone – the customer benefits from reduced rates, the community benefits from decreased truck traffic on city streets and of course the trucking company and railway benefit as well.
While some truckers may feel their jobs are at stake if the trucking industry works alongside the railways, both Wiebe and Consolidated Fastfrate have been able to grow their business, and thus hire more drivers, as a direct result of their partnerships with rail.
Therefore, Consolidated Fastfrate doesn’t mind sharing some of its business with the railway one bit. In fact, the fleet co-operates with CP in joint-marketing initiatives, loss prevention and even when recruiting new customers.
“Individually we each have strengths and we each have weaknesses,” says Hankinson. “Obviously as individuals we can’t satisfy those weaknesses properly. When we combined CP’s strengths with our strengths, we found we can go to a large retailer and offer them a blended solution to take advantage of both our strengths.”