Philip Davies to Speak at METRANS International Urban Freight Conference in Long Beach on October 18, 2017
Mr. Davies will present a paper addressing the question: Does environmental compliance impact port competitiveness?
The Southern California Ports of Los Angeles and Long Beach handled a combined volume of 10.4 million laden TEU’s in 2016, representing 25.6% of overall North American container trade. Both ports are undertaking massive capital investment projects to accommodate anticipated traffic growth and protect their market share from competing for North American gateways.
However, Southern California continues to struggle to attain National Ambient Air Quality Standards (NAAQS) for ozone and fine particulate matter. To address this issue, the Southern California Air Quality Management District recently approved a new Air Quality Management Plan (AQMP) which is estimated to result in $15.7 billion in incremental costs between 2017 and 2031.
While various stakeholders have weighed in on the potential impacts of container fees, none appear to consider lessons from the actual market performance of the Ports of Los Angeles and Long Beach. From 2003 to 2016, their share of competitive traffic (i.e. Asia-Pacific imports to the US) fell from 75% to 67%. This coincided with a gradual increase in the cost differential between West Coast and all-water routes to East Coast ports, a portion of which is attributable to environmental initiatives implemented in Southern California.
To answer the question, this paper will analyze historical data on Asia-Pacific containerized import traffic and recent cost data to generate updated estimates of elasticity for Southern California port traffic. The paper will conclude by exploring the public policy implications for implementation of environmental programs.
DTCI Completes Regional Goods Movement Study for Halifax
Davies Transportation Consulting Inc. recently completed a Regional Goods Movement Scoping Study for Halifax Regional Municipality. The study was undertaken in the context of development of a new Integrated Mobility Plan which will expand the focus of regional transportation planning. The project team included James Frost of MariNova Consulting, Thomas McGuire of Group ATN and Steve Hayto of S5 Services.
The scope of the project included a literature review; analysis of case studies in North America, Europe and Australia/New Zealand; an overview of the Halifax goods movement system; and extensive consultations with commercial, public agency and community stakeholders to gather information on the goods movement system and identify issues. The majority identified port-related truck traffic in downtown Halifax as the major problem, with perceptions of traffic congestion, safety and environmental impacts. Previous related studies were reviewed, and priorities for future exploration of potential solutions were identified. Recommendations for integrating goods movements into regional transportation planning were also provided.
The consulting team reviewed the history of the rail line, reviewed the ASR’s track structure, estimated capital and operating costs to maintain rail operations, provided a high level assessment of net salvage value of the rail line, and undertook financial analysis of potential operating results for two acquisition cost scenarios. In addition, we provided advice on regulations governing rail line abandonment and options for determination of net salvage value; a review of obligations for the owner of a provincially regulated railway under the Alberta Railway Act, and commercial requirements from CN for concluding an operating agreement governing operations and commercial relationships between CN and the shortline operator; and a review of municipal involvement in shortline railways elsewhere in Canada, including key success factors. On the basis of this analysis, it was concluded that without substantially more rail traffic there is little probability that purchase of the line for the purposes of continuing rail operations would be commercially viable.
DTCI Completes Shipping and Logistics Study for Columbia Basin Trust
DTCI was engaged by the Columbia Basin Trust to conduct a Regional Shipping and Logistics Analysis to identify constraints and challenges to efficient logistics operations and make recommendations for improvements. The project was undertaken in collaboration with Darryl Anderson of Wave Point Consulting Ltd. and Steve Hayto of S5 Services.
The Columbia Basin Trust was created by the Columbia Basin Trust Act (British Columbia) in 1995 to benefit the region most adversely affected by the Columbia River Treaty (CRT), in the Canadian province of British Columbia. The Trust serves the region consisting of all the watersheds that flow into the Columbia River in Canada, encompassing 76,147 square km in the southeast corner of British Columbia, and extending north as far as Valemount on the Yellowhead Highway (Highway 16).
The project team undertook extensive consultations with businesses and other agencies within the Columbia Basin. An online Transportation and Logistics Survey of businesses was undertaken to gather information about their current shipping practices and challenges. Three hundred and eighteen businesses participated in the survey, providing a broad overview of the current state of freight logistics and the challenges facing firms in managing their supply chains.
Challenges to efficient logistics in the region include a relatively low population density, long distances from major urban centres, and mountainous terrain and variable climate. The results of the analysis and the survey findings strongly suggest that existing businesses have aligned their operations to the strengths of the transport and logistics system that serves the region. Among those businesses that have developed a strategy, shippers employ a variety of best practices such as consolidating shipments to reduce transportation costs, collaborating with other shippers, bulk purchases from a single supplier, the use of freight brokers to obtain lower rates, warehousing, and other solutions. In general, the transport and logistics system was not found to unduly restrict businesses’ ability to scale their operations and growth.
Specific areas for improvement were identified, including cold chain logistics and courier services and recommendations for potential initiatives for improvements in regional logistics services were provided. The full study report is available on the Columbia Basin trust website.