The drayage sector is vital to the cargo fluidity of Canada’s dominant container trade served by Port Metro Vancouver (PMV) as the conduit through the Asia-Pacific Gateway. Given this importance, it’s not surprising that 2014’s disruption in trucking service caused significant concern amongst shippers, businesses, and government. To address the issues, the B.C. Government appointed a B.C. Container Trucking Commissioner in early February 2015 to support better-working conditions for container truckers and to ensure efficient and reliable operations at Port Metro Vancouver. The appointment of Andy Smith, who remains President and CEO of the B.C. Maritime Employers Association, has drawn some criticism from trucking industry representatives as a potential conflict of interest however, Smith’s record in successfully negotiating two historic eight-year collective agreements on the West Coast waterfront has established his reputation for fairness while bringing reliability to Canada’s Asia-Pacific Gateway.
With no less than two lawsuits launched by the trucking industry (one by Unifor which asks the court to enforce new provincially-imposed minimum rates that were previously promised as well as the removal of Smith from the Commissioner role; and the other by the United Truckers Association addressing the new licensing system and the resulting loss of jobs for hundreds of truckers), Smith remains focussed on the task of ensuring long-term stability for Canada’s largest port.
The Importance of the Drayage Sector in Port Metro Vancouver
Thirty-one percent of laden import containers at PMV’s marine container terminals were transferred to truck in 2014. Based on 2009 data, 70 percent of the containers loaded to truck were destined for import transload facilities where the contents are transferred to larger domes- tic containers or trucks and 77 percent of this traffic is moved to local rail inter- modal terminals for shipment to destinations outside of B.C. On the export side, 73 percent of export containers were loaded in the Lower Mainland by truck and then moved to marine terminals in 2014. To support this container traffic movement, Port Metro Vancouver currently has 97 local trucking companies and 29 long-haul trucking companies licensed to provide drayage service. The drayage sector is composed of a variety of firms that service the needs of the large retail importers such as Canadian Tire and Walmart; exporters of grain and forest products; and others who provide a more specialized project cargo-related logistic service.
Port Metro Vancouver Is Not Alone
With a broad range of client interests, supply chain professionals commonly manage a dashboard of key performance indicators (KPIs) to respond to customer requirements and one would perhaps expect a wide variety of KPIs to monitor the performance of the drayage sector. British Columbia Container Trucking Commissioner Andy Smith has only a single KPI: no more work stoppages in the Port Metro Vancouver drayage industry.
In contrast, in 2014, the Port of New York and New Jersey Port Performance Task Force established goals for drayage operations: Improve turn times and reduce delays at all waypoints so drayage truck operators can make multiple turns a day; ensure that timely and accurate information is available to facilitate routing decisions; and stage arrivals and provide an adequate workforce and fleet to meet demand.
More recent developments in the ports of Los Angeles-Long Beach signaled to the Journal of Commerce that the Southern California marketplace may be moving slowly toward a dual system of drayage in which some drivers are unionized employees while others prefer to remain independent contractors. Eventually, the result could be a sufficient pool of drivers to service the 13 container terminals in the largest U.S. port complex, resulting in service and pricing consistency for shippers that depend on harbour drivers.
The above examples illustrate the fact that Canada’s largest port is not alone in exploring new approaches to the drayage sector or facing continuous competitive pressure from beneficial cargo owners. Industry eyes across North America are intensely watching Smith’s progress on the drayage file to see if local developments will impact the market share of container traffic. The full September 2015 BC Shipping News article explores the mandate of the Commissioner and his approach and progress to date.
One year after the last major work stop- page in the drayage sector, some progress has been made to flesh out details of a process to keep cargo flowing efficiently. In fact, PMV data suggests that current drayage truck turn times (an import- ant productivity measure) at Vancouver container terminals are among the best in North America. During 2014, truck turn times were reduced by 20 percent through industry initiatives, including Port Metro Vancouver’s Smart Fleet program. Discussions with drayage industry stakeholders also point to the important role that PMV officials and marine container terminal operators play. Learning to adapt to the new rules has meant learning on the fly in some cases as the nuances and needs of the different segments of the drayage sector come more fully to light. In some instances reported to this writer, players involved in either making or applying the new rules cause certain situations to arise that result in additional costs or a reduction in service levels, or take more time to resolve issues than under the previous system. In a statement that perhaps indicates he has received similar feedback, Smith openly pondered the future of the industry. “I wonder whether the drayage industry needs to operate with prescribed regulation over the long term,” said Smith. “Perhaps there is a way for the industry to become self-regulating.” While still early days for the office of the Commissioner, the direction and tone Smith has established foreshadows a willingness to engage openly with all stakeholders with a common goal of “no more work stoppages in the Port Metro Vancouver drayage sector.” Whether this attitude is reciprocated, remains to be seen.
After to the September 2015 interview with BC Shipping News Mr. Smith resigned at the BC Container Trucking Commissioner. He subsequently spoke to a breakfast meeting of the Chartered Institute of Logistics and Transportation – North America Pacific Chapter. Download a copy of Mr. Smith’s remarks and a summary of the question and answer session.