A Truck Carriers Perspective

Presented by: David & Gordon Payne

21 October 2014, Calgary

Harbour Link Container Services Inc.

1

About Harbour Link Provides container drayage and off-dock container services

Operates a fleet of more than 100 trucks and over 350 chassis

Performs LOCAL drayage services

Provides LONG Haul drayage services

Uses the latest computer and communication technology

Recognized by CIFFA “TRUCK CARRIER OF THE YEAR” “BEST LONG HAUL CARRIER” and “BEST LOCAL CARRIER”

2

HLCSI’s Computer Technology Integrates job order, dispatch, navigation, truck chassis and

container tracking, messaging, wage capture and billing.

Uses geo fencing to capture cycle times at all port and rail facilities

Uses bar coding technology to track the deployment of the companies chassis fleet of over 350 chassis

Drivers use PDA’s (personal data assistant devices):To receive dispatch assignments To relay messages pertaining to each assignmentTo obtain electronic signatures for the receipt of containers by

customers.

3

GPS Tracking Process

4

PDA & Bar Codes

5

Geo Fencing

6

Completion of Job

7

The “PLUS” FactorThe systems enable Harbour Link to:

Monitor the actual location and progress of every truckTrack the transit time of each container pick-up/delivery at the

Port’s container terminals.Optimize dispatch, driver communication, truck turn-around,

drayage security, driver safety and the two way movement of containers and trucks.

The systems were developed jointly by Harbour Link and the UK supplier to fit the unique requirements of the North American drayage sector

The system is presently exclusive to Harbour Link

8

Topics to be discussed

The Truckers Work stoppageThe 14 Point SolutionHas the Gateway improvedReservationsRegulation or Free Market

9

Truckers Work Stoppage The work stoppage by “owner operators” occurred due to

growing frustration over the worsening wait and turn times at the Port to deliver / pick-up containers.

This action was preceded by a one day trucker stoppage in the fall of 2013

and:Four years of effort by the MVCDA and BCTA to engage in

meaningful dialogue with PMV and the Terminal Operators to achieve a solution to reduce port wait time and improve truck turn times within the terminals

10

The Morphing Impact

It was no surprise when the Owner Operators took the ultimate step to park their trucks until an action plan was put in place to correct the port waiting and turn time problem

The shock factor was the implementation of the 14 Point Action Plan by Government without any prior consultation with the drayage sector/BCTA, which included:Cost escalations to the Vince Ready rates and the doubling of the fuel

surcharge (FSC)WHEN:The cause of the work stoppage by the truckers (Owner Operators) had

nothing to do with the Vince Ready rate or FSC’s and was focused strictly on the demand to resolve the unacceptable truck turn-times being encountered by them at the Port

11

The Return to Work Plan Included:A 12% increase to the port drayage cost for containers routed via the Vancouver Gateway

The payment of a FSC to Owner Operators substantially above the cost differential between the base cost of fuel included in the Vince Ready rates and the actual cost of fuel paid by Owner Operators.

Resulted in a double payment to Owner Operators because the FSC continues to be based on the original (2005)Vince Ready base fuel cost of $1.05 per litre.

The base cost of fuel should have been increased to include the 12% increase to the Vince Ready rates made by Government on 3rd April, i.e. it should now be $1.176 per litre.

12

Truck turn times? Has truck turn time improved ? YES

It now takes less than one hour to complete a single container transaction at the Port

How has this been achieved:Terminal Operators have extended gate openings to two shifts

daily. The terminal operators made this change to mitigate the

requirements of the 14 Point Plan which requires them to pay waiting time when truck turn time is in excess of 90 minutes per truck transit

13

Average Turn Times Per Container Truck Turn Times Per Container

Week From To Centerm Vanterm Deltaport Average

27 30/06/2014 06/07/2014 43 48 53 48

28 07/07/2014 13/07/2014 43 45 47 45

29 14/07/2014 20/07/2014 44 53 44 47

30 21/07/2014 27/07/2014 35 40 44 40

31 28/07/2014 03/08/2014 39 41 34 38

32 04/08/2014 10/08/2014 31 44 44 40

33 11/08/2014 17/08/2014 47 51 46 48

34 18/08/2014 24/08/2014 53 48 42 48

35 25/08/2014 31/08/2014 48 49 50 49

36 01/09/2014 07/09/2014 51 46 44 47

37 08/09/2014 14/09/2014 43 56 45 48

38 15/09/2014 21/09/2014 41 56 45 47

39 22/09/2014 28/09/2014 37 54 48 46

14

Impact on Port Interface Terminal Operators have adopted a $50 reservation fee for all

dayshift pickups and deliveries and a $50 fee for all missed reservations

The imposition of the reservation fee by the terminal operators is to raise sufficient funds to pay for the cost to man gate operations for two full shifts.

The reservation fee for dayshift transactions has resulted in customers wanting truck carriers to move their containers only during the evening shift

15

Impact on Drayage Carriers To be eligible for the payment of wait time by terminal

operators, wait time reimbursement is limited to performing single container moves only.

When a dray carrier requests a double transaction, all rights for reimbursement of waiting time must be waved by the drayage carrier.

The result:

Today, about 10% of all terminal transits by trucks involves achieving the two way movement of containers

The Impact: More truck power is now required to move the same volume of

container traffic

16

Impact on Availability of Reservations Terminal operators have reduced the quantity of reservations

available per hour

Terminal Gates may be open for two shifts but have added only approx. 20% more reservations to the system

Obtaining reservations requires a minimum of 3 days forward planning

On most occasions, insufficient reservations are available to fulfill customer requirements

17

Regulation or Free Market The PROBLEMThe drayage sector is fragmented and functions on the principle of a race to the bottom through the bad behavior of many FSO’s to adopt ignominious business practices.

The CAUSEThe BAR of ENTRY by PMV to qualify to be an FSO is set far to low The drayage sector has mushroomed from about 60 FSO’s to 180+ entities

The FIXRaise the BAR of ENTRY

Establish Pre Qualification criteria to be become an FSO Entry requirements for an FSO should include a retributive Performance Bond Force FSO’s to establish an Industry Association with enforcement powers to ensure

compliance with the standards of conduct set forth in established bylaws Until this is done REGULATION of the Drayage sector is essential

In 2010 HLCSI lead an initiative to establish an industry organization called the Metro Vancouver Container Drayage Association. The initiative failed due to the unwillingness of many FSO’s to participate

18

A Bum Rap The Vancouver Gateway stands out to be a pro-active leader in port

service innovation aimed to enhance supply chain performance.Vancouver continues to outpace most top tier Ports in North American for

performance.Like all ports, it is affected by dislocations to its supply chain corridors. To mitigate congestion and dislocation issues it must establish Container

Nodes along the Fraser River linked by barge and short sea shipping.To help de-clog the port after the truckers work stoppage, HLCSI

successfully opened a temporary node at the Fraser Wharves site.The Port’s success requires all supply chain members to collectively work

together to find solutions that enhance the supply chain for the mutual benefit of all stakeholders.

We must stop operating in separate silos when we are all inter-reliant and dependent on each other for the Port to be successful.

19

THANK YOU

20