OTTAWA — In the recent federal budget, the government sent a strong signal to the U.S. administration that it would do its part to keep terrorists out of North America, writes David H. Bradly in a National Post editorial. Mr. Bradley is chief executive officer of the Canadian Trucking Alliance.
The budget also sent a strong message to Canadians that Ottawa understood the relationship between Canada-U.S. trade, modern manufacturing processes (such as just-in-time inventory) and trucking when it allocated $1.2-billion toward making our border more trade efficient. This message was reinforced with the subsequent announcement of a Canada-U.S. agreement to streamline border processes between the two countries.
It seems all this was not lost on the railway industry who, through its national association, panned the budget announcement as shortsighted (It’s Shortsighted to Put More Money on Inefficient Roads, Dec. 12).
What is shortsighted is to continue to deny North America’s trade patterns and freight distribution systems are built around the truck. Only trucks can provide the kind of safe, reliable transportation service required in today’s just-in-time environment.
The growth in trucking over the last few years is a direct reflection of that reality, with trucks hauling about 70% by value of Canada’s trade with the United States.
There are about 14 million truck border crossings per year, with the lion’s share of those at about a half dozen ports in southern Ontario, south of Montreal and Vancouver.
Congestion at the northern border pre-dated the tragic events of Sept. 11. However, for too long, that was seen by many to be the truckers’ problem. The link between trucking, trade and Canada’s economy was either not very well understood or ignored. That seems to have changed.
Of course, whenever there is talk of governments investing in roads or border crossings, Canada’s railways stand up to object. The railway association’s article was no exception.
In recent decades, railways have seen their market share dwindle as the economy and therefore the demands of shippers changed. If you listen to the railway advocates, public policy alone is to blame for their relatively low (but still immensely profitable) market share. They claim to represent the safest, cleanest, most over-taxed and under-appreciated mode of freight transport out there, but they just can’t get any government to listen to them.
Maybe it’s because their arguments just don’t stand up to close scrutiny.
Take the environment. Truck engine and fuel emission standards have been regulated for years and are getting tougher all the time. Unlike in the United States, rail fuel and engine emissions are not regulated in Canada.
The railways argue they are more fuel-efficient than trucks, and for what they do best — long distance shipments of bulk commodities — they are. But as the Centre for Sustainable Transportation has recently concluded, this is comparing apples and oranges. Trucks basically service the shorter distance, small shipment market. A study conducted for the NAFTA Commission on Environmental Co-operation also recently concluded that a shift of freight from truck to rail would actually increase emissions of the most harmful pollutants in major trade corridors because of the stricter environmental standards applied to trucks.
Another study of the Ontario freight system conducted last year for Transport Canada found a shift of freight from truck to rail would have almost zero effect on highway traffic on the most congested sections of Highway 401 between Montreal and Toronto. Why? Because trucks are not the major cause of congestion, cars are, and, more importantly, trains don’t provide door to door service.
Taxation is another railway bogeyman.
Quoting U.S. studies on pavement wear-and-tear as some are wont to do is irrelevant. In Canada, the fuel taxes and registration fees that truckers pay cover more than their fair share of costs for their rights of way. In fact, in Ontario, truckers pay the equivalent of almost the entire capital and maintenance budget of the provincial highway program.
The real reason trucks are now the preferred mode of choice for the vast majority of shippers is not public policy. Trucking’s competitive advantage over rail is better service and reliability. Even Paul Tellier, CEO of Canadian National, admits rail is already 10% to 15% cheaper than truck. This is another way of saying that the two modes are competing on something other than price.
It must be acknowledged the railways have improved their service in recent years. Consequently, there is more inter-modal co-operation than before, but unless shippers abandon their current production and distribution strategies, trucks are here to stay.
This might explain why the railways’ outburst against the federal government’s decision to invest in better borders was so shrill. The fact most Canadian manufacturing centres are within one day’s truck trip from the U.S. industrial heartland creates the ability for plants on both sides of the border to be supplied from the other country. For Canada, this has been an enormous economic boon.
But it has also made us vulnerable. Anything that threatens the reliability of supply — like an inefficient border or even the perception of problems at the border — could have significant implications for supply contracts and consequently, direct investment and jobs in Canada.
I can understand why some railway advocates may not want to see the border fixed or at least not in ways that allow trucks to move goods efficiently. But the nature of the North American economy tells us that there is no choice, no turning back. The train has left the station.
(David H. Bradley is chief executive officer of the Canadian Trucking Alliance.)