Canadian Trucks Heading South

Canadian Trucks Heading South
July 28, 2008

Halfway between Detroit and Toronto, in southwestern Ontario, is the town of St. Thomas. It is a pastoral town of approximately 50,000 residents. In the mid 19th century, St. Thomas became famous as the "Railway Capital of Canada" as two major railways, the London and Port Stanley Railways, began operating from the town. This was the beginning on a new transportation era for the town. By 1914, eight different railways were operating from St. Thomas with more than 100 trains passing through the city daily. St. Thomas, Canada's Railway City, benefited from unparalleled growth, socially and economically.

Until the 1950's, the Railway was the dominant employer in St. Thomas. However, the end of the steam engine marked the end of the economic boom as the railways greatly downsized. Facing a massive employment crisis, the City aggressively pursued new businesses and successfully attracted other transportation ventures. Several major manufacturers opened new factories in St. Thomas including Ford's "Crown Victoria" assembly plant and Freightliner Truck's Sterling Manufacturing plant.

Almost 5 percent of the St. Thomas population is employed at Sterling, or so had been the case. Although the transportation industry saw a boom in 2005 and 2006 due to the huge demand for hauling goods, a major slump began in early 2007 with the slowdown caused by rising fuel prices. In the U.S., the major market for Freightliner trucks, fleets are downsizing and many vehicles sit unused, greatly reducing the demand for new trucks.

The Sterling plant was producing 75 trucks a day. They predict that production will be cut in half by the fall of this year. Sterling already has 600 workers on layoff and announced that an additional 720 employees will be cut from the payroll by November of this year. Adding to this situation is Freightliner's Mexican operations.

The cost of living in Mexico is below that of Canada. Unionized automotive workers in Mexico recently agreed to a new two-tier wage package. New workers will earn $2.25 an hour compared to $4.50 an hour for existing workers. Freightliner currently operates one factory in Mexico and a second is under construction, slated to open in early 2009.

Workers at the St. Thomas plant are extremely worried. In addition to the extensive layoffs of fellow employees, the current collective agreement is due to expire in March 2009. The union is concerned that they may have to make extensive and painful concessions, lest Freightliner decide to move its operations entirely to Mexico.

The end of the steam engine saw the end of the railway industry in St. Thomas. Will high fuel prices see the demise of its transportation industry?

Railroad Superiority?

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Railroad Superiority?
July 20, 2008

In the age of rising fuel prices, there is much scrutiny of the nation's transportation system. As the saying goes, desperate times call for desperate measures.

Although many Americans feel that they are hostage to foreign powers that control the flow of crude oil, they are yet to widely endorse alternatives. One school of thought promotes alternate fuel sources. Other opinions support re-examination of the ways America moves people and goods. In either case, as America's dependence on foreign produced items continues to grow, transporting these goods is major business.

A prime example is the transport of container goods. Short haul transport is best managed by truck. However, as distances grow, and America is by no means a small country, so do the options. When time is the primary concern, air freight is the preferred mode of transport. However, air transport is far too prohibitive, both in terms of cost and capacity, for large loads. The choice is either truck or railroad.

The US interstate highway system is quite extensive and is home to thousands of transport vehicles, as well as private. However, the number of trucks is continually growing, requiring expansion of the roadways due to sheer capacity and the necessary maintenance. Construction of additional lanes, to accommodate the increased volume, will cost taxpayers billions of dollars. As transportation bonds are but one of a plethora of proposed legislations that are presented to the voting public, choices have to be made and questions are raised. Could alternate modes of cargo transport serve the needs of the American consumer? Does an increase in road traffic have negative environmental effects? Are other resources being under utilized?

Proponents of railroad transport have the answers to these questions. They feel that America lags far behind European nations in terms of railroad usage. While it is true that the distances are far greater between points in the US, it still does not negate the fact that railroad lines are dedicated modes of travel, virtually undisturbed by other vehicles. Supporters state that rail transport is far more efficient than trucks and certainly would save taxpayers money. Industry analysts claim that increased train usage could greatly reduce the number of trucks on the nation's roadways, thus reducing fuel consumption and contributing to a healthier environment. Similarly, the costs associated with increased rail usage are far less than the costs necessary for upkeep and expansion of the roadways.

What is clear is the need for increased joint studies by legislators and industrial leaders to define where America is going and how it is going to get there.

New Transportation Infrastructure Improvement Plan Proposed

New Transportation Infrastructure Improvement Plan Proposed
March 13, 2008

New York State’s Department of Transportation is offering $175 Billion improvement plan for updating and repairing its transportation infrastructure. With the deterioration of New York’s roads, bridges, railroads, and ports threatening many businesses that rely on them, this much-needed transportation infrastructure improvement plan is deemed essential for the state’s long-term economic prosperity and well-being.

Tioga Hardwoods Inc., operating in Owego and Berkshire, uses trucks to transport wood from and to sawmills, averaging 250 truck loads per month. After drying and separating wood, the company eventually sells it. President and co-owner of Tioga Hardwoods Inc., Kevin Gillette, said that reliable transportation is crucial for his business to survive. Transportation is also a hot topic among companies that are planning a move to the region.

Addressing this issue, Kendra L. Adams, Deputy Director of the New York State Motor Truck Association, confirmed that updating and repairing the state’s transportation is of high priority. Trucking is a big business in New York - more than 37,134 trucking companies are operating from New York - and transported goods need to arrive on a timely manner or else the jobs of 516,500 employees of the trucking industry will be jeopardized. With roads becoming more and more congested, timely deliveries have been unduly hindered and this has cost the trucking industry a lot of money. As nearly 2,950 bridges will become deficient in the 10 years to come, highway funding is now of key importance to the industry.

Kevin Gillette stated that faster rail service can be a feasible option for his company if only train speed improves. Bruce Lieberman, president of Railroads of New York and chairman of New York and Atlantic Railway, said that about 1.2 billion tons of goods, including agricultural grains, wood, paper, steel, stone, and chemicals, were transported via New York railroad services in 2006. Many tracks within the state are old and congested, and with the number of goods in need of transporting expected to increase by 70% in the next 15 to 20 years, the rail option has emerged as a necessity. Lieberman said that a five-year plan has been laid out by his organization demanding railroad yard expansions to allow more goods to be hauled in addition to repairing and upgrading already existing tracks.

Air travel is also a sought-after aspect of transportation and option for hauling goods. According to Douglas Barton, Tioga County Department of Economic Development and Planning Director, although the Greater Binghamton Airport has undergone some improvements, it hasn’t been the focus of attention as of late. Nowadays, having access to air travel is as important to business as was having access to highways in the past.

Repairing and upgrading New York’s transportation items need both time and funding. The Department of Transportation is estimating that the transportation infrastructure improvement plan will take 20 years and $175.2 billion dollars to be completed. The Department of Transportation commissioner Astrid C. Glynn said that the federal government will need to provide a major amount of the funding. Once Congress renews its Federal Surface Transportation Act in 2009, the State of New York needs to seek the authorized funds in the legislation to provide the adequate funding needed for this plan. The Department of Transportation also scheduled public conferences throughout the state in order to enlighten the public about freight transportation.

The Department of Transportation’s plan needs to be carried out as soon as possible. Glynn said with an annual inflation rate of 9.2% on construction costs, a prolonged duration between planning and implementation can cause severe loss of value for the dollar and catastrophic consequences on the plan’s finances. Glynn added that any federal funding New York’s Department of Transportation receives will have to be distributed geographically. Subsequently, with a range of proposed projects all over the state, projects must be prioritized in terms of importance.