Id like to thank the CTRF for the invitation to speak with you today.

REVOLUTION can be defined as:
a) Orbital motion about a point.
b) A turning or rotational motion about an axis.
c) A single complete cycle of such orbital or axial motion.
d) The overthrow of one government and its replacement with another.
e) A time of major crustal deformation, when folds and faults are formed
f) A sudden or momentous change

Clearly we are here to discuss the latter and I am relieved that in choosing one of these definitions, my choice fits with the moderators opening comments.

There have been several great revolutions in transportation that have been immortalized throughout the centuries. Many of them have gone unrecognized or have been wrongly attributed: e.g. The Wright Bros. were not the first to take to the sky in powered flight. This honour belongs to a New Zealander who flew approx 1 week before the Wright Bros. His flight is largely ignored by non-New Zealand historians as he crashed into a bush on landing. The Wright Bros achievement was in powered landing, not in powered flying!

The unknown Arab who invented the lateen sail, thereby allowing sailing vessels to sail against the wind and created the great trade between Egypt and India for cottons and silks, precious metals and gems etc

The worlds first purpose built container vessel was built in North Vancouver in May 1955. Called the Clifford J. Rogers, she belonged to the White Pass and Yukon and traded from Vancouver to Alaska carrying amongst other things Containers, it would be another year before Sealand, who claim the title, converted the tanker Ideal X to carry containers. These examples are truly revolutionary and caused far reaching changes.

The Port of Vancouver is poised on the edge of a very large expansion in all sectors of its business. But none so great as the opportunity that exists in the container or intermodal sector. It is widely believed that by 2020 the three major ports on the West Coast of Canada could be handling 6.3 million TEUs, almost 4 times the volumes that are being carried today. Even with Prince Rupert joining Vancouver and Fraserport as container ports, we cannot handle all this volume with todays port, road and rail infrastructure and unless we change our thinking about how and what we operate, the system will collapse. The United States is closer to the end point than we are in Canada, it is estimated that by the year 2007 the Los Angeles/Long Beach ports will have reached their capacity with no room to expand further.

It is important to realize the difference between Capacity and Congestion. Capacity is what a system can carry consistently over a sustained period. Congestion is a temporary lack of capacity caused by over stressing the system periodically.

Pressures are mounting on our transportation systems in Canada, due in part to the increasing population in our major urban centers, the relatively cheap cost to import consumer goods manufactured in other areas of the world, in the rising demand for Canadian natural resources that need to be exported to feed these manufacturing processes . And because Canada offers the most direct and efficient gateways into North America and overall, the cheapest transportation systems for the users.

So what is the next great Transport Revolution? Im sorry to report to this body that my belief is it will not be Revolution but rather an Evolution, as we instill changes to what we do today. Unless the system of today becomes more co-ordinated, efficient, and less costly to operate it will surely fail us all. So what are these changes and what can be done to ensure their implementation.?

I believe that transportation will be the next great growth industry in our country. Today we have a Minister of Transport who views Transportation as a system, not as individual elements and who believes that Governments job is to provide the necessary regimes to allow the industry to achieve this goal. I believe that it will be changes in the operating practices, implementing new efficiencies and the introduction of better technology and equipment that currently move goods in this country. I believe it will be in the way that we provide and finance infrastructure, and I believe that it will be in the legislation that governs transportation in all forms in Canada.

Firstly Id like to discuss Operating Practices
In 1999, the port of Vancouver suffered truck line ups at our container terminals. Some of these lines were 3 to 4 km long and drivers were waiting 2-3 hours to get turned around. Because of the delays, truck companies. added more trucks to move the same number of containers, thereby adding to the waiting times. Paid per round trip, it did not take the drivers long to protest the practise of first come, first served. Out of the ensuing three week stoppage came the appointment system that revolutionized our gate moves. Internet based, the system issues appointments to control the arrival of trucks at our gates. Trucks now arrive, conduct their transaction and leave the terminal in about 30 minutes. Pre stoppage, we had about 600-650 moves per day. Post stoppage we now handle around 1650 per day. A technology revolution which for a comparatively low expense provided for a large return.

The two National Rail Carriers used to operate on their own tracks through the Fraser Canyon. By introducing what they call co-production, basically running on each others infrastructure, they have been able to increase the capacity of the Fraser Canyon by more than 100%. Similar studies are underway in Vancouver just now testing if this would increase the capacity of the rail system on the south shore. Indications are that there could be a significant increase in capacity for a very low investment. If successful then I am sure it will lead to other areas where these large increases in capacity can be realized.

The national rail system in Canada is now privatized and publicly traded on the stock market. Shareholder value has become paramount and they are changing the way they do business in an effort to cut their operating expenses wherever possible. New ways of delivering their services hold great promise. Not every container has to be immediately shipped to its destination. A delay of a day or so may be acceptable to some of their customers whereas others may want priority service. Paying more for Priority service is not new, Canadians have been used to this system since 1979, largely without complaint and have universally accepted it. We call this system Express Post in our mail and Courier companies call it Rush or similar throughout the world. It is believed that using a priority system to move the nations rail intermodal traffic, would smooth out the peaks and could increase the capacity of our network in and out of Vancouver in excess of 10 years.


What about Efficiency?

The enemy of throughput is dwell time. The longer the cargo sits on the terminals the greater the reduction in throughput. Today, the information that is required to reduce dwell time and increase terminal capacity is there. The problem is it is not shared in a way that contributes to the efficiency of the system. Each link in the chain has evolved and like any chain where one link only has a relationship with two others, in many cases that is as far as the information regarding their cargo has been broadcast. To the party who is sending me the cargo and to the one I am passing it on to.

It may seem self evident, but what would happen if the ship docked with every box on board cleared at origin for security, every box on board cleared at origin by Customs, the correct rail car was there, empty and available, or in the case of road traffic, the truck was under the hook and the goods, pre-cleared because of information flow, could be delivered to the recipient 24 hours of every day 365 days per year? Dwell time would be drastically reduced.

This was tested recently in a Port in the US, in a field exercise called the Agile Port the results of which will be released next month show a remarkable increase in throughput. One measure of throughput is the number of containers per acre per annum. Current practice in the port concerned is measured about 3500/acre/year. The test results show that given optimum conditions the throughput of that terminal could be raised in excess of 25,000/acre/annum. A seven fold increase. This as I said would be the optimum. It depends on the route, it depends on where the port is in the ships rotation, everyone being at the right place at EXACTLY the right time and that requires everyone involved to be aware of all the information that they need to achieve this. This of course is where technology comes in. It would be Utopian to expect these types of results on a constant basis but lets assume you might double or triple your throughput. And all of this for no, absolutely no capital expenditure. Let me emphasize that point. It will require no capital spending to achieve these goals. In the case of Vancouver we could delay a billion dollar investment by anything up to 15 years. Maybe that does fit into our definition of Revolutionary.

Today at the port of Vancouver we have the Pacific Gateway Portal. An internet based information system for industry to use to move information where it is required faster and more efficiently. Operating now for two years it is still being expanded and refined to ensure all stakeholders in our port get the information they need.

I mentioned Legislation that governs transportation. In the case of the port authorities it is the Canada Marine Act.
The review was conducted two years ago this month. The report has been with the Department of Transport for 14 months and as yet we are still hearing that the Department is studying the implications Without some of the changes recommended by the Panel, the port system in this country will lose to our competitors in the US. Which will mean a loss in jobs and a loss to the national economy. There needs to be a realization by our legislators, that public investment in infrastructure is an investment in the future of this country. It creates jobs, pays for health care and pensions, and adds wealth to the economy and of course pays back the investment through taxation many times over. The railroads in Canada must depreciate their investments over 20 years, but their competition in the US can do it in 12. We need a thorough review of our transport legislation with a view to making it operate cheaper and more effectively. Not, how can the Government get more revenue from it.

However, I believe the most important thing that this country needs is a clear Transportation Policy that would enable the industry. It must contain defined objectives and targets and provide for incentives for those who meet and exceed those targets.

Our Federal Government will not allow preferred rate investment instruments to be issued by the ports. Commonly known as tax exempt bonds, which our competitors to the south issue and use the capital raised to build infrastructure. One argument is that we do not have a policy do this in Canada. Well lets create one. And would someone explain to me how the Canadian film industry had such an opportunity if there was no policy? Clearly many sectors of Government have to understand that Transportation is not a part of the economy, it is one of the fundamental underpinnings of the economy of a nation that was built on its ability to trade and move goods from the centre of this country to tidewater on both coasts.

Education about the value of our industry must be the principal focus of all of us in transportation. We need to educate our legislators, our public and the people within the industry that there are better ways to achieve what must be done.

In conclusion, I want to tell you Ive changed my opinion, I believe that there indeed will be a revolution in transportation. It will not be in space age transporters, it will not be in larger vessels or magnetic levitation trucks and trains. It will be in the minds of longshoremen, legislators, shipping Executives, educators and of everyone in the industry that all these things are possible if we have the same goal, to make the Canadian transportation system the best in the world.

Thank you for the opportunity to speak to you today.


For more information, please contact:

Anne McMullin,
Director, Corporate Communications and Public Affairs
Vancouver Port Authority
(604) 665-9069 (office)
(604) 665-9073 (fax)
(604) 218-1403 (cellular)
anne.mcmullin@portvancouver.com

For more information:
For more information on any of these stories, call 1-888 PORTVAN.
Or, send an email to:
public_affairs@portvancouver.com