1 INTRODUCTION AND CONTEXT

Transcription

1 Input Consideration Memo 1 INTRODUCTION AND CONTEXT Port Metro Vancouver is Canada s largest and busiest port, a dynamic gateway for domestic and international trade and tourism, and a major economic force that strengthens the Canadian economy. Port Metro Vancouver s vision is to be recognized as a world class Gateway by efficiently and sustainably connecting Canada with the global economy, inspiring support from our customers and from communities locally and across the nation. A key goal in support of that vision is to be a world leader in supply chain competitiveness and sustainability. Since 2012, Port Metro Vancouver has been working with industry partners to implement changes to the Truck Licensing System (TLS) that would address key concerns in the local drayage sector, some of which date back to the late 1990s. Port Metro Vancouver's TLS reform was designed to enable a number of key outcomes and operating principles established as part of the Smart Fleet Trucking Strategy. These changes are intended to deliver long-term stability to the drayage sector with fewer local drayage trucks and more efficient, financially invested trucking companies. The local drayage component of Port Metro Vancouver s new TLS program came into effect in February The local drayage component of the TLS program was developed based on consultation undertaken in the spring and fall 2014, which included participation from some long haul operators. An additional phase of consultation on the long haul component of the TLS program was conducted in October 2015 and focused on aspects of TLS reform that are particularly relevant to long haul operators, including the definition of a long haul container move, a proposed balanced scorecard, and some specific elements of the long haul Access Agreement. 2 LONG HAUL TLS STAKEHOLDER CONSULTATION In October 2015, following discussions with the Province of British Columbia and the British Columbia Container Trucking Commissioner, Port Metro Vancouver undertook a consultation program to seek input from the trucking community in support of developing the long haul component of the new TLS program. CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 1 of 14

2 Consultation activities included: Discussion guide highlighting the proposed long haul TLS program, including the draft definition of long haul, the proposed Balanced Scorecard and key elements of the new Access Agreement Facilitated discussion session with the long haul operators currently accessing Port Metro Vancouver marine container terminals (webinar component for those unable to attend in person) submissions to receive additional input from the broader trucking community Consultation notification included: Invitation letter sent by to long haul operators and other key drayage sector stakeholders notice to Port Metro Vancouver s TLS list Sixteen long haul companies and the BC Trucking Association participated through a consultation meeting and feedback. Three local TLS companies, the BC Trucking Association and one company that previously participated in the local TLS program provided written feedback. 3 RESPONSE TO STAKEHOLDER INPUT 3.1 Summary of Key Changes As a result of feedback provided, Port Metro Vancouver has made the following changes to the long haul TLS program: Revised definition of long haul (see next page) to address unintended potential consequences associated with the draft definition including: Provision for use of a team of two drivers, with certain conditions Clarifying the definition of container, consistent with the B.C. Container Trucking Act Provisions for inspection by a designated government/enforcement representative Commitment to work with the marine container terminal operators with the intent to establish increased appointment flexibility for long haul trucking companies. Productive discussions are underway and Port Metro Vancouver anticipates introducing this increased flexibility on or before February 1, 2016 when the new long haul TLS takes effect. CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 2 of 14

3 Elimination of planning for the Balanced Scorecard for long haul operators at this time; Port Metro Vancouver will continue to implement the Balanced Scorecard for local TLS and may revisit for long haul operators in the future Minor changes to the damage deposit charge as part of the Access Agreement, which results in a reduction for some operators 3.2 New Definition of Long Haul Port Metro Vancouver will adopt the following definition when the new long haul TLS program is implemented in 2016 (key changes noted in bold): The direct transportation from a Marine Container Terminal to a point beyond the Lower Mainland or vice versa, of a specific marine container, (as defined under the Container Trucking Act, SBC 2014, chapter 28, (the Container Trucking Act ), and its undisturbed, originally sealed content, (save for inspection by CBSA agent or officer), using the same driver or the same team of two drivers, (both of whom travelled with the container from a point beyond the Lower Mainland), whose method of remuneration remains consistent during all movement of the container from the originating location of the move to arrival at the marine terminal, and excludes any movement of a container which is subject to the Container Trucking Act. 3.3 Detailed Response to Input Received The following table provides a comprehensive response to feedback, as summarized in the Consultation Report, which is available under separate cover. For consistency, topics are discussed in the same order that they were presented during consultation and summarized in the Consultation Report. Responses reflect Port Metro Vancouver s consideration of consultation input from all stakeholders, along with ongoing technical and financial analysis. Definition of long haul New definition suggestions Long haul is: the direct transport of a laden or empty marine container directly between the Port of Vancouver to a point beyond the Lower Mainland or vice versa. The Lower Mainland is defined to be the area, which extends from Horseshoe Bay BC, South to Port Metro Vancouver s new definition above clarifies that transportation of goods or items not within a container as defined by the Container Trucking Act is not subject to the new long haul TLS. Existing access procedures for these CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 3 of 14

4 the Canada/ US border and East to the boundary of Hope BC. The point of origin of an Export and the final point of destination of an Import laden marine container determine the definition of Long Haul for TLS purposes. Long Haul containers must be moved undisturbed in the original container, using a driver whose method of remuneration remains unchanged throughout the entire trip and excludes any movement of a container which is subject to the Container Trucking Act, SBC 2014, chapter 28. Changes to original definition: laden or empty marine container specific marine container Explicit definition of Lower Mainland Added The point of origin of an Export and the final point of destination of an Import laden marine container determine the definition of Long Haul for TLS purposes. types of deliveries (e.g. flat racks) will continue to apply. The definition of Lower Mainland is as set out in the Container Trucking Act. Adding final point of destination may create confusion, as it could potentially be interpreted as allowing for an indefinite interim stop within the Lower Mainland. However, such a stop would likely render the remaining leg of the trip subject to the Container Trucking Act provisions. A long haul company is one whose moves involve the transportation of marine containers whose contents remain sealed and undisturbed except by officials who are authorized to examine their contents) from a marine container terminal to a point beyond the Lower Mainland or vice-versa. To the extent that these moves are not Allowance for examination by authorized officials has been incorporated into the new definition. Port Metro Vancouver appreciates that in some instances, a container movement is not direct. However, the definition is designed to avoid contravention of the CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 4 of 14

5 direct is due to circumstances outside the control of the long haul company. Drivers involved in the transportation of these containers are all employees or owneroperators of the company. Changes to original definition: undisturbed except by officials who are authorized to examine their contents To the extent that these moves are not direct is due to circumstances outside the control of the long haul company. Drivers involved in the transportation of these containers are all employees or owner-operators of the company. Container Trucking Act. Some non-direct movements that stop in the Lower Mainland may be within the scope of the Container Trucking Act irrespective of whether the stoppage or change in direction is within the control of the long haul operator. In these instances, to avoid contravening the Container Trucking Act, the long haul operator may elect to contract with a holder of a B.C. Licence. The proposed definition of drivers is not relevant except with respect to method of remuneration, which is discussed below. Add a Long Haul Access clause to the B.C. Container Trucking Act, setting out the special conditions that are faced by the long haul industry. Port Metro Vancouver met with the Province and the Commissioner to discuss the feedback received. We believe the long haul definition changes (see above) address many of the concerns identified. We will monitor the long haul TLS program, once implemented, and make recommendations to the Commissioner as appropriate. We encourage operators to continue advising us about any issues or additional concerns that may arise. CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 5 of 14

6 Beyond the Lower Mainland General support for this part of the definition. No changes to this part of the definition. Lower Mainland is as defined in the Container Trucking Act. Specific and undisturbed marine container Same driver Strong agreement by everyone, with suggestion to adjust definition to include unless opened by enforcement official, or similar phrase. Low support for the same driver requirement as it s not always possible to use the same driver for the entire trip. Participants noted that team drivers are commonly used in long haul operations and recommended that the definition be modified to allow for using a highway driver and local driver pick-up/ drop-off, as long as all are drivers for the same company. Port Metro Vancouver has adjusted the definition to include save for inspection by CBSA agent or officer. Using a local driver for the local leg of a trip would be an indication that that trip is not direct, but is a local trip and is subject to the Container Trucking Act provisions, (including the requirement for a B.C. Licence). Port Metro Vancouver has adjusted the definition of long haul to allow for the same team of two drivers, (both of whom travelled with the container from a point beyond the Lower Mainland). CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 6 of 14

7 Flat Racks Suggestion that flat racks be exempt from the BC Container Trucking Act and/or that the definition of long haul be modified to standard marine container. Movement of oversized cargo via flat racks often requires specialized loading and/or transportation equipment. The containers used to accommodate the movement of oversized cargo would likely not be captured by the Container Trucking Act definition of a container. Existing exemption access procedures for these types of deliveries to or from Port Metro Vancouver terminals will continue to apply. Reservations Questions about why reservations are required for long haul (new since 2015) and recommendation that long haul carriers be exempt from reservation requirement, and/or allow a bypass system in consideration of delays outside of the operators control such as unpredictability at the border crossings. Difficult to book a reservation that coincides with arrival in the Lower Mainland. Request for special considerations for appointments and scheduling for flat racks and all over dimension shipments. Marine container terminals, not Port Metro Vancouver, set the reservation/ appointment system. In recognition of feedback from long haul operators, Port Metro Vancouver has initiated dialogue with marine container terminal operators to establish greater appointment flexibility for long haul operators, specifically to allow for delays outside of the operators control. The requirement for a reservation is an operational change for long haul and a new cost of doing business in the Lower Mainland that marine terminals developed to increase their operational efficiency. Port Metro Vancouver will monitor the effect of this change and continue to collaborate with marine CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 7 of 14

8 container terminals to further improve the entire supply chain, including recommending changes to the appointment system. Method of remuneration Low level of concern, but some suggestion that if all drivers are employees, it should not matter. Few long distance carriers compensate drivers with the same method of remuneration for the whole trip, including time spent waiting, loading or unloading at a marine container terminal. A common model for these drivers would be paid hourly for time spent waiting, loading, or unloading at a marine container terminal, and per km/mi for distance during driving time. The definition has been modified to make it clearer that additional remuneration or a differing method of calculating remuneration during loading or idle time is acceptable. However, paying a different rate or fee structure for the local portion of the trip movement would indicate a separate, local move that is subject to the Container Trucking Act. Balanced scorecard Balanced Scorecard Performance Standards Low level of interest in balanced scorecard for long haul, but no concerns about it being implemented, provided that it does not require a lot of additional work for the companies. General consensus that long haul companies are very different so comparisons would not be as applicable as for local companies. Port Metro Vancouver will implement the Balanced Scorecard for local carriers and not long haul at this time. CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 8 of 14

9 Access Agreement Annual Agreement charge General agreement that the charge is too high for long haul, given that most long haul carriers visit the Port infrequently (perception that the rate is unfairly high and not based on cost recovery). Many companies would prefer per diem charges to access Port (long haul does not access Port as often as local) and suggested a per load entry fee instead. Proposed cost of licensing is excessive in comparison to other ports in North America. This would cause the trucking company to apply for more licenses than it may actually need to logistically and legally be compliant with the same driver clause. Port Metro Vancouver is committed to operating an efficient and effective TLS program on a cost-recovery basis. Some fixed costs cannot be allocated on a per use basis. In the past, many of these costs and activities have been underfunded. Port Metro Vancouver provided flexibility for long haul operators by basing the charge on a low minimum number of trucks for entry (3 5 trucks), to keep the minimum required Access Agreement charge as low as possible, as compared with the minimum calculation threshold of 15 trucks for local TLS. Long haul operators who access the Port very infrequently also have the option to contract with a local carrier instead of entering into a long haul TLS Access Agreement. Damage deposit The damage deposit for a trucking company should be determined based on their safety record at the Port. In recognition of feedback, Port Metro Vancouver has reduced the minimum damage deposit to $1,125 for companies registering up to five trucks, then $225 per truck for any additional trucks up to a maximum of $10,000. CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 9 of 14

10 Damage deposits should not be required since Port Metro Vancouver has other means to secure payment if and when necessary. This is consistent with the approach for the local TLS but recognizes that most long haul operators access less frequently than local operators, which decreases the risk of damage by long haul trucks. Port Metro Vancouver had previously considered damage deposits based on safety record; however, not all damages relate to safety per se and as such, safety record alone was deemed an inappropriate measure. We are willing to consider varying, negotiated damage deposit amounts in future Access Agreements, reflecting an individual company s strong (or weak) compliance and safety records. General Managing Supply Suggestion that PMV not try to manage supply of the long haul container trucking sector through limiting the granting of licenses or related truck tags. Licenses should be issued to any long haul company that meets the license requirements. Licenses should not be required for trucking companies transporting out-of-gauge, flat rack or any other non-standard container that requires specialized equipment either for loading or unloading or face restricted Port Metro Vancouver does not intend to limit the number of long haul operators or long haul trucks accessing Lower Mainland marine container terminals at this time. The intent of the long haul TLS program is to help ensure consistent application of the requirements for all drayage companies, and to ensure that companies offered Port access via a commercial contract are treated as the important customers they are. CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 10 of 14

11 hours at marine container terminals. We could apply to have 20 licenses to the sum of approx $26,000 and have trucks situated all over NA and due to equipment availability be unable to access the Port. The structure doesn t always work if by truck. Port Metro Vancouver intends to offer Access Agreements initially to existing long haul operators. Following implementation (target Feb 2016), we will begin receiving and processing applications from new participants. All long haul TLS operators will have the option to contract with local TLS companies, which will help individual operators determine the optimum number of company trucks to include as part of their Access Agreement. Local Licenses Difficult for companies to operate using same driver for the entire trip. Either same driver requirement needs to be removed or would require a local license to continue serving customers, which are not available. Port Metro Vancouver s long haul licence has always expressly prohibited holders from participating in the local market. The new Access Agreement definition provides clarity about local vs. long haul moves. Reservations Recommendation to approach marine container terminals to eliminate the reservation requirement for long haul, given that wait time penalties intended to be paid to drivers of local companies. In recognition of feedback from long haul operators, Port Metro Vancouver is committed to working with marine container terminal operators to establish increased appointment flexibility for long haul operators for delays outside of the operators control. Local Carrier and Other Carriers Comments Local carriers comments Current TLS system should not change. If highway licenses or other licenses granted, As noted above, Port Metro Vancouver is working with marine container terminals CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 11 of 14

12 it would open the door to everything that caused the last disruption. No way to monitor highway traffic with accuracy, which opens the door to cheating and rate cutting. Highway Bypass protocols worked efficiently for all parties. Presently approved FSO Licensees that perform Local TLS, which also operate in the Long Haul sector should not be required to pre-qualify in the initial application process. Damage deposit should be same as local $10,000 for all. Companies seeking TLS long haul access should be required to meet the standards that were identified for locals, as well as provide a business case that supports the application for long haul access. to modify the appointment system to address delays outside of drayage operators control, while still increasing terminal efficiencies. Local TLS operators are not prohibited from making long haul moves and do not require a separate Access Agreement. However, local companies will need to be very careful to ensure that all local container moves are clearly separate from long haul moves and meet the Container Trucking Act requirements. The damage deposit for long haul access is consistent with the structure established for local TLS, while recognizing that the risk of some damages increases with frequency of visits. The long haul TLS framework was based on the framework established for local TLS, while recognizing some important differences. As the long haul market has not experienced the instabilities caused by over-supply, Port Metro Vancouver has no intent to restrict the number of long haul operators or trucks at this time. CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 12 of 14

13 Non local/long haul carrier As long as container remains undisturbed/sealed, do not see necessity of same driver being required to handle the entire trip. Difficult for larger fleets with diverse services to be able to logistically plan. To ensure compliance with the Container Trucking Act, any leg, or portion of a trip, that starts and ends in the Lower Mainland must be considered a local move and is subject to the conditions of the Act, including the requirement to hold a B.C. licence. Few long distance carriers compensate drivers with same method of remuneration for whole trips. If employees compensated based on union collective agreement, do not see necessity of requirement. Licensing fees are high considering one container trip could be in excess of 1 week. As long as the portion of the trip originates or ends outside of the Lower Mainland, and the drivers are paid the same way from point A to point B, additional pay at the terminal (e.g. a top up in addition to the hourly or per km rate that the other driver was paid) is at the discretion of individual companies and considered acceptable. However, paying a completely different rate or fee structure for the local portion of a move would be an indication that portion is actually a separate, local move and that is not acceptable. CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 13 of 14

14 4 NEXT STEPS Port Metro Vancouver thanks all consultation participants for their time and thoughtful input. We believe that the proposed final changes to the new long haul component of the TLS Program in response to the input we received best reflect the interests of all parties that rely on a successful and sustainable drayage sector. We anticipate releasing the final Long Haul TLS requirements, (including a copy of the Access Agreement) and application user guide late in the week of November 30, We will then begin receiving and processing applications in batches on a weekly basis to ensure a sufficient number of confirmed applications when the new long haul component of the TLS Policy comes into effect on February 1, Additionally, Port Metro Vancouver will continue to work with Lower Mainland marine container terminals to collaborate on opportunities to further improve the supply chain as part of our Smart Fleet program. CONSULTATION INPUT CONSIDERATION MEMO NOVEMBER 2015 PAGE 14 of 14