Thank you, Mr. Chair, and thank you, members of the committee, for allowing me to present on behalf of the Prince Rupert Port Authority.
This is an important piece of legislation and is of great significance to what we are trying to accomplish in Prince Rupert in terms of facilitating continuing growth of the Prince Rupert gateway.
I'll be brief on background with respect to the port authority. I think it's important, though, to make a few comments just to provide context for other matters that I'll be raising later.
The Prince Rupert Port Authority is of course a Canadian port authority established pursuant to the Canada Marine Act statute. The port authority's powers are established through the Canada Marine Act and the port's letters patent. Prince Rupert is fortunate that we are experiencing a period of dramatic growth, and we see that growth continuing for the foreseeable future in all lines of our business.
Currently in Prince Rupert the three major terminals we have operating all rely on rail service to deliver cargo from the place of manufacture or loading onto railcar, ultimately for delivery by sea to the points of destination. Those three facilities are: the Fairview Container Terminal, for which lands are owned by the port authority and the terminal itself is operated by a private sector operator, Maher Terminals; Ridley Terminals Inc., or RTI, as we call it, which is a federal crown corporation in the business of handling and loading into vessels coal delivered by railcar from various mining locations within British Columbia and also farther away, including the Powder River Basin in the United States; and finally, Prince Rupert Grain, which is a grain and ag products facility that receives cargo from the prairie provinces and again ships that agricultural product by sea to international destinations.
One of the core objects of the Prince Rupert Port Authority is to develop marine transportation infrastructure on lands the port administers. The port lands are federal lands. The goal really is to increase the capacity of the Port of Prince Rupert to handle goods to and from Canada.
As I mentioned, we are in a period of rapid growth, so continued efficiency of the rail system—which is operated by CN in the case of Prince Rupert as the only operator—is critical to the continued efficiency of the existing terminals operating within Prince Rupert.
With respect to the continued growth that I mentioned, we are experiencing a marked increase in interest in delivering cargo through the Prince Rupert gateway to international markets and receiving cargo from international markets and delivering it, by rail principally, through Prince Rupert.
Just by way of example with respect to the expansion activities that we're contemplating and that are in the works at this time, we have an expansion of our container terminal from a 500,000-TEU—twenty-foot equivalent—container unit facility to a two million-TEU facility. The additional 1.5 million TEUs of cargo will be transported by rail as intermodal cargo.
As well, Ridley Terminals is in the process of expanding their facility to increase their capacity to upwards of 25 or 30 million metric tonnes per annum. They have an option to increase even further to 50 or 60 MTPA, or metric tonnes per annum. That's dramatic growth for Ridley Terminals.
As well, we have a Canpotex potash terminal project that has received authorization from the Minister of the Environment. Its environmental assessment has concluded, and we hope they will make a final investment decision in April of this year. That cargo will be delivered from Saskatchewan to Prince Rupert for export.
We are in the process and have actually commenced work on a major expansion of our rail infrastructure within the Port of Prince Rupert. That is the Ridley Island road, rail, and utility corridor project. This is a joint project that is benefiting from funding from the federal government, the provincial government, a substantial contribution from CN Rail, and the Prince Rupert Port Authority as well. The project is a landmark project, in that it will be constructed by first nations entities that have joint-ventured with contractors to build it out.
In addition, we have a wood pellet project, which is a new greenfield project, and another rail-based facility that will be constructed in Prince Rupert.
Additionally, CN Rail is in the process of building a second siding, which we're told will be the most expensive siding they have ever constructed in Canada, to facilitate increased rail traffic to and from the Fairview Container Terminal.
With respect to Bill and its objects, as I mentioned the Prince Rupert Port Authority supports what we believe is the principal object of this piece of legislation, which is to ensure that there are agreements in place that provide clarity, transparency, and certainty both to shippers and to rail lines regarding the obligations of both parties in their roles in the supply chain. But we also think there is another important participant or group of participants who really can't be ignored, because they are essential participants in the supply chain. Those are ports and the terminal operators who act within the ports. We rely upon efficient rail service to continue to generate more traffic through our ports, to continue to expand the capacity of our ports to handle traffic, and to facilitate growth in Canadian trade.
We've had some success with service-level agreements. In 2010, Prince Rupert Port Authority entered into a service-level agreement with our container terminal operator, Maher Terminals, and with CN Rail. It included a variety of things, but most importantly it included commitments from CN Rail and Maher Terminals with respect to rail and terminal handling service levels. As well, and I think equally importantly, it included a commitment for an exchange of data—a really key performance indicator to allow us and the rail line and the terminal to track performance and to take steps to improve service levels wherever there was a deficiency in performance.
I don't want to overemphasize it, but intermodal container traffic gets a lot of press, and Prince Rupert and Vancouver have received a lot of press recently, principally from the U.S., which has recognized the competitive advantages of west coast Canadian ports—and of eastern Canadian ports as well—as compared with American ports, which are struggling because of capacity constraints, urban congestion, and other factors.
I mention this because the “better mouse trap”, as it has been described by some commentators, that has been created in Prince Rupert and as well in Vancouver is one that we want to maintain. We don't want to see it or the integrity of the entire supply chain constrained, because that will affect us dramatically.
The Fairview Container Terminal is the fastest-growing container terminal in North America at this time. Some would argue that it's easy to be the fastest-growing when you're starting from zero; nonetheless, we've continued to expand year over year. It's the efficiency of the rail system, the efficiency of the terminal operator, and the efficiency of the vessel owners who are delivering the containers to and from the quayside that is facilitating that excellent record.
That's the background.
Our comments with respect to Bill are relatively limited. We had some concerns and expressed them during the rail freight services review process with respect to mandatory arbitration provisions, which were suggested at that time.
The concerns were that requiring arbitration as a way to conclude a service-level agreement could have an unwanted negative effect, which is to create a chilling effect on negotiations between commercial parties—the railways and the shippers. It's been our experience, when we've been involved in similar types of disputes with arbitration as a device, that sometimes parties become positional early on in the negotiation because they expect or realize that arbitration is available to them at the end, so they are cautious about taking a position that can prejudice them in an arbitration proceeding.
That said, we recognize that situations may arise in which parties acting in good faith are not able to conclude an agreement and that some way to deal with such impasses is required. Our suggestion is to take interim steps, to encourage the parties, in particular the railways and shippers—because that's where the disputes are most likely to occur in the first instance—to take active steps to negotiate in advance of arbitrating a dispute. As the legislation is drafted, with all due respect, we believe those interim steps are not adequately set out in the legislation.
During our response to the rail freight services review process, PRPA supported the suggestion that railways and shippers be assisted by a facilitator appointed either by Transport Canada or the CTA to engage in early negotiations to seek to resolve their disputes on a commercial basis, rather than by recourse to, essentially, a judge, an arbitrator.
A little bit more detail on that—
We recommend that the CTA first act as a gatekeeper and only refer a matter to arbitration if the railway and shipper have both demonstrated that they have made efforts in good faith to negotiate a service-level agreement by participating in a mediation facilitated by Transport Canada or the CTA.
Second, if that doesn't happen, we think the criteria to evaluate the steps the shipper has taken to enter into an agreement with the railways should be more fully fleshed out. As drafted, we don't believe that proposed paragraph 169.33(1)(b) establishes those types of criteria. The shipper simply just has to indicate that they made an effort, but it doesn't establish to what level that effort would be, which could be problematic if they really don't try hard enough.
Finally, with respect to the arbitration itself, we know that there are situations where an arbitration will occur. In that case, we think it is critical that the arbitral panel include expertise relating to the integrity of the supply chain, supply chain management, and also have expertise with respect to terminal and port operations to ensure that the entire supply chain, and the integrity of the entire supply chain, is taken into consideration when making a decision to impose a service-level agreement on the railway.
Finally, if there isn't sufficient expertise within the arbitral roster, the suggestion is that the panel have the ability to seek external advice and to consider that advice before making its decision. That advice could come from industry, from ports, from terminal operators.
Mr. Chair, those are my suggestions.
Thank you very much, Mr. Chair. We will do our best to comment within that timeframe.
Good afternoon, and thank you for the opportunity to present Port Metro Vancouver's position as regards Bill , the fair rail service act. As committee members may already be aware, Port Metro Vancouver is Canada's largest and busiest port, serving as a vital strategic gateway for domestic and international trade and a significant economic force strengthening the Canadian economy. We're the most diversified port in North America, facilitating trade with 160 economies, handling about 124 million tonnes of cargo each year.
As the fourth-largest tonnage port in North America, we offer 28 major marine terminals and three class 1 railways, providing a full range of facilities and services to the international shipping community. In British Columbia's lower mainland, one in 12 people earn a living as a direct result of port-related economic activity, estimated to be about 80,000 jobs. Consistent, reliable, and cost-effective rail service is fundamental for optimal supply chain performance, and ultimately to the success of the port and its role in serving our mandate on behalf of Canada. As such, the likely passage and implementation of Bill has the potential to hold consequences, either intended or unintended, for the core of our operation. Put simply, Bill C-52 is extremely important to Port Metro Vancouver.
With that in mind, let me address Port Metro Vancouver's views regarding incorporation of right-of-service agreements into the Canada Transportation Act and our views with respect to the process that is intended to establish service-level agreements should normal commercial negotiations fail.
First, with regard to service-level agreements, Port Metro Vancouver would like to highlight that significant progress has been made since 2010, when the rail freight service review and its related activities drove forms of service-level agreements between the railways and certain stakeholders, notably, the commercial terminal operators in Port Metro Vancouver, and the establishment of collaborative agreements directly between CN, CP, and the port authority. As a result of these collaborative, industry-led efforts, the average dwell time of containers at the terminal in Vancouver has been reduced significantly, by our estimates approximately 30% since 2010. While it's much more difficult to assess the improvement and performance around bulk commodities, anecdotal information that we receive and our efforts to measure this indicate that there's been a significant improvement in those sectors as well. Average transit times for containers between Vancouver and key eastern and midwestern rail hubs such as Toronto, Montreal, and, increasingly, Chicago have also substantially improved.
Overall, Port Metro Vancouver has witnessed an increased willingness on the part of the railways to work in collaboration with their supply chain partners, including at the senior executive level. We're hopeful that the implementation of Bill will not undermine the market-driven cooperative gains that have been achieved over the last several years.
Secondly, in regard to the process or mechanisms that should exist within the Canada Transportation Act for the establishment or imposition of service-level agreements, once commercial negotiations fail between railways and shippers, shippers have failed.
One of our key recommendations is that Port Metro Vancouver does not believe that a singular template for the development for such agreements can be appropriate, given the diversity and wide range of commercial and service relationships that exist within our gateway in particular. Rather, Port Metro Vancouver would submit that service-level agreements between railways and their customers should, one, describe the specific measurable and reciprocal service obligations of both parties with respect to transit times, car supply commitments, hours of operation, loading and unloading time, as well as volume, targets, and switching service frequencies; two, include issues management and clearly defined escalation in dispute resolution processes; and three, potentially include appropriate reciprocal financial incentives or penalties.
Port Metro Vancouver believes that a fundamental accountability should exist between supply chain partners for the optimization of output, while at the same time maintaining the respect for the need of all participants to earn a fair commercial return that encourages continuing investment. Clearly, the establishment of service agreements through normal commercial process should be encouraged, with arbitration as a last resort.
With this in mind, we would submit that at a high level, the process to establish arbitrated service agreements, once commercial negotiations have failed, must not be allowed to usurp meaningful commercial negotiations and agreements. Even with the most carefully crafted regulation, there is always a risk of unintended consequence, which could adversely affect shippers, railway companies, and other stakeholders, including Port Metro Vancouver. Port Metro Vancouver would suggest this risk is particularly acute in relation to an arbitrated process where much of the material impact of the operations of the supply chain partners will be determined through individual adjudications.
This brings me to my second key point. In this regard, we believe strongly that it is essential that arbitrators appointed to the CTA have specific and extensive background in and knowledge of supply chain management. The inherent complexities in the examination, drafting, and implementation of service-level agreements demand a detailed knowledge of the subject at hand, and Port Metro Vancouver believes that the risk of unintended harmful consequence grows exponentially should the individual charged with managing this process have insufficient applicable subject-matter expertise.
In closing, let me reiterate Bill 's importance to Port Metro Vancouver's interest. While we're always supportive of initiatives that increase supply chain efficiency and promote transparency and cooperation between supply chain partners, we're also cognizant that the concrete gains that we have observed in the industry since the initiation of the 2010 rail freight service review need to be preserved and fostered as much as possible.
Commercial, market-driven solutions respectful of the interest of all parties should always be given preference over arbitrated agreements, and an unintended consequence of a legislative approach should avoid, at all costs, undermining negotiations or imposing long-term, negative commercial obligations on one or more parties.
While Port Metro Vancouver is supportive of Bill C-52's intent, we also offer our caution to committee members as they deliberate on this important bill regarding the potential for harmful impacts we and other witnesses, including our friends in the Port of Prince Rupert, have identified.
Thank you again to the honourable members and chair for the opportunity to present to you today.
Good afternoon, Mr. Chairman and members of the committee. I will try to speak a little slower.
Thank you for the opportunity to present Global Container Terminals today. As you said, my name is Stephen Edwards. I am the president and chief executive officer of Global Container Terminals.
First, to provide some background on our company and our role in the intermodal supply chain in Canada, Global Container Terminals operates four container terminals in North America: Vanterm and Deltaport in Canada, under our subsidiary TSI Terminal Systems Inc.; and two in the United States, New York Container Terminal and Global Terminal.
TSI is Canada's largest container terminal operator, moving containerized cargo through Port Metro Vancouver at its facilities Vanterm, in the inner harbour, and Deltaport, at Roberts Bank.
Established in 1907, TSI is synonymous with the development of Vancouver as Canada's Pacific gateway. TSI supports annually 1,500 person-years of employment and $215 million in payroll. Our two container terminals handle annually more than two million TEUs—20-foot equivalent units—of which 60% move by rail.
There's been significant investment by governments and the private sector to ensure the ongoing success of the Asia-Pacific gateway. I believe west coast Canadian ports are positioned to grow and gain market share through competitive, efficient, and reliable service. I also believe a commercial approach is the most effective and appropriate means to establish customer-centric rail service standards with accountability by all parties. The primary objective is end-to-end supply chain service, reliability, and consistency that will sustain cargo growth and commercial success for all participants in the intermodal supply chain.
A container terminal is just one component of a...[Technical difficulty—Editor]...and involves all activities that occur between the vessel berth and the port gate. Simply put, these include vessel berthing capacity, loading and unloading full and empty containers to and from vessels, moving containers to staging areas within the terminal for pickup and delivery by rail or truck, and checking containers in and out of terminal gates.
This may sound quite simple; however, to illustrate the complexity of a container terminal, Deltaport on any given day will have between 300 and 350 different cargo container sorts in the yard. Container yard space is always at a premium. Receiving export cargo into the terminal is totally dependent on vessels loading to create yard space. Discharging import cargo from vessels is dependent on rail and truck deliveries to create yard space. Container terminal capacity is a factor of dwell times, and container space can be used three separate times in one week.
Disruptions to the container terminal operation occur each and every day. Vessels are delayed, truck arrivals peak, cargo seasons differ, weather such as fog and wind will cause cargo operations to stop, and rail service will be disrupted. These are real factors that increase costs and, perhaps most importantly, increase consequential costs for different parts of the international supply chain, depending on the day and the issue.
Our approach to managing the supply chains of the railways has been through the service-level agreements. In 2010 TSI and Canadian National Railway entered into a three-year service-level agreement. In 2011 we signed a three-year agreement with Canadian Pacific Railway. The results to date have been significant and mutually beneficial.
In February this year, we entered into a new service-level agreement with CN, which has further improved our criteria and refined our respective performance standards. The joint service-level agreements and daily performance scorecards with both class 1 railroads have increased operational and commercial stability, and have added a level of cost predictability that was previously absent.
The cargo shipping industry measures key performance indicators by the number of railcars supplied by the railway to meet shipping demand and by the length of time containers are idle on the dock, waiting for a train to move the cargo. The average exit dwell time prior to the implementation of our service-level agreements was 3.78 days. Today the average exit dwell time has been reduced to 2.8 days—or, if I state this differently, a 25% increase in our import container yard capacity—with no capital investment required.
In terms of pre- and post-service-level agreements, railcar supply has risen from 19,500 feet per day to approximately 27,000 feet per day. There's been an increase in cargo volumes and a decrease in dwell time, which is the ideal scenario for our companies and our customers.
There has not been a need to initiate a third-party commercial dispute resolution mechanism because the agreed-upon service-level agreement escalation process involving senior corporate officers has effectively addressed any and all disputes to date. The relationship and collaboration between TSI and the two railways has improved dramatically, which in turn has benefited our industry, our customers, and Canada's competitiveness in the global marketplace.
I'm sure you've heard from others that the supply chain is a complex network and is only as strong as its weakest link. It is vital that all components of the supply chain work together for the benefit of our customers and the Canadian economy.
By and large, our experience to date demonstrates that commercial service-level agreements work for all parties. Therefore, I advocate the position that organizations in the supply chain continue to work together using the commercial approach rather than legislation and arbitration. We believe we are on the right track with the service-level agreements, and it is in the best interest of all concerned to continue this effective model.
Thank you for the opportunity to present to you this afternoon.
I would like to introduce Gregg Koehler, Sinclar Group's sales manager. He is responsible for our company's logistics, and he will be available to answer any questions you may have following the presentations.
Before jumping into the presentation, I feel it is beneficial that I provide a little background on Sinclar Group Forest Products. The company is a third-generation family business that was started by Ivan Andersen and Bob Stewart 51 years ago. Today that company has varying equity interests in three stud lumber operations: a finger-joint plant, a panelized home manufacturing facility, and a wholesale lumber operation.
All of the operations are located in British Columbia's central interior, from Fort St. James to Prince George. Sinclar Group is a leading distributor of high-quality stud lumber throughout North American and Asian markets.
For the past three years, CN has been our largest non-governmental supplier, averaging just less than $20 million in cost to our company. Approximately 70% of all our products are shipped by rail.
As one last introductory point, I just want to point out that the comments I make pertain to Sinclar Group. I am not intending my comments to represent other organizations or companies impacted by Bill .
Sinclar Group, over its history, has achieved its success through partnerships. The company started as an equity partnership and has since grown to incorporate other partners. From Tl'oh Forest Products, which is a joint venture between Nak'azdli First Nation and us, to the relationship we have with the City of Prince George to supply heat to the city's downtown, our business opportunities have been rooted in openness, collaboration, and innovation from both parties.
The relationship we have established with CN over the past few years has been focused on understanding the needs and looking for opportunities to improve performance of both parties. We have observed a steady improvement in rail service over those years. While we have experienced a few disruptions along the way, we have been able to engage CN to work through the issues. Through these challenges, both parties have been committed to understanding each other's perspectives, and the communication between the companies has significantly improved.
Most recently, we reached an agreement with CN to provide more centre-beam capacity by removing a ramp at the Nechako operation in return for a volume commitment. Currently the two companies are working on building more flexibility into the supply chain by exploring alternative shipping methods, such as intermodal shipments.
In all cases, it starts with communication about the issues and a commitment from both parties to collaboratively work together to find new solutions for the dynamic marketplace.
Over the past four years, Sinclar Group has grown its stud lumber shipments, capturing a greater share of the North American and Asian markets. We were able to achieve record shipments, in part due to the commercial....[Technical difficulty—Editor]
Sinclar Group, I think, would be considered a medium-sized business. We pride ourselves in finding creative, effective ways of serving our customers. Given our size and our need to leverage the strengths of our stakeholders to meet our customers' expectations, we are susceptible to sudden changes in partners' strategic direction.
While it would be nice to think we will maintain harmonious commercial arrangements with all of our partners, reality dictates that there will be changes. A serious risk to any manufacturer is a significant disruption to its ability to get its products to market.
The amendment that gives shippers the right to enter into service agreements with the railway companies and establish an arbitration process in the event of a dispute, I believe, is a significant improvement and will reduce the risk I mentioned before. Further, I believe past performance of the railways has made it necessary to mandate that service agreements be established when requested by the shipper.
As a manufacturer, Sinclar Group is looking for greater certainty with rail supply. We want to know that the railcars will be spotted within the agreed-upon time range. We want to know that the cars will be switched out within the agreed-upon switch window. We want to know that our products will be delivered to our customers on time. Further to this, we want to make sure we are getting competitive rates to ship our products.
Establishing service obligations, communication obligations, performance standards, performance measurements, consequences, and dispute resolution processes are key to any commercial agreement. This provides the opportunity for companies to engage with the railways on important issues. That said, the conversation cannot be one-sided. It is reasonable to expect each shipper to be held to the same standard as the railway. After all, the issue at hand seems to be the equating of the commercial relationship. This will not be achieved by mandating a one-sided conversation.
I'm not an expert at logistics, let alone managing a railway; to me, the railway has a lot of moving parts—no pun intended. The railways have all the internal challenges that every other company has. In addition to those challenges, from weather, connections, turnaround times, and variable shipping distances, the railways must contend with each of these external factors to ensure Sinclar Group gets what we want.
When listening to all the challenges the railways face and industry's call for more prescriptive measures around the commercial agreements, I get concerned about the sacrifices shippers will have to make to establish functioning relationships. To me, it means the costs for shippers will go up, or the certainty associated with delivery will decrease. I believe the latter will manifest itself in longer time windows for delivery, making it increasingly more difficult to manage Sinclar Group's workforce and production.
Past performance of the railways has made Bill necessary. I think the bill has appropriately walked the fine line of mandating action but allowing for the flexibility to tailor agreements to the needs of each shipper. The past performance failures cannot be undone. We need to learn from them, establish new protections, and move forward in restoring the constructive relationships necessary for the robust national economic performance.
I would recommend proceeding with the approval of Bill , recognizing that there are areas of concern that will be watched by all stakeholders. I recommend tasking those responsible for the 2015 review of the Canada Transportation Act with developing a monitoring program for the unresolved issues. This should be a transparent process and involve input from all stakeholders.
It is Sinclar Group's belief that businesses must be encouraged to work together to solve their business challenges. In our experience, CN has been responsive to the recommendations tabled to date. We feel their actions should be met with further collaboration to address the challenges faced by shippers today. Stakeholders working together as partners will strengthen their relationships through a greater understanding of each other's business. Through this understanding, I believe we will realize further innovation and service improvements.
Thank you again for this opportunity to present to the committee.
Good afternoon, Mr. Chairman and members of the panel. Thank you for the opportunity to make a commentary and presentation before the panel this afternoon.
Halifax represents something more for Canada in terms of the strategic outreach in global trade that we're engaged in today. The Port of Halifax is Canada's only deepwater, east coast, and fully Panamax/post-Panamax vessel-capable marine outlet that facilitates and supports Canada's overall trade objectives, particularly in using the Suez Canal through Southeast Asia.
To that end, what we talk about, and what we bring to the table, is bigger than just the parochial concerns of a port: we understand our relationship as a part of an overall supply chain that is important to Canada's economic development. Going forward on that concept, Mr. Chairman, right now 65% of our intramodal traffic is actually carried by rail, by CN, into the key inland markets that some of my good colleagues like Peter Xotta have already described, which benefit all Canadians.
We have of course seen a very similar evolution over the last two years. Subsequent to the evolution of the federal panel rail review process, which was a very constructive undertaking by the government, we have witnessed a very significant outreach and a very significant commitment on behalf of CN in working with our stakeholders and ourselves towards transparency and greater service levels of accountability and aggressive pricing structures to facilitate the use of the infrastructure provided in the Port of Halifax.
We were in fact the model and the first port to enter into a port authority terminal operator and rail combined key performance indicator metric, which, similar to the experiences you've heard about from Global, from Mr. Xotta, and from the Port of Prince Rupert, etc., has produced demonstrable and tangible benefits. It is our hope and intention to work with CN and our other stakeholders, because, as you have heard in commentary before, it is a complex, integrated supply chain. The efficiency of the railroad has to be equally and fairly balanced by the expectations and the commitments of shippers and, most importantly, of the terminal operators that are the main partners in the rail transfer.
We see it as a very balanced, very complicated supply chain. We favour the commercial solutions that have been proven to be very successful so far. We do reinforce and echo the comments made by some of the panellists from Prince Rupert and the Metro Vancouver Port Authority: that due to the complexity and the supply chain, it has to be treated in a very cautious manner before any regulatory process is in place. We appreciate the complexity around the supply chain. That's why we encourage a good deal of caution with respect to forced, compulsory measures under Bill .
In summary, Mr. Chairman, Halifax recognizes and agrees with the comments made by our competitive and in fact complementary port partners in Prince Rupert and Vancouver. We do concur with the submissions and recommendations they've brought forward. Rather than restating all of that, we'll submit to you that it is the correct way to go forward from the perspective of the Halifax Port Authority as well.
As I mentioned in my comments, Ms. Chow, bulk supply chains are very diverse throughout the country at each port that handles bulk commodities. It's inherently more difficult to standardize performance metrics within those supply chains.
Having said that, you may be aware of the work that certain parties undertake on behalf of the Government of Canada to monitor the grain supply chain, for example. There are methodologies in place to do that.
A lot of our comments, both ours and those of our competitor and partner ports, will be on the intermodal supply chain that handles containers. The ability for the port to monitor that activity, which is very competitive, is much higher, so we have had tremendous success working with the railways and other service partners to establish performance targets and then to measure against those.
For example, in Vancouver, going back to 2010, we established a target among the various supply chain partners to measure our performance against a three-day dwell target. In other words, containers that were received in Vancouver and moving inland by rail should exit the terminals in three days or less. I'm pleased to say that in the two years since we initiated that activity, our performance generally is down around two days, which is very competitive with other ports up and down the west coast.
We have a very strong commitment to transparency and visibility of the performance of the supply chain among those partners. In fact, just prior to this session I was with Transport Canada and with the railways and the terminals discussing this very issue.
So the standard, as we've defined it, is less than three days. As I said, our performance is much better than that consistently, over the last 24 months particularly.
My thanks to all the guests who are here with us this afternoon.
Since I only have five short minutes, I will direct my questions to the port authority representatives.
When I read the Dinning report, among others, I felt that you had used some rather harsh words. Here's a quote from the report to give us a little background:
Port authorities reported that poor cooperation between railways and other stakeholders limits system efficiencies. All groups indicate there are no effective means to hold the railways to account...
What I have been hearing from the beginning of the hearings is that, since the bill was introduced, a number of improvements have apparently been made. I am not sure if they happened miraculously, but there have apparently been some.
My first question for you is a preamble to my second question. Do you think those improvements are temporary or do you really feel that there has been a lasting change in your relationships, even though Bill has not become law yet? If possible, could you give me a specific example?
You can answer in the same order as you gave your presentations, starting with Mr. Mayer.
I'd like to thank our guests as well.
It's rather interesting. When we had the minister appear before us, he talked about the issue of arbitration. He said the best arbitration tool is the one that is never used, and he felt very strongly about that.
As we all know in business relations—and I come from 30 years in business—unless you've got some form of what I might call a hammer, some ability to be able to enforce, the potential for things just to not get resolved becomes a concern.
It's unfortunate that our friend from Port Metro Vancouver has left, because he made a statement, or actually it came from his predecessor—I'm not sure—the president and CEO, Robin Silvester, on July 31, 2012. This letter, by the way, was sent to Transport Canada. In the part where it talked about progress since 2010, the letter said:
Despite this progress, shippers groups representing a broad spectrum of port users and customers continue to maintain the position that service issues have not been fully addressed—
—but then it goes on to say—
—or that they are concerned that the service issues will resurface without effective remedy.
Then I'm going to go back to February 28, when we heard François Tougas, from the Mining Association, say:
...now we have a situation where I think many shippers feel that their relations with the railways are much improved over what they were during the service failure period that lasted so long, which Monsieur Mongeau talked about. We don't want to go back to those days.
What I'm trying to understand—I asked this of them and I would like to get your sense of this, gentlemen—is your sense, as it relates between not just your work but also with shippers and the railways. Is the issue that it's now in good shape, and the bigger concern is that they just don't want to go back to the bad old days, as it were?
Mr. Mayer, do you have a thought on that?