The 286 page Canada Transportation Act Review known as the Emerson Report tabled in the House of Commons on February 25th is a far ranging, thought provoking voyage along Canada’s transportation system from our early days long ago to thirty years into the future. The Report hasn’t received much attention yet from the press, except for last week’s Hill Times Events Transportation Forum; perhaps because our national transportation system is working and there are so many other critical issues that need immediate attention. Nonetheless, over the next months we hope to have more blogs and comments on various aspects of the Report because one underlying theme comes through loud and clear. Canada’s economic prosperity is tied to international trade and our international trade is inextricably linked with our national transportation systems. Following are some notes prepared for the Hill Times Transportation Forum, a public policy think tank where professionals, pundits and policy wonks discussed just a few aspects of the Report.
Global Hub Strategy
It its written submission to the CTA Review in January 2015, CIFFA called for the creation of Canada as a ‘transit hub’. What the Report calls a ‘Global Hub Strategy’ will help bring options and opportunities that Canadians need to win in this highly competitive international trade arena.
In its recommendations for a Global Hub Strategy, the Report emphasises the benefits that will accrue to air passengers. Freight forwarders – or global logistics service providers – are all about moving goods – into, out of and through Canada. But you have to remember that the movement of goods is linked, particularly in the air mode, to the movement of people. We have some freighters but generally our international air cargo moves in the bellies of passenger aircraft. And so the Report’s far-reaching recommendations to improve the international and transit passenger experience – and cost – can only support similar opportunities for improved performance for air cargo.
I was in Hong Kong last November, speaking with a local HKG trader who the previous week had moved a 10 tonne shipment by air from Hong Kong to Brazil. He was a little surprised when I was said, “Tell me you used Air Canada over Toronto or Vancouver” and I was pleased when he responded ‘Why yes we did.’ That routing isn’t one that springs naturally to anyone’s mind – unless, of course, you are a Canadian international freight forwarder – but IF we want to have the options, if we want to have the carriers, if we want to have choice – we have to have the transit cargo and the transit airlines through Canada.
The Report mentions that in 2005 airlines carrying passengers through Canada for travel between South America and Asia had a 4 percent share. By 2013, it had dropped to 2 percent. That’s a shame because every transit air passenger and every transit kilo brings jobs and economic benefit to Canada.
The Report s emphasizes – and rightly so – that higher volumes of travellers and freight lowers costs and creates opportunities in other sectors, and transit traffic can increase airline volumes by 25‐50%. Our domestic markets are small and we need the options / carrier selections. Like the Air China Cargo freighter that flies Shanghai, Edmonton, Dallas three times a week, carrying transit cargos as well as Canadian origin and destination cargoes. It is good for everybody – including Vancouver’s cherry exporters who may access that capacity during peak season for their produce.
While the Report talks to the need for a Global Hub Strategy for the air passenger industry, it doesn’t however, continue that discussion to include the development of a global hub – or as we say transit hub – for Canada’s critical maritime trade. When a carrier calls at Prince Rupert or the Port of Montreal or Halifax to pick up and drop off containers from or to the US mid-west every Canadian shipper benefits. We have more options of carrier selection, frequency of calling and routing to get our precious exports to market.
Look at Prince Rupert. Ten years ago there was nothing going on in the intermodal business. When the new terminal opened in 2007, the original capacity was 500,000 TEU. Today, effective management, productivity gains and an efficient workforce have seen throughput grow to 776,412 TEU in 2015 and construction has already begun on the expansion which will bring 1.3 million TEU capacity by mid-2017. That port was built on US transit cargo and it will be successful on US transit cargo.
Like any good system, there are many layers and considerable inter-connectivity in Canada’s complex transportation system. Recommendations to support the National Framework on Transportation and Logistics, the Advisory Committee and the Projects Pipeline will be critical over the next 30 years.
Take one example. CN’s Milton Logistics Hub is sorely needed to reduce congestion around the GTA and it would support transit cargo to and from the USA, particularly over Canada’s East Coast ports. One hopes that the development of the recommended Projects Pipeline, ‘in collaboration with provinces and industry – and one might add municipalities – would bring to government the focus – dare I say the will to ensure effective / efficient/ timely delivery of similar, private sector, infrastructure investments in the future.
Integrated Data Pipeline and Multimodal Data Dashboard
A couple of times in the Report there are references to a fragmented approach by the Government of Canada, citing various gaps and redundancies. I would hope that the National Transportation Framework and the Advisory Committee will be all-encompassing – particularly at the federal level and that the Integrated Data Pipeline and Multimodal Data Dashboard are deployed across all government agencies and divisions.
For example, the collection of security related Advance Commercial Information in both air and marine modes has to be aligned with the United States’ data collection and cannot create any barriers to cargo transiting Canada – or remaining on board a vessel or aircraft that visits a Canadian port.
The CBSA’s eManifest or “Advanced Commercial Information’ strategies have to support in-transit cargos and make it easy for foreign and US shippers and freight forwarders to choose routings that transit Prince Rupert or Montreal or Vancouver for their US or South America or Asian or European originating or destined cargo. Because if there is even a hint that regulatory compliance will be more burdensome than shipping cargo over a US port or airport – don’t kid yourself, the cargo will flow, just like water, through the path of least resistance.