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Analysis of the Drop Trailer Traffic Between the B.C

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Analysis of the Drop Trailer Traffic Between the B.C ANALYSIS OF THE DROP TRAILER TRAFFIC BETWEEN THE B.C. MAINLAND AND VANCOUVER ISLAND by SCOTT DOUGLAS HINDS B.Comm., University of British Columbia, 1974 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN BUSINESS ADMINISTRATION / in the Department of COMMERCE AND BUSINESS ADMINISTRATION We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA April, 1977 Scott Douglas Hinds In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for'scholarly purposes may be granted by the Head of my Department or by his representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of The University of British Columbia 2075 Wesbrook Place Vancouver, Canada V6T 1W5 Date Z , ABSTRACT This thesis provides an analysis of the drop trailer traffic moving between the B.C. Mainland and Vancouver Island. Drop trailers are semi trailers which are literally dropped at the ferry terminal to be transported across the Strait of Georgia without the accompaniment of the power unit and driver. This specialized service is provided only by the British Columbia Coas• tal Steamship Service, a subsidiary of CP. Rail. One objective of the thesis is to analyze the economics of shipping via drop trailer as opposed to a live unit, or one that includes the driver and tractor unit such as is provided by the B.C. Ferries. A second objective is to determine the size and importance of the market, and to forecast future requirements. A third objective is to analyze the physical facilities available to determine their capacity and possibilities for expansion. The B.C.C.S.S. facility in downtown Vancouver is under pressure from various groups to relocate to a more suitable location. Thus a final objective is an analysis of the benefits and costs of re• locating the B.C.C.S.S. terminal to the north Richmond area. Since the drop trailer industry is very specialized, and captive to the B.C.C.S.S., very little information is published or available concerning it. Thus the author has had to rely pri• marily on discussions with all the parties involved, namely the B.C.C.S.S., City of Vancouver, and numerous carriers. One of the by-products of the thesis is a body of information and data pertain ing to the drop trailer industry, that can be used for future re• search in related topics. The analysis of the economics of shipping via drop trailer shows a substantial savings potential, even though the actual ferry cost is greater. The savings are generated by the elimination of idle driver and tractor time. This saving was estimated at $49.20 per one way trip. During the past decade the volume of drop trailer traffic has been increasing steadily even though railcar traffic has been on the decline. This increase is causing the B.C.C.S.S. to approach the capacity of the present system. Political and physical pressures have raised the issue of relocating the terminal A benefit-cost analysis of a particular alternative, a partial relocation to the north Richmond area shows there can be substan• tial benefits for carrier as well as the B.C.C.S.S. iv ANALYSIS OF THE DROP TRAILER TRAFFIC BETWEEN THE B.C. MAINLAND AND VANCOUVER ISLAND CONTENTS Page CHAPTER 1 INTRODUCTION: OBJECTIVES AND ORGANIZATION 1.1 Objectives 2 1.2 Area of Interest 3 1.3 Importance of Thesis 5 1.4 Limitations 7 1.5 Thesis Organization 8 CHAPTER 2 GENERAL FERRY SYSTEM 2.1 Background to the Freight Problem 10 2.1.1 Vancouver Island 10 2.1.2 The Economy 12 2.1.3, Transportation Network 16 2.2 General Problem of Freight Transport to and from the Island 19 2.3 The Ferry System in B.C. — A Brief History 20 2.3.1 Pre 1958: Private Enterprise 20 2.3.2 1958 - Government Involvement 22 2.4 Ferry Services 24 2.4.1 Passenger.and Auto 25 2.4.2 Commercial Traffic 30 2.4.3 Bulk Commodities 35 CHAPTER 3 NATURE- OF DROP TRAILER TRAFFIC 3.1 Operations 37 3.1.1 Facilities 37 3.1.2 Special Equipment 4 0 V Page 3.2 Advantages/Disadvantages of Drop Trailers 44 3.2.1 Motor Carriers 4 4 3.2.2 Shippers 3.2.3 Ferries 3.3 Economic Analysis of Drop Trailers 47 3.3.1 Economic Advantages 4 7 3.3.2 Time Savings 4 8 3.3.3 Rate Schedules 51 3.3.4 Trip Costs 56 APPENDIX TO CHAPTER 3 Analysis of Vehicle Operating Costs 62 I Methodology 62 II Operating Costs 6 3 A. Tractors 65 B. Trailers 65 CHAPTER 4 THE NATURE OF DROP TRAILER TRAFFIC 4.1 Characteristics of Drop Trailer Traffic 67 4.1.1 Commodities gy 4.1.2 Users 69 4.1.3 Traffic Volumes 7^ 4.1.4 Traffic Peaking 75 4.1.5 Traffic Patterns 78 4.2 Traffic Projections 81 CHAPTER 5 DROP TRAILER FACILITIES 5.1 Present Facilities 87 5.121 Terminal Area and Vessels 87 5.1.2 Capacity of Facilities 91 5.2 Location Analysis 93 5.2.1 Necessity of Present Location 93 5.2.2 Political Pressure 94 5.2.3 Access and Convenience 5.2.4 Relocation Question 96 5.2.5 Alternatives 9 7 vi Page CHAPTER 6 BENEFIT-COST ANALYSIS OF RELOCATION 6.1 Benefit-Cost Analysis 101 6.1.1 Usefulness of Benefit-Cost Analysis 101 6.1.2 Costs 10 2 6.1.3 Benefits 104 6.1.4 Discount Rate 116 6.2 Conclusions 118 CHAPTER 7 SUMMARY AND CONCLUSIONS 7.1 Review of Thesis 123 7.2 Implications for Future Development and Areas for Future Research 12 7 vii LIST OF EXHIBITS NUMBER TITLE PAGE 1.1 Principal Ferry Routes 4 .2.1 Population Centres and Transportation Network . 13 2.2 Economic Sectors-Forest Products 14 2.3 Economic Sectors-Others ................ 17 3.1 B.C.C.S.S. Schedule .... 4 3 3.2 Commercial Ferry Rates 54 4.1 B.C.C.S.S. Annual Traffic Volumes ...... 74 4.2 Daily Drop Trailer Traffic 77 4.3 B.C.C.S.S. Traffic Projections ...... 84 5.1 B.C.C.S.S. Facilities . 89 6.1 Greater Vancouver - Location of B.C.C.S.S. Users 107 6.2 Benefits and Costs of the New Drop Trailer Facility 117 LIST OF FIGURES A Diverted Traffic 112 B House Prices vs. Noise ............ 114 viii LIST OF TABLES NUMBER TITLE PAGE 2.1 Percent of Island Labour Force by Industry 12 3.1 B.C.C.S.S. Vessel Statistics 42 3.2 Comparison of Trip Times to Vancouver Island for Drop Trailers vs. Live Units . 50 3.3 Ferry Charges 52 3.4 Truck Costs . 58 4.1 Drop Trailer Volumes by Major User ... 69 4.2 Traffic Volumes - B.C.C.S.S. ....... 73 5.1 System Capabilities 90 6.1 Daily Diverted Traffic Volumes 108 6.2 Diverted Traffic 109 6.3 Revenue and Profit Estimates 120 A. Vehicle Operating Costs 65 ix ACKNOWLEDGEMENT I thank my supervisor, Dr. W.G. Waters II of the Transportation Department, Commerce and Business Administration and Dr. T. Heaver of the same department for their patience and advice in the preparation of this thesis. I thank also R. Zerbst of the Urban Land Economics Department for his assistance. Finally I would also like to thank my wife Tina for her kindness and encouragement during the preparation of this thesis. Chapter 1 Introduction Objectives and Organization -2- 1.1 Objectives This thesis examines an important component of the British Columbia Mainland-Vancouver Island transportation system: the drop trailer traffic. Drop trailers, or semi trailers that are sent to or from the island without the accompaniment of power units, now represent a large portion of commercial traffic. Equally as important, they represent the only alternative to driver-accompanied ("live") trucks, however their presence is banned on the government-owned B.C. Ferries. The first objective of the thesis is an analysis of the economics of shipping via drop trailers as opposed to live units. This should produce a difference in ferrying costs that can be ex• pressed in dollar terms. The second objective is to analyse the characteristics of drop trailer traffic. This will include the recent and current trends in the traffic in order to determine the size and importance of this market. A forecast of future traffic volumes is developed. The third objective is to analyse the phys• ical facilities available to drop trailers. Particular attention is given to possible relocation and expansion of facilities in light of recent civic developments. The benefits and costs of such a decision are analysed. Despite the size and economic importance of Vancouver Island, and the significant contribution of drop trailer trans- -3- portation to it, published information pertaining to this segment of the transportation industry is non-existant. This thesis pro• vides an understanding of the structure and future prospects for this traffic, and provides a data base from which future research can be conducted. 1.2 Area of Interest The main area of interest of this thesis is an examin• ation of the services and facilities provided for the transport of drop trailer traffic between the B.C.
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