BC’s Trucking Industry - Costs of Congestion

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Overview of the goods movement and trucking industry in BC. Also, information on congestion in Metro Vancouver.

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  • Good evening everyone.My name is Greg Kolesniak. I’m a policy analyst with the BC Trucking Association. I’ve been with the association for 3 years now, so I’m still considered to be “newbie” and am still very much in “learning mode.”By way of background, I’ll start my presentation by giving you a very brief overview of BC’s trucking industry and its importance to BC’s economy.I will then move onto the main topic in today’s presentation – the costs of congestion in Metro Vancouver, which is a pressing issue not only for the trucking industry, but also all other road users.
  • The Trucking Industry plays a significant role in BC’s economy. Trucking plays a critical role in every step of the supply chain – so much so that if you bought it, there is a good chance that a truck brought it.In terms of a direct contribution to BC’s economy, for-hire trucking alone was a $1.9 billion industry in 2009. Private trucking contributed another $2 billion bringing the industry’s total share of GDP to 2.6 percent.This may not seem very impressive at first glance, until you consider the economic contribution other major industrial sectors. For example, Mining and Oil and Gas Extraction accounted for 2.8 percent of GDP, Forestry and Logging for 1.3 percent, and Residential and Non-residential building construction for 2.9 percent of GDP. In terms of BC’s economy, these are all heavy hitters, and incidentally, dependent on the trucking industry.
  • The Trucking Industry is also a major employer. According to the Canadian Labour Force Survey, truck driver is the leading occupation among males in Canada and is also the first point of entry into the labour market for many new Canadians. Over 30,000 British Columbians were directly employed in the for-hire segment of the industry in 2006. Company drivers and owner operators accounted for 70 percent of this total. Unfortunately, I couldn’t find readily available data for private trucking. All else being equal, you can probably double the figure for for-hire trucking to get a reasonable estimate for total employment in the trucking industry.
  • Trucking Industry Composition in BCThe main reason why I want to touch on the trucking industry’s composition is to illustrate one point:It’s a diverse industry and there are very few “one-size-fits all” solutions.A couple of quick definitions:>>>Enter- A for-hire carrier is a company that transports cargo belonging to others and derives most of its revenue from this service. (e.g., Canadian Freightways)A private carrier is a company that transports its own cargo, usually as part of a business that produces, uses, sells and/or buys the cargo being transported. (e.g., Wal-Mart Transportation LLC)>>>EnterThere were 10,307 for-hire trucking companies in BC in 2007. The total number of business establishments including private carriers came to just over 17,000. Most trucking companies in BC are very small – 88 percent operate 5 or fewer vehicles. 57 percent operate one vehicle, with the majority falling under the definition of owner-operators in the for-hire segment of the industry. The 17,000 establishments operated approximately 57,000 heavy commercial vehicles in BC in 2007. These include various vehicle configurations ranging from straight trucks, tractor-trailers, multi-trailer combinations such as B-Trains. There are approximately 22,000 HCVs in Metro Vancouver.(Definition of a Heavy Commercial Vehicle = straight trucks and tractor-trailers weighing more than 11,794 kg).
  • In addition to the distinction between for-hire and private carriers, the trucking industry is also made up of a number of sub-sectors. These include:>>>EnterGeneral Freight Trucking, which is subdivided into Truck-Load and Less-Than-Truck-Load carriersUsed Household and Office Goods MovingIntermodal TruckingBulk-Materials TruckingLog and Forestry Products Trucking (including finished lumber, wood chips, and logs)Specialized Trucking (such as heavy haul and over-dimensional loads)…and the list goes on>>>EnterThese are then in turn further subdivided into local versus long-haul trucking. As you can see, the trucking industry is composed of a diverse set of establishments, each facing its own unique set of operational requirements and challenges. This diversity can be very challenging when it comes to designing and implementing policy. There are very few “one-size-fits all” solutions.For example, a large for-hire carrier that primarily transports general freight locally operates in a different environment than a small private long-haul carrier that transports dry-bulk materials.
  • Challenge # 1 – Tax BurdenThe annual tax payable (net of input tax credits for the HST) comes to $21,800 per year for a typical tractor trailer configuration (a tanker truck in this particular case). This does not include municipal property taxes, payroll taxes, and corporate income taxes.Motor Fuel Taxes account for the vast majority of this tax bill ($19,501). Assumption:Average fuel consumption of 42.6 litres/100 km, 160,000 km per year, 50% travel in Metro Vancouver and 50% in the rest of the province.
  • BC’s Trucking Industry - Costs of Congestion

    1. 1. BC’s Trucking Industry Costs of Congestion
    2. 2. The Greening of the Motor Transport Industry Outline 21/30/2015 South Fraser OnTrax Presentation 1. Trucking Industry and BC’s Economy 2. Composition of BC’s Trucking Industry 3. Congestion in Metro Vancouver
    3. 3. The Greening of the Motor Transport Industry Trucking Industry & BC’s Economy 31/30/2015 South Fraser OnTrax Presentation
    4. 4. The Greening of the Motor Transport Industry Trucking Industry & BC’s Economy 41/30/2015 South Fraser OnTrax Presentation Employment in BC’s Trucking Industry Transport Canada, 2006
    5. 5. The Greening of the Motor Transport Industry Trucking Industry Composition 51/30/2015 South Fraser OnTrax Presentation •For-hire Carrier – transports cargo belonging to others •Private Carrier – transports own cargo
    6. 6. The Greening of the Motor Transport Industry Trucking Industry Composition 61/30/2015 South Fraser OnTrax Presentation Local vs. Long-haul For-hire vs. Private General Freight Trucking (Truck-Load or Less-Than -Truck -Load) Used Household and Office Goods Moving Intermodal Trucking/Container Drayage Bulk Materials Trucking (Liquid or Dry-bulk) Log and Forestry Products Trucking Specialized Freight Trucking
    7. 7. The Greening of the Motor Transport Industry 71/30/2015 Costs of Congestion in Metro Vancouver South Fraser OnTrax Presentation
    8. 8. The Greening of the Motor Transport Industry 81/30/2015 Quantifying the Costs of Congestion • Not an exact science • Complicated • “Ball-Park” estimates • Inter-jurisdictional comparison problematic • No time series data to enable intra- jurisdictional comparison over time South Fraser OnTrax Presentation
    9. 9. The Greening of the Motor Transport Industry 91/30/2015 What is Congestion? • Transport Canada Definition: – “Congestion is the inconvenience that travelers impose on each other while using their vehicles and attempting to use the road network at the same time, because of the relationship that exists between traffic density and speed (with due consideration of capacity).” South Fraser OnTrax Presentation
    10. 10. The Greening of the Motor Transport Industry 101/30/2015 Costs of Congestion • Internal Costs (Private) • External Costs (Other transport users and those not using the road network) • Social Costs (All Internal + External Costs) South Fraser OnTrax Presentation
    11. 11. The Greening of the Motor Transport Industry 111/30/2015 Recurrent vs. Non-Recurrent Congestion • Recurrent = Predictable • Non-recurrent = Random South Fraser OnTrax Presentation
    12. 12. The Greening of the Motor Transport Industry 121/30/2015 Quantifying the costs • Recurrent Congestion – The Cost of Urban Congestion, Full Cost Investigation (TC, 2006) • Non-recurrent Congestion – Costs of Non-Recurrent Congestion in Canada, Full Cost Investigation, (TC, 2006) South Fraser OnTrax Presentation
    13. 13. The Greening of the Motor Transport Industry 131/30/2015 Annual Costs of Congestion, Metro Vancouver, $ Millions (2007 = 100) 50% 60% 70% Cost of Congestion (TC) $921 $1,155 $1,345 Recurrent $479 $616 $746 Time delay* $406 $519 $636 Wasted Fuel $67 $90 $101 GHGs $6 $8 $9 Non-recurrent $442 $539 $598 Time delay* $374 $464 $525 Wasted Fuel $62 $70 $67 GHGs $6 $6 $6 Commercial Trucks (1996)* ← $595 → Cost of Congestion (TC + Commercial Trucks)** $1,516 $1,751 $1,940 Sources & Notes: Transport Canada (2006). Costs of Non-recurrent Congestion in Canada Transport Canada (2006). Costs of Urban Congestion in Canada * Expressed in 2007 dollars. CPI (BC): 1996 = 84, 2000 = 87.4 Transport Canada valued GHG emissions at $36.10/tone of CO2e (2007 = 100) Litres of fuel wasted 50% 60% 70% Recurrent (Millions of Litres) 62.10 82.79 93.14 Non-recurrent (Millions of Litres) 56.92 64.68 62.10 Total (Millions of Litres) 119.02 147.48 155.24 GHG Emissions (tones of CO2e) Recurrent 158,965 211,953 238,448 Non-recurrent 145,718 165,589 158,965 Total 304,683 377,542 397,413 Threshold ** Results at the 60% threshold are consistent with a Transport Canada study conducted in Vancouver in 1999, which pegged total congestion costs at $0.92 billion to $1.72 billion (includes passenger cars and commercial trucks, 2007 = 100). The price of fuel was adjusted from $0.3865/litre (2002 =100) to $1.082/litre (2007 average pump price, regular unleaded) South Fraser OnTrax Presentation
    14. 14. The Greening of the Motor Transport Industry 141/30/2015 How can we reduce congestion? • Investment in road transportation infrastructure (PMH1, SFPR) • Transportation Demand Management (TDM) South Fraser OnTrax Presentation
    15. 15. The Greening of the Motor Transport Industry 151/30/2015 If you got it a truck brought it!
    16. 16. 1/30/2015 The Greening of the Motor Transport Industry 16
    17. 17. The Greening of the Motor Transport Industry Trucking Industry & BC’s Economy 171/30/2015 South Fraser OnTrax Presentation Annual Tax Payable for a Typical Tractor/Trailer
    18. 18. The Greening of the Motor Transport Industry 181/30/2015 A closer look at GHG emissions • BC GHG Inventory (2005) – 66,051,000 tones CO2e – 25,839,000 tones CO2e (39.1 percent) emitted by transportation sources including on-road, off-road, rail, domestic marine, and domestic aviation. – Light duty and heavy duty vehicles (on-road transportation) emitted 15,544,000 tones of CO2e (23.5 percent) . • 377, 542 tons of CO2e attributed to congestion represents: – 2.4 percent of GHG emissions from on-road transportation sources – 1.5 percent of GHG emissions from all transportation sources – 0.6 percent of BC’s total GHG inventory South Fraser OnTrax Presentation

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