By Alex Binkley
Collaboration is becoming a key business driver in the transportation industry as ports and carriers realize how much they depend on each other for business, speakers at the annual Rail Government Interface Conference said.
Michael Murphy, Vice-President of Government Affairs at Canadian Pacific, said that more than two-thirds of CP’s rail traffic involves a port or crossing the border where it interchanges with several American railroads. About 52 per cent of its intermodal traffic and almost 50 per cent of its bulk shipments represented export traffic. The railway originates 10,000 shipments a day from 3,000 customers and in the process interfaces with five other Class 1 railways and numerous shortlines, he added. To do that, CP used about 40,000 cars, 1,450 locomotives and more than 1,000 crews.
Since 1998 rail freight rates have risen by 19 per cent while commodity prices for the goods the railways haul have more than doubled, he pointed out. “Canadian freight rates are the lowest in the world at 2.7 cents per revenue tonne kilometre or $27 per tonne for a 1,000-kilometre length of haul.”
Karen Oldfield, President and CEO of Halifax Port Authority, noted that 70 per cent of the tonnage passing through the Nova Scotia port comes by rail from Canada and the United States. “Ports enable global trade by selling the services of our partners in moving goods through the port,” she noted. “Lots of shippers need export help and we can provide it.” Although usually considered as a port serving the North Atlantic trades, Halifax gets more than half of its traffic from Southeast Asia and less than 40 per cent from Europe.
Robert Lewis-Manning, President of the Canadian Shipowners Association, said there is much to be gained through collaboration among the rail, marine, road and air sectors. “It is important to foster closer ties within the transportation industry. The marine industry is starting to break out of its shell.” The different sectors have to convince governments that too much regulation simply impedes trade, he added.
Lewis-Manning and Oldfield both stressed the need to attract more young people into the transportation sector if it is going to play its role in boosting the economy. Michael Bourque, President of the Railway Association of Canada, notes that the deregulation of the railway industry by the federal government, “unleashed a range of market based forces that allowed the rail supply chain to become efficient, competitive and profitable over the next fifteen years. A significant step in the industry’s evolution was the implementation of innovative measures to operate the entire network more efficiently.
“The keystone of this innovation: precision railroading, focused on asset utilization, velocity and efficiency,” he adds. “These areas of focus are now widely accepted in other modes of transportation as the drivers of productivity. We’ve heard a lot about “operating ratios” because railways in Canada have been driving these ratios down. What other mode or industry has succeeded in improving its productivity so demonstrably?” Canada’s growing exports highlighted the need “to optimize the supply chain across the country, in partnership with other players such as ports, terminals, ship owners and governments,” he added. The railways are focused “on collaboration and improving predictability and reliability in the rail supply chain.”
The railways have agreements with customers and supply chain partners as part of a globally competitive supply chain, which has led to tremendous success for Canadian ports in winning new business, he continues. “Rail is the backbone of an advanced, integrated supply chain infrastructure. About ten thousand rail cars are moved every single day in Canada. Thanks to commercialization, today’s rail transportation system is a complex network characterized by high productivity, efficiency and transparency, and low costs.”