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TABLE OF CONTENTS
List of Exhibits
2)
attempted to contact and seek co-operation from between 150 and 200
trucking companies located from various directories, trucking associations
and websites. Of these firms, partial cost data -- primarily related to driver
wage levels but also including all cost components, if the carrier was
willing to discuss these was secured from 49 trucking businesses.
When one considers that this data is spread across 10 provinces and 2
territories, one can see that -- on average --the sampling is only 4 or 5
firms per region. (see prior discussion of sampling size).
3)
4)
11
every time that the study is updated -- by asking equipment suppliers and fleet
owners whether the assumed basic specifications remain "representative" of
what the majority of the industry is operating.1
The specifications that were used to guide our current discussion with equipment
suppliers were as follows.
Power Unit Configurations
For the regional case studies, cabs were assumed to be NOT sleeper equipped
(for purposes of estimating tare weight and purchase costs). For the longer
distance corridor cases consideration was given to additional costs (and weight)
to add to the basic power unit specifications to reflect a sleeper equipped power
unit.
While new EPA regulatory requirements were introduced in the 2007 model engines, it is too
early to determine the effects these changes have had on fuel economy and vehicle operating
costs, although early industry literature suggests these changes have been minimal (Truck news,
October 2007 Volume 27, Issue 10). While the technology added to the tractor to meet the
regulations weights several hundred pounds, there was little change reported by fleets in the
overall tare weight of their tractors.
12
Trailers for Five Axle, Six Axle and Eight Axle Super-B Operations
13
0 S.S. hose trays, spring suspension, steel disk wheels, 1 colour epoxy
finish, walkaround spill dam, curbside ladders, stainless steel fenders,
aluminium catwalk, single compartment. Trailer Tare Weight: 7,200 KG
14
insurance and operator margin have been allocated to the single vehicle based
on normal percentages for these cost components within trucking businesses in
Canada and the US. Effects of fleet size on unit costs will be discussed further
in Section 3.
Terminalling Productivity Assumptions
For developing truck operating costs as impacted by terminalling (load-unload)
productivity, truck equipment ownership costs during wait time are excluded from
analysis for the reason that the basic equipment utilization criteria, namely total
kilometres travelled annually, implicitly already accounts for these costs. In other
words, it is less feasible for an operator to realize a high number of kilometres
annually as the proportion of equipment time spent loading and unloading
increases.
Terminal productivity does directly influence driver wages and burden costs
because whether the drivers are physically involved in commodity handling, they
must be paid the representative hourly rate during the time involved for waiting to
be loaded or unloaded.
For this study, terminal handling performance is based on the following
parameters:
Dry Freight in Van Straight Trucks The time spent loading and unloading
freight was assumed to be 1 person hour per 1600 kg of consignment.
15
container chassis hauling evaluations where a time of 0.75 hours per trip was
applied in total for all loading and unloading activity.
We are also assuming that the only handling cost to the truck operator is the
wages and burden paid to the driver on duty during loading and unloading. The
handling facilities and manpower are considered not to be under the trucker's
management, or if so, that the costs for this operation are recovered against a
handling charge and not included in the trucking cost.
Intra Regional Base Case Trip Distances: The combination units are
assigned a round trip distance of 320 kilometres since they are assumed
to be involved in predominantly "terminal-to-terminal" highway service.
Urban two axle units are assigned a trip distance of 100 kms. These
common trip distances tend to reflect average common operational factors
within the industry -- recognizing there are shorter and longer distance
market segments, for specific operations.
City Pair Corridor Studies: Costs are developed for one way travel based
on practical route distances taken from PC*Miler. Numbers of one-way
trips annually, which reflect in annual distances travelled by units, reflect
3,000 working hours per unit divided by time required for a single one-way
trip.
These corridor operations are applied to the line haul combination units and not
to straight truck applications.
16
17
Driver Costs
Samples of 2007 hourly and distance base wage rates for drivers in regions were
obtained from:
Discussions with fleet operators in all the regions.
Reference to available collective bargaining results published in internet
references and trade publications.
Review of corporate web-sites, many of which publish driver
compensation information.
Review of newspaper classified advertisements and web-based driver
recruitment sites for carriers and driver pools.
Review of transportation and other wage statistics from Statistics Canada,
the US Department of Labor, Published Teamsters Wage Rates, and US
County and State Wage Survey Statistics.
Considering these sources, and in light of the driver wage database from the
prior study, Logistics Solution Builders developed our best estimate for average
driver wages applicable for the hauling cases in our study.
18
GENERAL COMMODITY
5-Axle
Vehicles
per hr
$
5-Axle
Vehicles
per km
cents
6-Axle
Vehicles
per hr
$
6-Axle
Vehicles
per km
cents
7/8-Axle
Vehicles
per hr
$
7/8-Axle
Vehicles
per km
cents
5-Axle
Vehicles
per hr
$
5-Axle
Vehicles
per km
cents
6-Axle
Vehicles
per hr
$
6-Axle
Vehicles
per km
cents
7/8-Axle
Vehicles
per hr
$
7/8-Axle
Vehicles
per km
cents
British Columbia
$21.50
28.58
$23.50
28.89
$25.00
29.21
$22.00
28.58
$24.00
28.89
$25.50
29.21
Alberta
$19.50
27.50
$21.50
28.35
$23.50
30.06
$20.00
27.50
$22.00
28.35
$24.00
30.06
Saskatchewan
$19.00
25.48
$20.50
26.10
$22.00
27.34
$19.50
25.48
$21.00
26.10
$22.50
27.34
Manitoba
$18.50
25.17
$20.00
25.79
$21.50
26.72
$19.00
25.17
$20.50
25.79
$22.00
26.72
Ontario
$19.50
26.10
$22.00
26.72
$24.00
27.34
$20.00
26.10
$22.50
26.72
$24.50
27.34
Quebec
$18.50
24.86
$20.00
25.48
$21.50
26.41
$19.00
24.86
$20.50
25.48
$22.00
26.41
New Brunswick
$15.25
21.13
$15.50
22.06
$16.25
23.92
$15.75
21.13
$16.25
22.06
$17.25
23.92
Nova Scotia
$15.25
21.13
$15.50
22.06
$16.25
23.92
$15.75
21.13
$16.25
22.06
$17.25
23.92
P.E.I.
$14.75
20.51
$15.00
21.59
$15.75
23.61
$15.25
20.51
$15.50
21.59
$16.50
23.61
Newfoundland
$16.00
22.06
$16.50
22.68
$16.75
24.23
$16.00
22.06
$16.50
22.68
$16.75
24.23
Yukon
$22.00
29.21
$23.00
30.14
$25.50
31.07
$22.50
29.83
$23.75
30.60
$26.25
31.69
N.W.T.
$20.00
27.50
$22.00
28.35
$24.00
30.06
$20.50
27.50
$22.50
28.35
$24.50
30.06
U.S. DRIVER WAGES FOR FIVE-AXLE SEMI CONFIGURATION (mid 2007) in Canadian $/hr and
cents/km
BULK COMMODITY
GENERAL COMMODITY
5-Axle
5-Axle
5-Axle
5-Axle
Vehicles
Vehicles Vehicles
Vehicles
per hr
per km
per hr
per km
$
cents
$
cents
U.S. North East (NY,NJ, Mass)
U.S. Great Lakes (Ill,Mich)
U.S. Midwest (Nebr,Kans,Okl)
U.S. South (Ark, Alab, Geo)
U.S. West. (Wash, Oreg, Calif)
$21.76
$21.76
$20.21
$19.08
$20.21
28.38
28.38
27.38
26.88
28.38
$23.38
$23.38
$21.93
$21.07
$21.93
30.05
30.05
29.39
28.38
30.05
Fuel Costs
Fuel costs are a result of the influence of distance travelled, vehicle fuel
consumption, and of course fuel prices. To support Operating Costs of Trucks
in Canada, Logistics Solution Builders maintains a database of realistic fuel
consumption rates for each case study hauling scenario. These are based on,
and updated with, consultation of fleet operators, discussions with distributors of
power units to the industry and review of published literature on fleet energy
management benchmarks and targets.
In relation to pricing, we reviewed average annual 2007 fleet discounted fuel
pricing in the most heavily populated areas of each region. Costs included
provincial and state tax as well as Canadian excise tax on fuels.
Price levels used in our study are on shown by Exhibit 2.4.
20
British Columbia
Est. Purchase
cents/litre
(with fuel taxes)
94. 9
Diesel
Tank Wagon
Provincial Fuel Tax Federal Fuel Tax
cents/litre
cents/litre
cents/litre
(without fuel taxes)
71. 9
15. 0
4
Alberta
86. 3
73. 3
9. 0
Saskatchewan
89. 5
70. 5
15. 0
Manitoba
85. 6
70. 1
11. 5
Ontario
84. 1
65. 8
14. 3
Quebec
86. 1
65. 9
16. 2
New Brunswick
86. 0
65. 1
16. 9
Nova Scotia
88. 7
69. 3
15. 4
P.E.I.
89. 0
64. 7
20. 3
Newfoundland
91. 6
71. 1
16. 5
Yukon
97. 6
86. 4
7. 2
N.W.T.
106. 5
93. 4
9. 1
3.101
81.9
3.085
81.5
3.085
81.5
3.042
80.4
3.278
86.6
Note US costs have been expressed in equivalent Canadian dollars based on the
average exchange rate, previously discussed.
21
Repair Costs
Repair costs used in our study represent expected costs of parts, lubricants, oil,
and labour associated with the maintenance and repair of the particular
equipment type. Our database on repair costs was updated in consultation with
equipment dealerships, fleet managers, and reference to US Bureau of
Commerce and Statistics Canada Industrial Price Indices.
We have assumed that repairs were undertaken under efficient shop
management and that a prudent preventive maintenance system was employed
that was compatible with equipment manufacturer recommended service
intervals, warranties and other best practices.
Cleaning Costs
The cost of cleaning tractors, flatdeck trailers and van freight trailers has minimal
effect on total operating costs.
Annual costs of cleaning bulk tanks vary with the type of commodity carried and
the quantity of different bulk commodities transported during the year. An
average of tank trailer cleaning costs was developed from discussions with
various bulk tank truck carriers as well as a review of prices charged at
commercial tank cleaning facilities.
Transport Costs
The transport cost category is a miscellaneous category to reflect all those
factors that may be attributed to extra equipment that are not normally viewed as
part of a vehicle's standard configuration. This may represent special pumps,
hoses, safety equipment, dunnage, small tools, chains, tarping, heaters* or
refrigeration* equipment. These costs will vary with area of operation and also
with the specific type of product hauled.
*Note: Starred items are not included for this analysis, but such items would
normally be included in the category transport costs, when evaluating these
specialized trucking applications.
Tire Costs
Tire unit costs in our database were updated by Logistics Solution Builders
through consultation with suppliers of tires, our knowledge base from prior
related fleet studies, and reference to industrial price indices published by
22
Statistics Canada and the US Bureau of Commerce. Actual in-service costs for
trucking tires are a reflection of the following factors:
Number of tires for the particular vehicle and cost of new tires purchased
in each region.
Life of a tire in each service application, considering road surface
conditions.
Cost of retreading, when retreading is desirable, and life of a retread tire
for each region.
Depreciation Costs
"Normal" depreciation is used based on the 2007 equipment purchase cost
obtained from dealer quotations. That is, one percent a month for trailers over a
trailer life of eight years and 79.2 percent for tractors over a tractor life of five
years. This assumption relates equipment write-off to current replacement cost
rather than an arbitrary "book value" determination. Equipment values used for
this study, inclusive of applicable provincial and state sales taxes, are tabulated
below.
Although this is not a detailed procurement study on the supply of highway
tractors to the industry, when compared to similar cost estimates used in the prior
2005 study, it would appear that the shift in Canadian currency versus U.S.
currency has moderated equipment purchase costs somewhat for truck
operators.
23
B.C.
Alberta
Saskatchewan
Manitoba
Ontario
Quebec
New Brunswick
Nova Scotia
P.E.I.
Nfld
Y.T.
NWT
U.S. North East
U.S. Great Lakes
U.S. Midwest
U.S. South
U.S. West
Tractor For
Five Axle
Semi
Combination
$112,815
$105,500
$110,725
$112,815
$113,860
$113,338
$105,500
$105,500
$115,950
$105,500
$105,500
$105,500
$109,192
$106,484
$106,484
$103,775
$108,109
Straight
Truck Two
Axle Dry
Freight
Van
$80,250
$75,000
$78,750
$80,250
$83,160
$82,775
$75,000
$75,000
$82,500
$75,000
$75,000
$75,000
$74,050
$74,050
$74,050
$74,050
$74,050
24
GST has been excluded since fleet operators will claim offsetting GST credits.
25
License Costs
Canadian license costs reflect the provincial or territorial charges for licensing the
vehicle configurations studied as found in the Truck License & Tax Manual: A
Guide to Canadian Regulations, 2007 edition published by J.J. Keller and
Associates2.
US license costs for our international corridors are based on registration of a Five
Axle Tractor Semitrailer Combination to the accepted interstate highway standard
of 80,000 lbs (36,364 kg) gross vehicle weight. The registration costs are based
on selected state jurisdictions, within each region, and applicable charges were
secured from the Trucking Permit Guide, 2007 edition published by J.J. Keller
and Associates. It includes highway use tax and state taxes.
Two axle straight trucks were assumed licensed at 14,600 kg in all jurisdictions.
Note that provincial insurance programs, where provided do not include insurance costs as part
of vehicle registrations fees for trucks as they sometimes do for autos
26
Resulting annual license costs for our Canadian case studies were as follows:
Exhibit 2.7: Licencing Fees and Weights
VEHICLE LICENSING FEES AND WEIGHTS (2007)
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
Quebec
New Brunswick
Nova Scotia
P.E.I.
Newfoundland
Yukon Territory
N.W.T.
GVW/GCW
(kgs)
No. of
Axles
($) Annual
Fee for
Power Unit
($) Annual
Fee for
Trailer
39,500
46,500
63,500
14,600
39,500
46,500
62,500
14,600
39,500
46,500
62,500
14,600
39,500
46,500
62,500
14,600
45,000
54,000
63,500
14,600
45,500
55,500
59,000
14,600
41,500
49,500
62,500
14,600
40,500
53,000
58,500
14,600
40,600
49,700
62,500
14,600
40,500
49,500
62,500
14,600
43,800
53,300
63,500
14,600
39,500
46,500
63,500
14,600
5
6
8
2
5
6
8
2
5
6
8
2
5
6
8
2
5
6
8
2
5
6
8
2
5
6
8
2
5
6
8
2
5
6
8
2
5
6
8
2
5
6
8
2
5
6
8
2
2229
2799
3905
607
1809
2377
3314
463
2378
2495
4041
656
2236
2780
4048
501
1869
2280
2722
549
2162
2961
2961
696
2141
2534
3129
757
2238
2675
3194
819
1558
1884
2655
564
1898
2325
2940
692
1128
1428
1728
240
1135
1338
1831
410
30
30
60
20
20
40
32
32
64
$10 / 5 yrs
$10 / 5 yrs
$20 / 5 yrs
$35 / Life
$35 / Life
$70 / Life
42
42
84
16
16
32
35
35
70
$65 / 5 yrs
$65 / 5 yrs
$130 / 5 yrs
25
25
50
$1 / month
$1 / month
$2 / month
20
20
40
27
28
For readers who are uncertain of which margin to assume for a specific hauling
situation, a median approach is recommended -- basing evaluations using the
5% margin cases provided.
For each of the three alternate levels of profitability, the expected internal rate of
return on investment that the trucking fleet generates is computed, as follows.
29
N.G.L.s) may dictate a higher rate of return to attract capital investment in the
enterprise.
Cents/KM
230
180
130
1999
2001
2003
2005
2007
Year
5 Axle Semi Unit (Van)
6 Axle (Triaxle) Semi Unit (Van)
8 Axle Super B Bulk Liquid Tanker
30
When examining these cost trends since the last edition of Operating Costs of
Trucks in Canada, across the seven vehicle configurations, the 2005 through
2007 increase in unit trucking costs in Canada appears to be an increase of 7.6%
over the two years, or approximately 3.7% compounded annually. This rate is
significantly higher than the two year increase in Canada's consumer price index,
which rose a total of 4.2% over the same two years (or equivalent to 2.1%
compounded). The reason for unit trucking costs increasing significantly faster
than inflation in the general economy is no doubt related to escalation in fuel
prices in this timeframe as well as apparent upward adjustments to driver wages
(especially in the resource sectors / western Canada) in response to the
generally recognized shortage of drivers.
Appendix A provides a summary of base case analysis results while Appendix B
provides truck haul container chassis costs for specified domestic and
international corridors. Detailed case study costing component results are
submitted separately to the client in an Excel file.
2.4 Comments about Reliability of the Unit Costing Method
As noted previously, Operating Costs of Trucks in Canada is not a "statistical
survey", but rather the application of an activity based unit cost model using
information from expert opinion developed as an ongoing "database"
supplemented by consultations with industry, suppliers to the industry, etc.
The motor carrier sector is a very diverse segment of the economy. This is one
of the factors that has historically impeded the development of statistical models
and is especially one that impedes the use of "statistical averages" for accurately
estimating trucking costs in specific situations.
From the Central Limit Theorem, where (sigma) represents the statistical
variance, in situations where the variance () is quite large, a precise estimation
of the mean value for an underlying process requires very large statistical
sampling to be undertaken.
In the face of these difficulties and with the relatively small published statistical
sampling of Canada's motor carrier industries, the cost modelling approach used
in the Operating Costs of Trucks in Canada methodology -- is essentially that of
applying an "expert system" for estimating total vehicle costs per kilometre.
31
As stated previously, the methodology laid out for this project is an enumerative
process that relates costs to unit component costs (e.g. wage rates per hour, fuel
prices per litre, repair costs per vehicle km operated, etc.)
The unit costs,
estimated separately, are then "summed up" to derive a total cost which can be
expressed as a vehicle operating cost per kilometrefor a specific situation.
If we were a trucking company using a model similar to the one developed for
this project to forecast the operating costs for a particular haul that we were
bidding on -- we would require the accuracy of our cost forecast to be very
precise. Given the low profit margins of the industry, and the competitiveness of
the bidding process, one would expect that our over-all cost estimate -- for some
new business -- will need to be accurate less than one percent.
If we
significantly over estimate the costs, our price will be too high and the business
will be awarded to another bidder. If we under estimate the costs, the business
will be awarded to us -- but will likely be unprofitable for us.
In this type of application of our methodology, of course, our firm would have the
luxury of exact knowledge (a 100% sample, statistically) of our immediate prior
unit cost structure. We would know current and immediate future wage levels of
our drivers; we would have an exact recent fuel cost structure, etc.
We would also have an exact specification for the haul in question -- providing
such information as trip distance, trip cycle time, specific road speeds, etc.
At the same time, our firm would generally need to be "in synch" with the best
practices of the industry as a whole -- otherwise our cost components might all
be "too high", and we would not be awarded business -- using our cost
estimates.
This being said, we know from experience that different truck operators pay
different amounts for fuel. Different truck operators have different wage
structures. Different truck operators have different purchase arrangements with
different suppliers.
Some of the foregoing factors favour larger fleets, who perhaps command larger
discounts from suppliers with whom they book larger amounts of business.
Other cost factors (such as wages paid to drivers, or administrative costs) can be
lower for smaller businesses. For these components, the variability () is very
large (commonly, variations can be found that are 10 or 20 percent, when
looking at the individual components).
The evidence that both types of trucking business tend to have a similar "bottom
line cost structure" is provided by the marketplace. Frequently, larger firms as
well as a large number of smaller fleet businesses are found coexisting within the
32
33
5 per cent.
The above figure, which is the author's conservative opinion of the reliability of
the estimates developed using this methodology, means that if our model
estimates unit costs of $1.66 per kilometre for a specific configuration of
vehicle.that it is safe to expect that unit operating costs over-all are likely to be
between 5 % of this value, or between 8 cents per kilometre.
34
35
36
lower than the wage levels used in this report) than larger firms3 that attract union
interest (even if the larger firms are not unionized, they will pay higher wages in
order to stay "not unionized"). Note again that our owner operator survey
reported lower driver wage costs than company trucks (again see Section 5).
Smaller firms will tend to spend up to 30% less for "administration" -- largely
because the span of control is smaller -- the owner / principal can more readily
manage and control the business by "daily walking around", and "visiting with all
staff including the drivers", etc. For larger businesses, auditing and financial
control packages are required as well as sophisticated communications systems
and networks to co-ordinate the work of geographically dispersed branch
operations.
Generally, the relative advantages for each firm size tend to cancel each other
out, in our experience. The author was formerly the manager of a consulting
business unit owned by a large fleet business -- giving a unique opportunity to
view actual financial information of that business, on a confidential basis. At the
same time, the consulting practice was often involved with smaller trucking
businesses, and owner operators -- sometimes with unit cost information
collected under subpoena, if the firm was involved in litigation (e.g. a loss of
income determination for the business). This unique access to actual information
for both size of firm reinforces the opinion expressed above.
Canadas Driving Force published by the Canadian Trucking Human Resources Council shows
larger firms are more likely to pay fringe benefits such as insurance policies, paid time for training,
medical/dental and pension plan contributions.
37
Profile of Private Trucking. Private Motor Truck Council of Canada. January 1998.
38
One example noted was fuel haulers who tend to use their vehicles with two
shifts a day, sometimes seven days a week resulting in annual utilization rates
around 250,000 km whether private or for-hire. Single driver intercity van fleet
utilization rates typically vary between 95,000 and 180,000 km whether private or
for-hire. Vehicles used for single shift weekday delivery locally or regionally
typically have a utilization rate in the range of 40,000 to 80,000 km a year
whether private or for-hire. These data indicate there are not any systematic
differences in utilization rates between private and for-hire fleets. Rather,
differences are application specific.
Confidential data available to the consultants also indicates that wage rates paid
are similar for both sectors for similar operations, although there is a widely held
perception that private fleets pay higher wage rates. Similarly, these confidential
data indicated fuel consumption rates are similar.
Overall, it is the consultants assessment that there are not any systematic
differences in costs between private and for-hire fleets when operating under the
same conditions.
39
54
Driver Costs
Road Expenses
Fuel Costs
Mtce & Repair Costs
Tire Costs
License Costs
Insurance Costs
Depreciation
Interest
Total Tractor (on road)
Communications
Business Overhead
Total Costs
121,487 miles
195,510 kms
3,372
Total
$39,495
$9,314
$60,287
$18,379
$3,630
$3,913
$8,385
$19,625
$4,369
$167,397
$/mile
$0.325
$0.077
$0.496
$0.151
$0.030
$0.032
$0.069
$0.162
$0.036
$1.378
cents/km
20.2
4.8
30.8
9.4
1.9
2.0
4.3
10.0
2.2
85.6
$/hour
$11.71
$2.76
$17.88
$5.45
$1.08
$1.16
$2.49
$5.82
$1.30
$49.64
$3,967
$7,034
$0.033
$0.058
2.0
3.6
$1.18
$2.09
$178,398
$1.468
91.2
$52.91
40
In one of the survey questions, operators were asked to estimate the percentage
of miles operated in each provincial jurisdiction or the USA and this question was
used by the consultant to develop some "regional cost estimates" based on
owner operators that reported a significant proportion of their mileage operated
within any specific jurisdiction.
For provinces of Saskatchewan, Manitoba, individual Atlantic Canada provinces
as well as the Yukon, Northwest Territories and Nunavut, operated mileage
reported was insignificant. Alberta and British Columbia each had 2 operators
with significant mileage, with most of the surveyed firms reporting mileage in
Ontario, Quebec and the U.S.A.
Detailed summaries of these unit cost evaluations are provided in Appendix C.
An interesting situation does emerge when we compare owner operator reported
costs from our survey to the modelled costs for tractor operation (including no
administrative costs) in our Operating Costs of Trucks in Canada model.
Exhibit 5.2 shows two comparisons:
The first comparison emerges based on what was reported for tractor
costs in the owner operator survey when "wages" and "road costs" (both
components of driver costs) are included and compared to "total tractor
costs" from the Operating Costs of Trucks in Canada. Generally, the
"tractor costs" estimated using our model come out significantly higher
than reported in the owner operator survey. This is explainable when we
note that driver costs reported in the owner operator survey tended to
only be 17 to 27 cents per kilometre.
The second comparison emerges when we "back out" what was reported
for driver costs in the owner operator survey and the driver component
from "Operating Costs of Trucks in Canada". In this instance, there is
better agreement between the two estimates of tractor operating cost (a
2.9 cent per kilometre difference between 62.4 and 65.3 cents per km) for
a lower cost of 4.6% for fleet operators.
41
BC
2
ALTA
2
ONT
20
QUE
4
ATL
6
Canada
34
103.6
133.0
128.4%
111.1
119.4
107.5%
86.3
123.1
142.6%
88.0
119.3
135.5%
85.9
106.1
123.5%
88.9
120.0
135.0%
86.1
71.3
82.8%
93.4
62.3
66.7%
61.2
61.5
100.5%
69.8
62.9
90.0%
59.7
62.4
104.5%
65.3
62.4
95.6%
Also note that the estimated company truck cost from the Operating Costs of Trucks
method is slightly less for these cost components.doubtless reflecting slightly lower
costs for the larger fleet to purchase equipment, fuel, tires and maintenance than a
single-truck owner operator pays for these same items. (See discussion, earlier Section
3).
Again, caution must be exercised in these comparisons since differences between the
two reported cost estimates may be due to Sample sizes from the owner operators
reporting in some jurisdictions, especially B.C., Alberta, Quebec and Atlantic Canada
and estimating errors in reporting costs by owner operators sampled in the survey.
42
6.0 Rail
6.1 Rail Rates
CN and CP were approached for rate quotes and provided the rates set out
below for the routes they operate. All of the rates provided were for ramp-toramp service (loading onto a rail car, rail line haul and unloading from a rail car).
In addition, both carriers publish terminal charges for a range of services such as
storage beyond the normal free time allowed, and electrical hook-ups for
containers with cooling or heating units which may apply depending upon the
circumstances relating to the movement or non-movement of containers.
It should be noted that CP no longer offers conventional trailer-on-flatcar service
but does handle trailers on its Expressway service between Montreal and
Toronto.
As expected, we were advised that confidential rates are somewhat lower than
the non-confidential rates but the railways did not provide any indication of how
much lower. With intermodal generally considered to be a high-volume but low
mark-up activity, it is possible that the reductions contained in confidential
contracts are smaller than for some carload products but other (potentially
mutually beneficial) arrangements may be included in the total confidential
pricing package. For example, the need to return empty marine containers to a
port can be alleviated if a domestic cargo can be obtained in the return direction.
To accomplish this, the railway needs the concurrence of the owning steamship
line and compliance with CBSA rules. There is also a benefit for the steamship
line since the container would be returned by the railway without charge to the
steamship line. Such a movement benefits both the railway and the steamship
company.
Any reductions in confidential rates are probably predicated either on
competition from another railway, another gateway, or by the level of truck
competition faced in the particular corridor. Short haul movements such as
Montreal-Toronto would of necessity be truck competitive while rail would have a
price advantage for longer hauls. If just-in-time service is a factor the advantage
would swing back towards truck even if the cost of using truck is higher than for
rail.
Exhibits 6.1 and 6.2 show the rates obtained from each railway for the routes
noted.
43
MARKET
FROM
TO
OPEN
TARIFF
PLAN
EQUIP.
4853'
Dist.
(mi.)
$Exch.
DOMESTIC
CALGARY
VANCOUVER
7290
25
CNRU
$1,185
995
CAD
DOMESTIC
MONCTON
MONTREAL
7290
25
CNRU
557
655
CAD
DOMESTIC
MONTREAL
MONCTON
7290
25
CNRU
985
655
CAD
DOMESTIC
MONTREAL
TORONTO
7290
25
CNRU
583
340
CAD
DOMESTIC
TORONTO
WINNIPEG
7290
25
CNRU
1,814
1,240
CAD
DOMESTIC
VANCOUVER
TORONTO
7290
25
CNRU
2,310
2,767
CAD
MARKET
FROM
TARIFF
PLAN
EQUIP.
48'
53'
Dist.
(mi.)
$Exch.
TO
TRANSBORDER
TORONTO
CHICAGO
8383
25
CNRU
$451
513
USD
TRANSBORDER
TORONTO
DETROIT
8383
25
CNRU
599
245
USD
TRANSBORDER
TORONTO
MEMPHIS
8383
25
CNRU
875
990
USD
TO
TARIFF
PLAN
EQUIP.
20'
40'
Dist.
(mi.)
$Exch.
MARKET
FROM
OSM
CALGARY
VANCOUVER
7589
85
IMPEX
764
$871
990
CAD
OSM
HALIFAX
CHICAGO
7589
85
IMPEX
908
1,009
1,672
USD
OSM
HALIFAX
TORONTO
7589
85
IMPEX
971
1,100
1,186
CAD
OSM
MONTREAL
TORONTO
7589
85
IMPEX
626
717
350
CAD
OSM
VANCOUVER
TORONTO
7589
85
IMPEX
1,932
2,169
2,767
CAD
Notes on CN Tables
FAK indicates Freight All Kinds - general freight not commodity specific
OSM indicates overseas markets the import or export of goods. All movements in steamship company
owned ISO containers (20 foot or 40 foot).
All domestic and transborder rates for movement in railway owned containers.
Terminal service charge included in OSM traffic rates where applicable.
CN rates are exclusive of fuel surcharge in Tariff 7401. Surcharge rate of 15.30% in December 2007 and
17.37% in January 2008 applied in $1 increments..
Rates include lifting (to and from chassis) at origin and destination terminals. Lifting, movement for
storage and storage at terminals may be subject to additional charges depending on circumstances and
agreement with shipper.
Rates quoted above are for the movement of loaded containers and may vary by direction.
Rates do not include pick up and delivery (dray or highway service)
Distances are approximate.
44
Dist.
(mi.)
EQUIPMENT
53'
$Exch.
CALGARY
VANCOUVER
629
CP
$1,023
CAD
DOMESTIC
MONTREAL
TORONTO
345
380
CAD
DOMESTIC
TORONTO
WINNIPEG
1,211
Shipper/trucker
CP
1,719
CAD
DOMESTIC
VANCOUVER
TORONTO
2,534
2,211
CAD
MARKET
FROM
MARKET
TORONTO
FROM
TO
OPEN
TARIFF
DOMESTIC
TRANSBORDER
FROM
TO
TARIFF
CHICAGO
CP
Dist.
(mi.)
EQUIPMENT
53'
$Exch.
530
EMP5
$433
USD
TO
TARIFF
Dist.
(mi.)
EQUIPMENT
20'
40'
$Exch.
OSM
CALGARY
VANCOUVER
CPRS 7589
648
IMPEX
$645
$716
OSM
MONTREAL
TORONTO
CPRS 7589
355
IMPEX
544
705
CAD
CAD
OSM
VANCOUVER
TORONTO
CPRS 7589
2,554
IMPEX
1842
2,110
CAD
Notes on CP Tables
FAK indicates Freight All Kinds - general freight not commodity specific
CP informed us that it does not provide intermodal service between Toronto and Detroit.
OSM indicates overseas markets the import or export of goods in third-party owned ocean containers (20 foot or 40
foot).
OSM rates are exclusive of a terminal service charge at the inland point.
Rates quoted above are for the movement of loaded containers and may vary by direction.
All domestic rates were quoted in railway owned containers. CP quoted transborder rates in EPM equipment for
which there is a daily charge of about $17 (presumably $US) not included in the rates.
CPs Montreal Toronto domestic rates are for CP Expressway trailer service hauling customer supplied trailers
and are NOT published.
CP rates quoted above are exclusive of fuel surcharge which CP quoted at 27.2% in December 2007 (Tariff CPRS
9000). The January fuel surcharge is 30.8%.
Rates include lifting (to and from chassis) at origin and destination terminals. Lifting, movement for storage and
storage at terminals may be subject to additional charges depending on circumstances and agreement with shipper.
Rates do not include pick up and delivery (dray or highway service).
Distances are approximate.
EMP refers to Equipment Management Program, a program for the interline movement of
containers specifically allocated to the program. Participating railways include the Norfolk
Southern, Union Pacific, Kansas City Southern and Canadian Pacific. There is a daily customer
charge of about US$17 for the use of an EMP container.
45
MARKET
DOMESTIC
DOMESTIC
DOMESTIC
DOMESTIC
DOMESTIC
DOMESTIC
MARKET
TRANSBORDER
TRANSBORDER
TRANSBORDER
MARKET
OSM
OSM
OSM
OSM
OSM
FROM
CALGARY
MONCTON
MONTREAL
MONTREAL
TORONTO
VANCOUVER
FROM
TORONTO
TORONTO
TORONTO
FROM
CALGARY
HALIFAX
HALIFAX
MONTREAL
VANCOUVER
TO
VANCOUVER
MONTREAL
MONCTON
TORONTO
WINNIPEG
TORONTO
TO
CHICAGO
DETROIT
MEMPHIS
TO
VANCOUVER
CHICAGO
TORONTO
TORONTO
TORONTO
20'
$1,140
1,435
1,408
1,010
2,516
48'-53'
$1,885
1,103
1,597
1,220
2,582
3,211
48'-53'
$1,157
1,309
1,563
40'
$1,264
1,560
1,557
1,115
2,789
Compensatory
Truck
Costs
$1,400
1,252
1,252
755
2,889
5,967
$1,152
562
2,121
$1,400
3,219
2,227
755
5,967
Notes on table:
Compensatory Truck Costs includes costs plus profit allowance
OSM indicates overseas markets - the import or export of goods. All movements in steamship company owned ISO
containers (20 foot or 40 foot).
All domestic and transborder rates for movement in railway owned containers.
Terminal service charge included in OSM traffic rates where applicable.
All rail movements to the US are published by CN in $US and have been converted to $CDN using Bank of Canada
average exchange rate for 2007.
Rates include lifting (to and from chassis) at origin and destination terminals. Lifting, movement for storage and storage at
terminals may be subject to additional charges depending on circumstances and agreement with shipper.
Rates quoted above are for the movement of loaded containers and may vary by direction.
No pickup or delivery charges included in calculations at Canadian ports since all have rail facilities on-dock.
Additional port charges may apply such as loading/unloading containers to/from rail flat cars and for Port of Montreal Rail
service.
Pick up(delivery) charges are based on movement of container on CN owned chassis within defined metropolitan delivery
area to or from a CN Intermodal facility
Pick up (or delivery) includes return movement of container to rail terminal
Exclusive of GST, where applicable. Assumed that drayage
costs are the same for 40 foot and 53 foot container
46
Exhibit 6.4: Comparison of Truck Costs and CP Rail Rates Selected Corridors
MARKET
FROM
TO
DOMESTIC
CALGARY
VANCOUVER
DOMESTIC
MONTREAL
TORONTO
DOMESTIC
TORONTO
WINNIPEG
DOMESTIC
VANCOUVER
TORONTO
MARKET
TRANSBORDER
MARKET
FROM
TORONTO
FROM
TO
CHICAGO
TO
OSM
CALGARY
VANCOUVER
OSM
MONTREAL
TORONTO
OSM
VANCOUVER
TORONTO
Compensatory
Truck
Costs
$1400
755
2889
5967
$1152
$1400
755
5967
Notes on table:
Compensatory Truck Costs includes costs plus profit allowance
CP informed us that it does not provide intermodal service between Toronto and Detroit.
OSM indicates overseas markets the import or export of goods in third-party owned ocean containers (20 foot or 40 foot).
OSM rates include terminal service charge.
Rates quoted above are for the movement of loaded containers and may vary by direction.
All rail movements to the US are published by CP in $US and have been converted to $CDN using Bank of Canada
average exchange rate for 2007.
No pickup or delivery charges included in calculations at Canadian ports since all have rail facilities on-dock.
All domestic rates were quoted in railway owned containers. CP quoted transborder rates in EPM equipment for which
there is a daily charge of about $17 (presumably $US) not included in the calculations.
EPM equipment is presumably for furtherance by a US-based railway via rubber transfer at Chicago.
CPs Montreal Toronto domestic rate is for CP Expressway trailer service hauling customer supplied trailers and is NOT
published.
Pick up (or delivery) includes return movement of container to rail terminal
Rates include lifting (to and from chassis) at origin and destination terminals. Lifting, movement for storage and storage at
terminals may be subject to additional charges depending on circumstances and agreement with shipper.
Exclusive of GST, where applicable
Assumed that drayage costs are the same for 40 foot and 53 foot container and for each type of traffic
Truck costs from L Ash spreadsheet
As a cross-check on the rail rates, CP published rate (tariff CPRS 7589 Item 1260) for
grain grown in the Western Division; (i.e. statutory grain) from Calgary-Vancouver was
determined to be $597 for a 20 foot container and $699 for a 40 foot container. This
compares with the quoted rates of $645 and $716 respectively for commercial traffic.
Rail rates for 20 foot containers usually require the rail transport of 2-20 foot
containers together to obtain the published rate. Since the tables above use
mostly utilize public rates, effective rates can be expected to be lower with rates
on CN and CP being approximately equal on competitive corridors.
Total rail charges for both CN and CP include drayage charges for pick up and
delivery of container at both ends of move (except at port) while truck costs only
47
include either pick up or delivery at each end. Drayage charges utilized in the rail
analysis are based on published rates in CN tariff.
48
40 ft
$200
$806
$215
$1,221
Truck
20ft
$200
$752
$215
$1,167
$1,420
The comparisons above do not include any additional port related charges that
may apply. They also use marine containers for the marine leg but highway
transport would probably be in a 53 foot dry van. While the comparisons appear
to be favourable to marine, it should be noted that most movements from Nova
Scotia to Massachusetts are probably originated elsewhere than Halifax and
destined for other than Boston. If the origin and destination are shifted outside
6
The handling of 53 foot domestic containers on a cellular liner might have proven to be a
challenge.
49
the metro areas (e.g. originating at one of the three Michelin plants at
Bridgewater, Waterville and Pictou County), the cost comparison would probably
shift to favour truck transport. There is also the jit factor that is prevalent in the
shipment of manufactured and processed goods that favours truck.
The ferry movement could involve the marine transport of a container on a trailer
(drop trailer operation for which an additional $CDN 99.25 jockey charge applies)
or a tractor trailer combination (for which the tractor driver would be charged
$CDN78.50 for the crossing). For the purpose of this analysis a highway move
using a 53 foot dry van with cab has been assumed with a total vehicle length of
60-70 feet. The marine move from Montreal to St Johns via Oceanex has been
assumed to be a drop trailer 53 foot dry van with local drayage provided in the
rate to St Johns. Accordingly, the direct truck cost would be $3,379 for the
highway service plus ferry charges of $463 for a total of $3,842. We were told
that regular dry van service makes considerable use of the marine option with
refrigerated goods moving predominantly over-the-road.
Exhibit 7.2: Comparison of Marine Rate and Truck Costs Montreal St
Johns.
Marine
Compensatory truck costs
Marine Atlantic Charges
Total
$3,500
Truck
$3,379
$464
$3,843
50
51
APPENDIX A
52
British Columbia
Configuration
5 Axle Semi Unit (Van)
80,000 km
160,000 km
240,000 km
5 Axle Semi Unit (Flat Deck)
80,000 km
160,000 km
240,000 km
5 Axle Bulk Liquid Tanker
80,000 km
160,000 km
240,000 km
5 Axle Container Chassis
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Van)
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Flat
Deck)
80,000 km
160,000 km
240,000 km
Alberta
10% Profit
Margin Total
Costs (c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin Total
Costs (c/km)
10% Profit
Margin
Total Costs
(c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin
Total Costs
(c/km)
213.2
190.2
182.5
201.9
180.2
172.9
196.8
175.6
168.5
191.6
170.4
163.3
181.6
161.4
154.7
176.9
157.3
150.8
221.3
198.5
190.9
209.7
188.0
180.8
204.3
183.2
176.2
200.1
179.0
171.9
189.5
169.5
162.9
184.7
165.2
158.7
216.1
187.7
178.3
204.8
177.8
168.9
199.5
173.3
164.5
195.6
169.3
160.5
185.3
160.4
152.0
180.5
156.2
148.1
196.7
174.2
166.7
186.4
165.0
157.9
181.6
160.8
153.9
177.8
157.0
150.1
168.5
148.8
142.2
164.1
144.9
138.5
252.9
226.2
217.4
239.5
214.3
205.9
233.4
208.8
200.6
228.8
204.2
195.9
216.8
193.4
185.6
211.2
188.5
180.9
253.3
227.1
218.4
240.0
215.1
206.9
233.8
209.6
201.6
229.1
204.8
196.7
217.0
194.0
186.3
211.5
189.0
181.6
53
240.9
207.1
195.9
228.2
196.2
185.6
222.4
191.2
180.8
218.2
186.9
176.4
206.7
177.0
167.1
201.4
172.5
162.9
294.8
265.8
256.2
279.3
251.8
242.7
272.1
245.4
236.5
270.0
243.2
234.3
255.8
230.4
221.9
249.2
224.5
216.2
284.5
239.5
224.5
269.6
226.9
212.7
262.6
221.1
207.3
260.2
218.4
204.5
246.5
206.9
193.7
240.2
201.6
188.8
54
Saskatchewan
Configuration
5 Axle Semi Unit (Van)
80,000 km
160,000 km
240,000 km
5 Axle Semi Unit (Flat Deck)
80,000 km
160,000 km
240,000 km
5 Axle Bulk Liquid Tanker
80,000 km
160,000 km
240,000 km
5 Axle Container Chassis
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Van)
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Flat
Deck)
80,000 km
160,000 km
240,000 km
Manitoba
10% Profit
Margin Total
Costs (c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin Total
Costs (c/km)
10% Profit
Margin
Total Costs
(c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin
Total Costs
(c/km)
189.7
167.0
159.4
179.7
158.2
151.0
175.1
154.1
147.1
186.2
163.3
155.6
176.4
154.7
147.4
171.9
150.7
143.7
193.9
171.4
163.9
183.7
162.4
155.2
179.0
158.2
151.2
193.1
170.2
162.6
182.9
161.3
154.1
178.2
157.1
150.1
190.2
162.2
152.9
180.2
153.7
144.8
175.6
149.7
141.1
189.8
161.4
151.9
179.8
152.9
143.9
175.2
149.0
140.2
172.9
150.7
143.2
163.8
142.7
135.7
159.6
139.1
132.2
171.9
149.5
142.0
162.9
141.6
134.5
158.7
138.0
131.1
220.9
194.9
186.3
209.2
184.7
176.5
203.9
179.9
172.0
220.5
193.9
185.1
208.9
183.7
175.3
203.6
179.0
170.8
220.8
195.3
186.8
209.2
185.0
177.0
203.8
180.3
172.4
220.5
194.3
185.6
208.9
184.1
175.8
203.5
179.3
171.3
55
212.2
179.3
168.4
201.1
169.9
159.5
195.9
165.5
155.4
212.2
178.5
167.3
201.1
169.1
158.5
195.9
164.8
154.4
257.9
229.3
219.8
244.4
217.3
208.2
238.1
211.7
202.9
256.7
227.6
218.0
243.2
215.7
206.5
236.9
210.1
201.2
253.5
209.1
194.3
240.1
198.1
184.1
234.0
193.0
179.4
252.8
207.7
192.6
239.4
196.7
182.5
233.3
191.7
177.8
56
Ontario
Configuration
5 Axle Semi Unit (Van)
80,000 km
160,000 km
240,000 km
5 Axle Semi Unit (Flat Deck)
80,000 km
160,000 km
240,000 km
5 Axle Bulk Liquid Tanker
80,000 km
160,000 km
240,000 km
5 Axle Container Chassis
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Van)
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Flat
Deck)
80,000 km
160,000 km
240,000 km
Quebec
10% Profit
Margin Total
Costs (c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin Total
Costs (c/km)
10% Profit
Margin
Total Costs
(c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin
Total Costs
(c/km)
194.4
171.5
163.9
184.1
162.5
155.3
179.4
158.3
151.3
188.6
165.5
157.9
178.6
156.8
149.6
174.1
152.8
145.7
206.7
184.0
176.4
195.8
174.3
167.1
190.8
169.8
162.8
203.8
181.0
173.3
193.1
171.4
164.2
188.2
167.0
160.0
197.4
169.1
159.7
187.1
160.2
151.3
182.3
156.1
147.4
196.0
167.5
158.0
185.7
158.7
149.7
180.9
154.6
145.9
177.3
154.9
147.5
167.9
146.8
139.7
163.6
143.0
136.1
175.8
153.3
145.8
166.6
145.2
138.1
162.3
141.5
134.6
239.7
213.3
204.5
227.1
202.1
193.7
221.3
196.9
188.8
236.2
209.3
200.3
223.7
198.3
189.8
218.0
193.2
184.9
239.9
213.9
205.3
227.3
202.7
194.4
221.4
197.5
189.5
236.2
209.7
200.9
223.8
198.7
190.3
218.0
193.6
185.5
57
221.1
187.5
176.3
209.4
177.6
167.0
204.1
173.1
162.7
220.1
186.1
174.8
208.6
176.3
165.6
203.2
171.8
161.3
268.8
240.6
231.2
254.6
227.9
219.0
248.1
222.1
213.4
255.1
226.8
217.3
241.6
214.8
205.9
235.4
209.3
200.6
259.1
214.7
199.9
245.4
203.4
189.4
239.1
198.2
184.5
255.2
210.8
196.0
241.8
199.7
185.7
235.6
194.6
180.9
58
New Brunswick
Configuration
5 Axle Semi Unit (Van)
80,000 km
160,000 km
240,000 km
5 Axle Semi Unit (Flat Deck)
80,000 km
160,000 km
240,000 km
5 Axle Bulk Liquid Tanker
80,000 km
160,000 km
240,000 km
5 Axle Container Chassis
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Van)
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Flat
Deck)
80,000 km
160,000 km
240,000 km
Nova Scotia
10% Profit
Margin Total
Costs (c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin Total
Costs (c/km)
10% Profit
Margin
Total Costs
(c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin
Total Costs
(c/km)
174.2
152.7
145.5
165.0
144.6
137.8
160.8
140.9
134.3
175.0
153.4
146.2
165.8
145.3
138.5
161.5
141.6
135.0
180.5
159.2
152.0
171.0
150.8
144.0
166.7
146.9
140.3
181.4
159.9
152.7
171.8
151.5
144.7
167.4
147.6
141.0
179.6
153.0
144.1
170.1
144.9
136.5
165.7
141.2
133.0
181.1
154.4
145.5
171.5
146.3
137.8
167.1
142.5
134.3
161.8
140.7
133.7
153.3
133.3
126.7
149.3
129.9
123.4
163.6
142.4
135.3
155.0
134.9
128.2
151.0
131.4
124.9
206.2
181.4
173.2
195.4
171.9
164.0
190.4
167.5
159.8
207.8
182.9
174.6
196.9
173.3
165.4
191.8
168.8
161.1
206.0
181.6
173.4
195.2
172.0
164.3
190.1
167.6
160.1
207.6
183.0
174.8
196.7
173.4
165.6
191.6
168.9
161.4
59
201.2
169.7
159.2
190.6
160.8
150.9
185.7
156.7
147.0
203.2
171.6
161.0
192.5
162.6
152.6
187.6
158.4
148.7
234.2
207.6
198.7
221.9
196.6
188.2
216.2
191.6
183.4
232.5
205.8
196.9
220.3
195.0
186.5
214.6
190.0
181.8
238.7
197.1
183.2
226.2
186.7
173.6
220.4
181.9
169.1
240.0
198.3
184.4
227.4
187.9
174.7
221.5
183.0
170.2
60
PEI
Configuration
5 Axle Semi Unit (Van)
80,000 km
160,000 km
240,000 km
5 Axle Semi Unit (Flat Deck)
80,000 km
160,000 km
240,000 km
5 Axle Bulk Liquid Tanker
80,000 km
160,000 km
240,000 km
5 Axle Container Chassis
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Van)
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Flat
Deck)
80,000 km
160,000 km
240,000 km
Newfoundland
10% Profit
Margin Total
Costs (c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin Total
Costs (c/km)
10% Profit
Margin
Total Costs
(c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin
Total Costs
(c/km)
176.6
153.6
146.0
167.3
145.5
138.3
163.0
141.8
134.7
186.2
164.8
157.7
176.4
156.2
149.4
171.8
152.2
145.6
182.6
159.8
152.2
173.0
151.4
144.2
168.6
147.5
140.5
190.3
169.1
162.1
180.3
160.2
153.5
175.7
156.1
149.6
183.9
155.4
145.8
174.2
147.2
138.2
169.8
143.4
134.6
190.7
164.3
155.5
180.7
155.7
147.3
176.0
151.7
143.5
165.2
142.8
135.3
156.5
135.2
128.1
152.5
131.8
124.9
172.6
151.8
144.8
163.6
143.8
137.2
159.4
140.1
133.7
209.8
183.3
174.4
198.7
173.6
165.2
193.6
169.2
161.0
218.5
193.9
185.6
207.0
183.7
175.9
201.7
178.9
171.4
209.3
183.2
174.5
198.3
173.6
165.3
193.2
169.1
161.1
218.2
193.9
185.8
206.7
183.7
176.1
201.4
179.0
171.5
61
207.2
173.3
162.0
196.2
164.2
153.5
191.2
160.0
149.6
214.1
182.8
172.4
202.8
173.2
163.3
197.6
168.7
159.1
238.1
209.5
200.0
225.6
198.5
189.5
219.8
193.4
184.6
246.1
219.7
210.8
233.2
208.1
199.7
227.2
202.8
194.6
247.4
202.3
187.3
234.4
191.6
177.4
228.3
186.7
172.9
253.4
211.9
198.1
240.1
200.8
187.7
233.9
195.6
182.9
62
Yukon
Configuration
5 Axle Semi Unit (Van)
80,000 km
160,000 km
240,000 km
5 Axle Semi Unit (Flat Deck)
80,000 km
160,000 km
240,000 km
5 Axle Bulk Liquid Tanker
80,000 km
160,000 km
240,000 km
5 Axle Container Chassis
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Van)
80,000 km
160,000 km
240,000 km
6 Axle (Triaxle) Semi Unit (Flat
Deck)
80,000 km
160,000 km
240,000 km
Northwest Territories
10% Profit
Margin Total
Costs (c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin Total
Costs (c/km)
10% Profit
Margin
Total Costs
(c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin
Total Costs
(c/km)
217.7
197.0
190.2
206.2
186.7
180.1
200.9
181.9
175.5
210.0
189.4
182.5
199.0
179.4
172.9
193.9
174.8
168.4
225.6
205.1
198.3
213.8
194.3
187.8
208.3
189.3
183.0
215.3
194.8
187.9
204.0
184.5
178.0
198.7
179.8
173.5
215.3
189.6
181.0
204.0
179.6
171.5
198.8
175.0
167.1
211.1
185.3
176.7
200.0
175.6
167.4
194.8
171.0
163.1
194.6
174.4
167.7
184.4
165.2
158.8
179.6
161.0
154.8
192.7
172.4
165.7
182.5
163.4
157.0
177.8
159.2
153.0
258.5
234.6
226.7
244.9
222.3
214.7
238.6
216.6
209.2
245.4
221.6
213.6
232.5
209.9
202.4
226.5
204.5
197.2
259.2
235.7
227.9
245.6
223.3
215.9
239.3
217.6
210.4
246.1
222.7
214.9
233.2
211.0
203.6
227.2
205.5
198.3
63
241.4
210.9
200.7
228.7
199.8
190.1
222.8
194.7
185.3
236.0
205.5
195.4
223.6
194.7
185.1
217.9
189.7
180.4
293.0
267.5
259.1
277.6
253.5
245.4
270.4
247.0
239.1
288.6
263.1
254.6
273.4
249.2
241.2
266.4
242.8
235.0
278.6
238.2
224.7
264.0
225.6
212.9
257.2
219.9
207.4
277.3
236.7
223.2
262.7
224.3
211.5
256.0
218.5
206.0
64
Province:
British Columbia
40,000 km
80,000 km
120,000 km
Alberta
40,000 km
80,000 km
120,000 km
Saskatchewan
40,000 km
80,000 km
120,000 km
Manitoba
40,000 km
80,000 km
120,000 km
Ontario
40,000 km
80,000 km
120,000 km
Quebec
40,000 km
80,000 km
120,000 km
10% Profit
Margin Total
Costs (c/km)
5% Profit
Margin Total
Costs (c/km)
2.5% Profit
Margin Total
Costs (c/km)
390.1
364.1
355.5
369.6
345.0
336.8
360.1
336.1
328.1
351.1
327.1
319.0
332.7
309.9
302.3
324.1
301.9
294.5
343.3
317.7
309.2
325.2
301.0
292.9
316.9
293.3
285.4
341.4
315.6
307.0
323.4
299.0
290.9
315.1
291.3
283.4
359.8
333.0
324.1
340.8
315.5
307.0
332.1
307.4
299.2
345.6
318.7
309.7
327.4
301.9
293.4
319.0
294.2
285.9
65
New Brunswick
40,000 km
80,000 km
120,000 km
Nova Scotia
40,000 km
80,000 km
120,000 km
P.E.I.
40,000 km
80,000 km
120,000 km
Newfoundland
40,000 km
80,000 km
120,000 km
Yukon
40,000 km
80,000 km
120,000 km
N.W.T.
40,000 km
80,000 km
120,000 km
293.8
269.3
261.1
278.4
255.1
247.3
271.2
248.6
241.0
295.2
270.5
262.3
279.7
256.3
248.5
272.5
249.7
242.1
293.3
266.8
257.9
277.9
252.7
244.3
270.8
246.2
238.1
301.6
277.2
269.0
285.8
262.6
254.9
278.4
255.9
248.3
387.0
363.3
355.4
366.7
344.2
336.7
357.3
335.4
328.1
370.7
346.7
338.7
351.2
328.5
320.9
342.2
320.0
312.6
66
APPENDIX B
67
Cost Per
$
Truck
Delivery
Km
131.9
136.5
124.5
126.0
142.2
148.3
137.3
139.0
130.1
139.7
133.1
135.5
143.9
149.1
142.7
136.5
152.3
$
Canadian Corridors Analysis -- PC*Miler Distances and Running Times
Distance
Distance
(MI)
(KM)
1 St John's, NL
Toronto, ON
1914.7
3081.3
2 Halifax, NS
Moncton, NB
162.6
261.6
3 Halifax, NS
Toronto, ON
1111.6
1788.9
4 Moncton, NB
Montreal, QC
617.3
993.4
5 Quebec, QC
Baie Comeau QC
255.9
411.8
6 Montreal, QC
Quebec, QC
156.7
252.1
7 Val D'Or
Toronto, ON
455.9
733.7
8 Toronto, ON
Montreal, QC
337.6
543.3
9 Toronto, ON
Winnipeg, MB
1379.8
2220.5
10 Sault Ste Marie
Toronto, ON
423.5
681.5
11 Winnipeg, MB
Calgary, AB
826.1
1329.4
12 Saskatoon
Calgary, AB
386.0
621.2
13 Calgary, AB
Vancouver, BC
604.4
972.7
14 Calgary, AB
Edmonton, AB
188.7
303.7
15 Edmonton, AB
Yellowknife, NT
929.5
1495.8
16 Vancouver, BC
Toronto, ON
2716.5
4371.7
17 Whitehorse, YT
Vancouver, BC
1584.3
2549.6
Transit (Hr)
68.0
5.1
34.2
23.2
7.2
5.0
11.6
9.0
56.2
10.9
27.9
10.1
22.9
5.7
30.2
101.9
52.7
68
Cost Per
Truck
Delivery
Transit (Hr)
10.8
21.9
6.6
12.3
11.2
28.6
52.8
47.0
Km
139.1
139.3
151.4
140.5
142.0
130.8
138.4
142.9
13.1
62.4
61.6
26.1
32.0
7.8
Cost Per
Km
139.3
123.8
132.9
125.7
136.0
147.4
Truck
Delivery
Cost Per Trip
$1,068
$3,219
$3,379
$1,420
$2,121
$562
69
APPENDIX C
70
Driver Costs
Road Expenses
Fuel Costs
Mtce & Repair Costs
Tire Costs
License Costs
Insurance Costs
Depreciation
Interest
Total Tractor (on road)
Communications
Business Overhead
Total Costs
116,910 miles
188,142 kms
2,554
Total
$30,000
$3,100
$79,626
$35,068
$4,746
$500
$14,077
$25,843
$1,922
$194,881
$/mile
$0.257
$0.027
$0.681
$0.300
$0.041
$0.004
$0.120
$0.221
$0.016
$1.667
cents/km
15.9
1.6
42.3
18.6
2.5
0.3
7.5
13.7
1.0
103.6
$/hour
$11.75
$1.21
$31.18
$13.73
$1.86
$0.20
$5.51
$10.12
$0.75
$76.30
$2,763
$2,000
$0.024
$0.017
1.5
1.1
$1.08
$0.78
$199,644
$1.708
106.1
$78.17
71
Region: Alberta
No of responses:
Driver Costs
Road Expenses
Fuel Costs
Mtce & Repair Costs
Tire Costs
License Costs
Insurance Costs
Depreciation
Interest
Total Tractor (on road)
Communications
Business Overhead
Total Costs
96,837 miles
155,840 kms
977
Total
$18,307
$9,275
$67,717
$34,657
$46
$4,070
$7,741
$18,667
$12,669
$173,148
$/mile
$0.189
$0.096
$0.699
$0.358
$0.000
$0.042
$0.080
$0.193
$0.131
$1.788
cents/km
11.7
6.0
43.5
22.2
0.0
2.6
5.0
12.0
8.1
111.1
$/hour
$18.74
$9.49
$69.31
$35.47
$0.05
$4.17
$7.92
$19.11
$12.97
$177.22
$4,175
$9,200
$0.043
$0.095
2.7
5.9
$4.27
$9.42
$186,523
$1.926
119.7
$190.91
72
Region: Ontario
No of responses:
20
Driver Costs
Road Expenses
Fuel Costs
Mtce & Repair Costs
Tire Costs
License Costs
Insurance Costs
Depreciation
Interest
Total Tractor (on road)
Communications
Business Overhead
Total Costs
120,922 miles
194,600 kms
3,786
Total
$42,203
$6,691
$63,373
$15,607
$3,890
$4,038
$7,813
$19,893
$4,416
$167,924
$/mile
$0.349
$0.055
$0.524
$0.129
$0.032
$0.033
$0.065
$0.165
$0.037
$1.389
cents/km
21.7
3.4
32.6
8.0
2.0
2.1
4.0
10.2
2.3
86.3
$/hour
$11.15
$1.77
$16.74
$4.12
$1.03
$1.07
$2.06
$5.25
$1.17
$44.35
$4,192
$5,557
$0.035
$0.046
2.2
2.9
$1.11
$1.47
$177,674
$1.469
91.3
$46.93
73
Region: Quebec
No of responses:
Driver Costs
Road Expenses
Fuel Costs
Mtce & Repair Costs
Tire Costs
License Costs
Insurance Costs
Depreciation
Interest
Total Tractor (on road)
Communications
Business Overhead
Total Costs
100,499 miles
161,732 kms
1,778
Total
$24,220
$5,100
$52,919
$19,686
$3,514
$3,100
$8,833
$16,517
$8,483
$142,372
$/mile
$0.241
$0.051
$0.527
$0.196
$0.035
$0.031
$0.088
$0.164
$0.084
$1.417
cents/km
15.0
3.2
32.7
12.2
2.2
1.9
5.5
10.2
5.2
88.0
$/hour
$13.62
$2.87
$29.76
$11.07
$1.98
$1.74
$4.97
$9.29
$4.77
$80.06
$4,750
$3,000
$0.047
$0.030
2.9
1.9
$2.67
$1.69
$150,122
$1.494
92.8
$84.42
74
Driver Costs
Road Expenses
Fuel Costs
Mtce & Repair Costs
Tire Costs
License Costs
Insurance Costs
Depreciation
Interest
Total Tractor (on road)
Communications
Business Overhead
Total Costs
115,601 miles
186,037 kms
2,773
Total
$36,196
$12,551
$56,426
$14,536
$4,226
$3,048
$7,107
$19,406
$6,273
$159,769
$/mile
$0.313
$0.109
$0.488
$0.126
$0.037
$0.026
$0.061
$0.168
$0.054
$1.382
cents/km
19.5
6.7
30.3
7.8
2.3
1.6
3.8
10.4
3.4
85.9
$/hour
$13.06
$4.53
$20.35
$5.24
$1.52
$1.10
$2.56
$7.00
$2.26
$57.63
$3,682
$4,072
$0.032
$0.035
2.0
2.2
$1.33
$1.47
$167,523
$1.449
90.0
$60.42
75
31
Driver Costs
Road Expenses
Fuel Costs
Mtce & Repair Costs
Tire Costs
License Costs
Insurance Costs
Depreciation
Interest
Total Tractor (on road)
Communications
Business Overhead
Total Costs
123,554 miles
198,835 kms
3,159
Total
$43,131
$11,031
$56,867
$17,740
$3,541
$4,259
$8,589
$19,398
$2,832
$167,388
$/mile
$0.349
$0.089
$0.460
$0.144
$0.029
$0.034
$0.070
$0.157
$0.023
$1.355
cents/km
21.7
5.5
28.6
8.9
1.8
2.1
4.3
9.8
1.4
84.2
$/hour
$13.65
$3.49
$18.00
$5.62
$1.12
$1.35
$2.72
$6.14
$0.90
$52.99
$4,195
$8,269
$0.034
$0.067
2.1
4.2
$1.33
$2.62
$179,853
$1.456
90.5
$56.93
76
APPENDIX D
COSTING ANALYSIS OF CROSS LAKE FERRY OPERATION
OSWEGO-TORONTO
77
For each origin, distance was calculated to Oswego and Toronto based on PC
Miler distances using the addresses zip code as the origin point. Other locations
(e.g. domestic) points could have been selected but would have made little
difference in the mileage calculations or in truck costs. For Toronto, distance to
the Port was used as a proxy for the Toronto area. Mississauga would have
been shorter but Scarborough or Markham would have been longer. Highway
distances as calculated with PC Miler follow.
Highway Distances to Toronto and Oswego
Boston, MA port
Toronto, ON port
Boston, MA port
Oswego, NY port
New York, NY port (Elizabeth,
NJ)
Toronto, ON port
New York, NY port (Elizabeth,
NJ)
Oswego, NY port
Philadelphia, PA port
Toronto, ON port
Philadelphia, PA port
Oswego, NY port
Hamilton, ON port
Toronto, ON port
KM
868.2
535.3
MILES
539.5
332.6
742.2
461.2
441.8
770.9
470.2
70.6
274.5
479.0
292.2
43.9
78
Marine distance from Oswego to Hamilton was assumed to be 216 km and cross
lake transit time at 12 hours.8 The service would be drop trailer with two ferries
each operating one round trip per day.
Notwithstanding, the foregoing, the true measure of what would be available for a
ferry service depends upon the level of competition that truck operators could
provide. Accordingly, the truck costing model was used to develop over-the-road
truck costs including a margin for profit. The following tables provide the
comparison of what would presumably be available for a ferry service when the
trucking costs from New York, Boston, and Philadelphia respectively direct to
Toronto or via Oswego and Hamilton are compared.
Movement
Direct trucking from New York to Toronto
Trucking Cost for road portion of same movement
using potential Oswego-Hamilton ferry service:
New York Oswego
Hamilton-Toronto
Total cost
Cost
$1,026
$658
$135
$793
Movement
Direct trucking from Boston to Toronto
Trucking Cost for road portion of same movement
using potential Oswego-Hamilton ferry service:
Boston Oswego
Hamilton-Toronto
Total cost
Cost difference available for ferry service
($1,193 -$923)
$233
Cost
$1,193
$788
$135
$923
$270
Marine Transportation in Ontario, A study for the Marine Transportation Forum and the Ontario
Ministry of Transportation, The Mariport Group, December 2006, p 13.
79
Movement
Direct trucking from Philadelphia to Toronto
Trucking Cost for road portion of same movement
using potential Oswego-Hamilton ferry service:
Philadelphia Oswego
Hamilton-Toronto
Total cost
Cost
$1,064
$698
$135
$833
$231
With a drop trailer service, considerable space would be required at each end to
marshal and store the trailers and there would be a cost for this. Also, ferry
loading/unloading would be time consuming. West Coast barge jockeying
charges, for example, are in the order of $30 per trailer at each end of the barge
movement and Marine Atlantic charges are considerably higher ($99.25). If
costs comparable to those at the West Coast were to be assumed this would
remove about $60 from the share available for the actual cross-lake operation.
In addition, a cross-lake service would add in the order of 14 hours to an average
transit time.
A split movement would have some natural advantages and some potential
disadvantages.
Advantages:
Because drivers would only operate within their home country, border
certification would not be needed.
Potential for reduced costs where daily round trips are possible.
Fewer trucks on the road between the border and Hamilton.
Disadvantages
There could be additional CBSA charges at Hamilton if the Windsor ferry
model is followed.
Container transit time would be greatly increased if the ferry option is
used.
If any problems occurred with the ferry operation,9 transit time could be
greatly increased essentially one day longer.
There would be cost associated if tractors have an extended wait for the
ferry or for having to hold trailers waiting for pick-up.
80