Railway Association of Canada

1
Railway Association of Canada

• Border Challenges Solutions for a Better
  Transportation Future in Ontario
• Presentation to the Transportation Club of
  Hamilton
• February 14, 2002

www.railcan.ca
2
OUTLINE

• About the RAC
• The Resurgence of Rail
• Canada U.S. Trade
• Border Challenges
• What Rail and Truck Offer
• Rail Solutions Intermodal
• Rail Related Border Initiatives
• Rail Can Do More
• Conlusion

3
ABOUT THE RAC

• 56 members
• Represents virtually all Railways operating in
  Canada today
• Class 1s (CN and CPR)
• Short lines
• Inter-city Passenger (VIA)
• Commuter
• Tourist
• Together members carry
• 4.2 million carloads annually
• 1.7 million containers and trailers
• 51 million commuters, inter-city and tourist
  train travelers

4
ABOUT THE RAC - ONTARIO

• RAC has 23 members in Ontario
• 3 Class 1s (Canadian National, Canadian Pacific
  Railway, CSX)
• 1 Regional (ONR)
• 15 Short lines
• 2 Commuters (GO Transit OC Transpo)
• 2 Inter-city Passenger (VIA AMTRAK)

5
ABOUT THE RAC - ONTARIO

• The industry operates over 12,000 kilometres of
  track and employs approx. 10,000 people
• There is also a significant supplier presence in
  Ontario e.g. National Steel Car car-building in
  Hamilton
• 41 of Ontario goods depend on rail to reach
  their market
• 90 million tons of rail freight are moving every
  year equivalent to over 5 million truckloads

6
THE RESURGENCE OF RAIL

• Considerable deregulation and policy change since
  1987. The results speak for themselves
• 220 productivity growth since 1981
• Freight rates down by 35 since 1984 and
  subsidies eliminated
• Investment returning to necessary levels for
  future productivity growth
• Excellent new fit between short lines and Class
  1s (about 50 short lines in Canada)
• Revived passenger sector
• GOOD POLICY BRINGS GOOD RESULTS

7
(No Transcript)
8
CANADA - A TRADE DEPENDENT NATION

• Over 40 of GDP comes from exports. Highest in
  G-8
• Over 1.5 billion of goods traded daily with the
  US. Growing at 13 per year
• From 1992 to 1999, exports to the US rose from
  77 to 86 of Canadian total
• NAFTA volumes, already massive, are growing at
  10 per year 67 of Canada U.S. truck traffic
  moves through Ontario
• TRADE IS VITAL TO THE NORTH AMERICAN ECONOMY

9
CANADA-US TRADE BY US REGION
1998
13
23
43
Total 473 billion Over 2.5 times 1988 figure
20
10
CANADA-US TRADE BY CANADIAN REGION
1998
Atlantic 2
6
12
14
66
11
CANADIAN EXPORT CARRIERS
Truck Rail Surface Export Share to the
US Volume 1999
Rail 44
Truck 56
Source Transport Canada
CN AND CPR ARE TRULY NORTH AMERICAN COMPANIES
12
BORDER CHALLENGES

• After September 11th, US became totally focused
  on security while Canada focused on trade they
  because their security is threatened, we because
  out trade is threatened
• Outcomes
• Economic slow-down has been exacerbated
• Careful control and processing of individuals
  crossing borders
• Need for new spending by governments (Federal
  Budget and 30 Point Border Accord)

13
BORDER CHALLENGES - OTHER

• Population growth is significant
• Truck growing rapidly 75 of goods moving
  through GTA and Hamilton Wentworth region
  transported by truck
• Congestion is unsustainable costs GTA estimated
  2 Billion annually in goods delay
• Quality of life concerns growing

14
BORDER CHALLENGES - OTHER

• Long term implications
• Potential for significant tightening of US
  security posture at Canadian border
• Long term Canadian economic performance closely
  tied to border efficiency potential for
  disinvestment from Canada
• Tremendous pressures on key corridors massive
  spending on roads required with commensurate
  increase in land use, gas consumption and air
  emissions

15
WHAT RAIL OFFERS

• Dedicated, private and controlled corridors, own
  police service
• Small, professional and stable workforce for
  volumes handled
• Mini reliance on publicly funded highways
• Environmental sustainability
• Most cost effective mode over longer
  distance/rail is also moving into shorter haul
  movements
• Safe mode of transport for people and goods
• New scheduled just-in-time service

16
A RAIL NETWORK PARALLEL TO HIGHWAY SYSTEM
17
WHAT TRUCKS OFFER

• Flexibility
• Just in time delivery
• Geared to smaller shipments
• Cost effective over short to medium distances

18
(No Transcript)
19
RAIL SOLUTIONS INTERMODAL

• Railways have made major investments in
  infrastructure and intermodal systems to shift
  over truck traffic
• New fuel-efficient locomotives and innovative
  rolling stock (e.g. double stack container cars)
• Constructed the Sarnia tunnel and re-engineered
  the Windsor-Detroit tunnel to increase capacity
• Short line railways have attracted traffic off
  the roads for short hauls and as
  feeders/distributors to the main line and
  transborder rail systems

20
RAIL RELATED BORDER INTIATIVES

• Electronic commerce
• Significant investment in information technology
• Automated customs transactions and pre-filing
  systems in place for the vast majority of rail
  traffic improved customer service and reduced
  train throughput time
• What else can be done? Better alignment of
  customs policies needed, including
• 1) Customs inspections of shipments at
  destination or
• origin terminals
• 2) Canada U.S. external border for uniform
  
• inspection of containers
• 3) Integrate systems to link Cdn and U.S. customs
  
• computer and data systems
• 4) Pre-qualify low risk customers and their
• commodities

21
RAIL CAN DO MORE

• Leaves a small environmental footprint
• Rail is five times more fuel efficient than
  inter-city trucking and three or four times more
  fuel efficient than automobiles
• Parallel network can lessen highway congestion
  (truck and auto) and land use consumption for
  highways
• Dedicated corridors into the US which can lessen
  bottlenecks at border crossings and facilitate
  the most efficient moves for mid to long distance
  freight shipments
• Primarily privately funded and maintained network

22
RAIL CAN DO MORE

• How can Canada achieve increased modal balance ?
• Policy changes include
• Tax harmonization/equity
• Introduce innovative approaches to promote
  environmental sustainability and efficiency
• Incentives to use intermodal
• Commercial road user fees
• Green taxes
• Develop and implement a comprehensive national
  Surface Transportation Policy
• Promote passenger rail by providing capital and
  regular operational funding for
  passenger/commuter rail

23
CONCLUSION

• Trade is critical to Canadas economic
  performance especially Canada/U.S.
• Border security must be enhanced yet trade must
  continue to flow, more smoothly if possible
  (increase alignment of customs policies)
• Rail is an important component but can do more
  with some policy change
• Intermodal key to medium/long haul traffic,
  improved border efficiency and congestion, and
  meeting environmental goals
• RAILS PROPOSED INITIATIVES CAN HELP ACCOMPLISH
  TRADE AND PASSENGER GROWTH IMPERATIVES