A recent report from the RAND Corporation, a US government think tank, makes the ominous statement that “disruptions are increasing in North American supply chains.” Capacity constraints could ultimately threaten North American economic competitiveness. The report concludes that “rising shipping costs, increasingly lengthy shipping times, increasingly variable transit times and increasingly large inventories, all of these are evidence of constraints in the freight transport system.”
What are the key elements of freight capacity? What are the constraints that are limiting the efficiency of our freight transportation system? According to Randy Mullet, Vice President of Government Relations at Con-way, Inc. they are:

1. Physical infrastructure: - “We are not doing a good enough job adding additional capacity, whether it’s highway, rail, ports, or air.”
2. Driver availability: - “This is a constraint because we are not keeping up with the changing demographics of the workforce.”
3. Policy constraints: - These constraints refer to “things like the paper work for homeland security, and regulations covering hours of service, and taxes.”

Here are a few observations on these key issues.

1. Physical infrastructure

If you look at some of our major cities in Canada, the problems are very apparent. During my frequent visits to Montreal to see clients and colleagues in that wonderful city, I cannot help but be struck by the fact that the Decarie Expressway and the Metropolitan Boulevard are still two of the major transportation arteries. My recollection as an ex-Montrealer is that these roads were built for Expo 67, forty years ago! In Toronto, you only have to look at the congestion on highway 401 during much of the day to see the same problem and to ponder the impact the gridlock is having on Canadian commerce and productivity. While highway 407 (toll road) and 403 have been built within the past 40 years, the 401, 427, Don Valley Parkway and QEW still handle much of the traffic in and around metro Toronto. A similar story exists in many cities across North America.
The situation at the ports is very similar. The rapid growth in trade with Asia and other economic regions has placed great pressure on many of the leading ports, whether they are in LA/Long Beach, Vancouver or the east coast. As an example, Anthony R. Coscia, Chairman of the Port of New York and New Jersey recently indicated that “during the past 10 years, our cargo volume has doubled and our rail volume has nearly tripled. The dramatic increases require us to take immediate steps to ensure that our port continues to grow and prosper.” The investment in roads and ports has not kept pace with the level of economic development.

2. Driver availability

The driver issue is a result of a number of different factors. It starts with the fact that true value of truck drivers is not properly recognized in our society. Truck driving takes a variety of skills to perform but this is still not fully appreciated by many people. Pay for drivers, has been increasing in recent years, but it has not been sufficient to offset the negative effects of being away from home for blocks of time which does not exist with other competitively valued professions. The pressures to meet the hours of service requirements, safety concerns, customs processes and customer/dispatcher demands makes this an undervalued career choice.

3. Policy constraints

These constraints come in many forms. According to Tom AppaRao, Director of Transportation Planning for the region of Peel in Toronto, the “EA (environmental assessment) processes for highways and transit are slow and cumbersome, causing excessive delays in protecting corridors and constructing the necessary transportation infrastructure.” Another hurdle is the inconsistency across North America with respect to the use of long combination vehicles (LCV’s) or multi axel tractor trailers. LCV’s have been in use in Western Canada and Quebec for some years but are not acceptable in Ontario. Similarly, 3 axel trucks which are acceptable between Ontario and Quebec cannot be used between these provinces and many states. The aftermath of 9/11 has resulted in a new array of security procedures, some of which are at odds with efficient and effective transportation.

What are the solutions to these critically important issues? Certainly finger pointing and saying that these issues are up to the private or public sector to solve is not a satisfactory response. Clearly there is a need for all concerned parties to work collaboratively to address and resolve these issues with a comprehensive plan. In the next blog a compendium of ideas will be presented from a variety of people with expertise in this area.