Recommendation Report – British Columbia Lower Mainland Ports

Vince Ready and Corinn Bell
September 25,2014

1) Introduction

In 1999 independent owner-operators and company truck drivers moving containers to and from the ports refused to continue working. The work stoppage was a result of extremely low rates of compensation and the dysfunctional operating practices in the transportation system. Despite significant efforts to resolve the issues that led to the 1999 dispute, a second dispute arose in 2005.

During the 2005 disruption, drivers stopped providing services due to low remuneration and an inability of the industry to respond to increased costs. Again, several initiatives were taken to address the 2005 dispute and to prevent future work stoppages.

Both the 1999 and 2005 disputes occurred as a result of the same root causes. Because these fundamental issues were never properly addressed, the trucking industry is currently facing a third disruption.

The main issues in the current 2014 dispute, which are similar to issues in the past disputes, are: terminal wait times, reservation policies, rate undercutting and inequality in rate of pay, lack of an industry-wide auditing system, and lack of proper enforcement of audit judgments.

This report focuses on the current dispute and analyzes the issues that are creating conflict in the industry and problems at the port. The recommendations provided at the end of this report are based on stakeholder submissions, and an in-depth analysis of several components and processes at the heart of the current dispute.

The supplementary evidence and supporting facts provided in this report are based on what we believe to be the most recent and up-to-date reports and interviews with stakeholders. During this process, we have acquired large volumes of information, and submit that the information provided in this report is accurate. Not all of the statistics presented in this report are for the 2013/2014-year, however, they are based on the most recent studies and communications we have. Accordingly, the evidence and facts provided have value and are reliable with respect to the issues at play in the 2014 port dispute.

a) Drayage Overview

The container drayage sector is an important part of the complex international supply chain and the world outside North America. Drayage describes the overland transport of cargo to/from barges or rail yards. It is also known as truck container pickup from or delivery to a seaport or off-dock terminal (e.g., warehouses, transload centres, rail yards, container storage yards) with both the trip origin and destination in the Greater Vancouver Area.

There are three types of drayage companies: (1) pure drayage operators who depend entirely on revenue from transporting import/export containers; (2) mixed full service operators who are diversified into related logistic functions; and (3) integrated companies who are vertically integrated players affiliated with other supply chain partnersFootnote 1. Currently, three main requirements must be satisfied for drayage companies to access the marine terminals within the Port Metro Vancouver's ("PMV's") jurisdiction: (1) truckers must have a valid truck license issued by PMV; (2) truckers need a Port Pass as a security measure to access federal port property; and (3) truckers need a reservation to pick up/deliver containers, obtained through the reservation systems administered by each marine terminal. The drayage companies employ company drivers and/or owner-operators to carry the containers in the local drayage market.

The main difference between company drivers and owner-operators is that company drivers are usually paid by the hour and are employees of drayage companies, while owner-operators are normally paid by the trip based on a share of revenue received by the drayage company from its customers and on existing regulated or contractually agreed rates and are considered independent contractors selling their services to drayage companies as drivers. The drayage industry in Metro Vancouver is highly competitive, which can result in price-cutting, low profitability, and concerns regarding safety and operating standards.

A profile of the drayage industry structure is characterized in Figure 1 below. The diagram is from the British Columbia Trucking Association drayage report, produced in February 2014, and is the most recent depiction of the industry:

Exhibit 1: Container Drayage Industry Profile
  Industry Structure (# Trucks)
  Company Owner-Operator Total
Local 1,053 817 1,870
Long-haul 119 55 174
Total 1,172 872 2,044
Exhibit 1: Container Drayage Industry Profile
Concentration (% of fleet controlled)
Top 10 companies 34%
Top 20 companies 52%
Companies with <10 trucks 52%

Industry Characteristics:

  • Highly fragmented and competitive – 150 different companies in the market
  • Absent PMV’s licensing system there are relatively low financial barriers to entry, however improved National Safety Code rules are raising the standards, effectively increasing the entry requirements
  • Wide variations in understanding of costs
  • Drivers typically make 4.2 revenue one-way trip legs and 2.4 non-revenue one-way (repositioning) trip legs a day
  • Approximately 60% of drivers are unionized and 40% non-unionized

Source:Port Metro Vancouver Truck Licensing System (TLS) – number of trucks as of January 2014, however license holders may not necessarily be engaged in drayage full time. Labour Force Profile of Port Drayage Drivers in Metro Vancouver, Asia Pacific Gateway Skills Table Survey, May 2013. A total of 1,750 surveys were distributed and 639 completed, for a completion rate of 36.5%. The target number of survey completions was 550 with a  5.0% margin of error anticipated at the 95% confidence level.Footnote 2
 

Age Profile of Fleet (Years)
Model Year # Vehicles Age
1990 69 <1
1992 19 <1
1993 72 1
1994 50 2
1995 31 3
1996 77 4
1997 83 5
1998 472 6
1999 98 7
2000 133 8
2001 131 9
2002 96 10
2003 51 11
2004 112 12
2005 165 13
2006 134 14
2007 104 15
2008 47 16
2009 57 17
2010 46 18
2011 21 19
2012 1 20
2013 2 21
2014 1 23
     
Total Trucks 2,072  
Average Age   10.6

2) Previous Port Disputes

a) 1999 Dispute Summary

As stated above, in 1999 both independent owner-operators and company drivers moving containers to and from the ports refused to continue working. This work stoppage, which shut down the ports in Vancouver, was the consequence of extremely low rates of compensation, and dysfunctional operating practices in the container transportation system limiting driver productivity.

The drivers believed that the operating practises were causing delays in the movement of containers at the ports, which subsequently caused downward pressure on driver pay rates rendering it uneconomical for drivers to operate in the ports. The problems related primarily to excessive queuing delays due to congestion at the container terminals.

An estimated 450 owner-operators withdrew services from July 22 to August 23, 1999. The dispute ended following the implementation of a licensing system by the Vancouver Port Authority, which required trucking companies wishing to access the port terminals to sign a Memorandum of Agreement ("MOA") setting out rates of compensation for independent owner-operators. The MOA contained increased trip rates for the first thirty days after ratification to be followed by the adoption of hourly rates.

The decision to move to hourly rates for independent owner-operators was negotiated through collective bargaining; however, the collective agreements could not be enforced as a result of rampant undercutting of rates. Within weeks to months, most trucking companies reverted back to trip based rates.

In response to such systemic problems the Vancouver Port Authority set up a number of committees to address the port inefficiency issues. These include the:

  • Container Stakeholder Working Group, which had a mandate to increase the efficiency of terminal and trucking operations through improving communications, preventing port shutdowns, extending operating hours, and managing peak periods.
  • Container Terminal Scheduling Committee, which proposed possible improvements to truck appointment systems used by the Vancouver Port Authority container terminal operations. The Committee submitted that a new reservation system would increase the productivity of the terminals by reducing variability in the arrival rates for trucks, and increase the productivity of trucking operations by reducing turnaround time for picking up and dropping off containers. It was decided that a new reservation system must be monitored to ensure it was not being abused: for example, truckers making appointments and failing to show up. Further, the committee called for appropriate information to be released so appointment times could be well known in order to reduce wait times.
  • Empty Container Dynamics Study Committee, which developed plans to ensure sufficient off-dock capacity existed to efficiently accommodate the implementation of the on-dock empty container repositioning strategy.

The main issues that led to the 1999 dispute and work stoppage were low rates of compensation and container sector operational issues (i.e., reservation systems, queuing, off-dock capacity, and hours). Despite the efforts to resolve the issues, a second disruption arose in 2005.

b) 2005 Dispute Summary

In the 2005 disruption approximately 1,200 drivers (an estimated 1,000 independent owner-operators and 200 company drivers) stopped providing services.  This stoppage caused a significant disruption to the operation of the ports and resulted in major damage to the reputation of the ports and hundreds of millions of dollars in losses to the BC and the Canadian economies.

Services were withdrawn to protest an erosion of drivers' earnings due to high fuel costs and low remuneration from certain brokers and trucking companies.  Like the 1999 disruption, which was a result of poor remuneration, the 2005 dispute was due to wage undercutting, and the fact that the industry did not respond to the increased driver costs.

The provincial and federal governments jointly appointed Mr. Vince Ready to assist the parties to resolve the dispute.  In July 2005, Mr. Ready, working in conjunction with Mr. Peter Cameron, released a Memorandum of Agreement ("MOA 2005"), which recommended terms for the resolution of the dispute.

The Vancouver Container Truck Association accepted the recommendations set out in the MOA 2005, however the trucking companies did not.  The trucking companies argued that the MOA 2005 violated the Competition Act.  To assist in the resolution of the dispute, in August 2005 the federal government, under its jurisdiction to regulate federal undertakings, issued an Order-in-Council directing the Port Authority to implement the MOA 2005 as a condition of licensing companies wishing to have access to the ports for the purpose of moving containers.

This Order-in-Council also exempted the parties from having to comply with the Competition Act and enabled the adoption of an interim licensing system that required the trucking companies to pay their owner-operators the rates stipulated in the MOA 2005.  A truck licensing system ("TLS") was adopted which established the issue of licenses for a period of two years and required all trucking companies to sign the MOA 2005 in order to have access to the ports.  Thereafter, all short-haul container-trucking companies obtained licenses and drayage operations recommenced.

Parallel with these measures, the federal and provincial governments established a Task Force to make enquiries into the factors that led to the 1999 and 2005 disruptions, and to provide recommendations aimed at avoiding a recurrence of work stoppage, while also increasing the efficiency of port operations.  The Task Force characterized the main issues as being low rates of driver remuneration and operating practices in the container transportation system that restricted the production and efficiency of drivers.

In 2006, the Federal Cabinet enacted section 31.1(2)(b) of the Port Authorities Operation Regulation (the "Regulations")Footnote 3.The Regulations imposed a legal obligation on the Port Authority to ensure compliance with a minimum rate floor, as set out in conditions outlined in the TLS, which is a system to help manage the number of vehicles and drivers, impose safety and environmental standards, and to provide a mechanism for imposing sanctions on operators whose behaviour does not meet the port's standards or service requirements.

As the MOA 2005 was to expire in August 2007, in response to ongoing concerns regarding system complexity, costs, management, and pressure on rates, in July 2007 the Federal Cabinet amended the Regulations to make compliance with the minimum rates of remuneration as set out in the MOA 2005 a requirement to operate in the ports for non-union companies using independent operators.  Further, it was these companies that were subject to audit to ensure that the MOA 2005 rates were being paid to drivers.

The 2005 dispute created substantive damage to importers and exporters who depended on the ports to receive and export their goods.  It was the hope of all involved that setting benchmark driver and fuel surcharge rates and establishing a TLS would cure many of the issues at the Vancouver ports.  After the 2005 dispute, several initiatives were undertaken to address problems in the system.  These include:

  • In 2007, in order to ensure compliance with the minimum MOA 2005 rates, the BC Government established the Container Truck Dispute Resolution Program.
  • PMV became more diligent in its TLS administration (e.g., cancellation of inactive licenses/permits) and worked closely with the BC Government to ensure more rigorous enforcement of licensing provisions flowing from the regulatory framework.  Since, 2006 a moratorium on the issuance of new licenses or permits to independent owner-operators not operating at the Port within a particular timeframe was put into place.  PMV also established a dispute resolution mechanism in July 2007, enhancing investigative/auditing/enforcement measures to help ensure parties providing truck services to the port were operating in a manner consistent with regulatory/licensing requirements.
  • In 2008 a two-tiered licensing system was introduced.  The first version of the TLS was developed in 1999; the current version (TLS 4) was implemented on July 7, 2008.  TLS 4 introduced a dual system that includes separate licenses for Full Service Operators (FSO's) and permits for Independent Operators (IO's) serving the port.
  • In 2010, the Vancouver Port Container Truck Steering Committee (the "Steering Committee") was created.  Its mandate was, and continues to be, to identify, discuss, and attempt to resolve issues relating to the stability and efficiency of the container trucking sector in the ports.
  • In 2010, Transport Canada and the Port Authority decided that the Regulations, created in 2006 by the Federal Cabinet (s. 31.1(2)(b)) now only applied to the movement of containers originating or terminating on port lands .
  • Port Authority launched a stakeholder engagement process to develop a long-term vision for the Container Trucking Sector, where general agreement appeared to be based on the minimum rate floor needing to be improved and protected, and a system of compliance needing to be better communicated.

3) Current Dispute

With several stakeholder initiatives since 2005 the 2013/2014 trucking industry composition has changed. The numbers of owner operators in the sector dramatically decreased and were replaced by employee drivers. Further, economic pressures had intensified and the rates in the MOA 2005, which were to serve as an initial benchmark actually reduced due to undercutting. Also, economic considerations such as stagnant fuel surcharges, environmental regulations, and licensing fees significantly impacted owner operator revenues.

With mounting economic pressures coupled with significant terminal wait times, a substantial group of unionized and non-unionized container truckers stopped serving PMV in February 2014.

a) Issues in 2014

It is integral to BC and Canada's economy, as well as all stakeholders who rely on the port that the current issues be considered to bring stability and certainty to all stakeholders in this industry.

It is apparent that a number of the issues that gave rise to the 1999 and 2005 disputes still persist.  The main issues facing the current 2014 dispute include:

  • Terminal Wait Times;
  • Utilization of Night Gates;
  • Terminal Gate Compliance Initiative;
  • Terminal Reservations Policy;
  • Terminal Service Level Agreements;
  • Trip Rates for "on-dock" and "off-dock" Movements;
  • Massive Rate Undercutting;
  • Enforcement and Audit Process regarding undercutting;
  • Container Dispute Resolution Program;
  • Moratorium on New Licenses; and
  • Governance (Regulatory Framework and PMV's Truck Licensing System).

Based on ongoing conversations and interactions with stakeholders in this dispute, the problems in the industry have caused and continue to cause deep-rooted frustration.  The majority of these issues are linked to and cause the inefficient operations of the ports.  Stakeholders commonly express that the terminal wait times, reservation policy, rate undercutting, varying degrees to which drivers are paid fuel surcharge, failure to pay for "third leg trips", lack of an industry-wide auditing system, and lack of proper enforcement of audit judgments are at the foundation of the present dispute.

One of the most devastating factors affecting union and non-union drivers is the fact that the majority of these drivers had not received an increase in rates and fuel charges for the past several years.  To aggravate matters, most drivers have had their rates decreased since 2006 due to the undercutting of the "Ready Rates" and the lack of industry wide enforcement.

Despite significant efforts from 1999 to present, issues associated with compensation, working conditions, and prolonged wait times continue to undermine the sector, as well as PMV's international reputation as a reliable and competitive service provider.

In summary, the 2014 issues are essentially the same issues that were at the root of the 1999 and 2005 disputes.  The similar issues underpinning the 2014 dispute led to 1,200 drivers, both owner-operators and company employees, refusing to service PMV for approximately four weeks.

b) Appointment of Vince Ready and Corinn Bell

On March 6, 2014, Vince Ready and Corinn Bell were appointed to conduct an independent review of the issues that caused the drivers to cease trucking at PMV and asked the drivers to return to work. The press release reads as follows:

The Honourable Lisa Raitt, Minister of Transport, today appointed Mr. Vince Ready to conduct an independent review directed at resolving issues that have contributed to disruption of trucking operations at Port Metro Vancouver.

The efficient movement of goods through Port Metro Vancouver is critical to Canada's Asia Pacific Gateway and the national economy.  Recent work stoppage by some members of the Port Metro Vancouver trucking community has affected port operations.  While a number of initiatives have been undertaken in recent years to improve operational stability in the Port Metro Vancouver trucking industry, issues associated with compensation, working conditions, and wait-times continue to raise concerns.

The trucking industry plays an important role in the supply chain.  Mr. Ready, together with his colleague Ms. Corinn Bell, will conduct a detailed review of the Port Metro Vancouver trucking industry and will provide recommendations to the provincial and federal governments by May 30, 2014.  In taking this step, both Canada and B.C. look forward to an immediate return to full port operations.

The drivers did not return to work as a result of the appointment and most drayage sector drivers refused to return to work.  As a result, the federal government requested that Mr. Ready and Ms. Bell issue interim recommendations.

c) The Joint Action Plan – Trucker Work Stoppage at Port Metro Vancouver

After consultation with various stakeholders in the industry, we issued interim recommendations.  Prior to issuing our interim report, we consulted various stakeholders regarding issues and provided our report on March 12, 2014.  The interim recommendations, which were presented as potential resolution to the work stoppage were considered by both levels of government.  Instead, the federal and provincial governments and PMV negotiated a Joint Action Plan with the UTA and Unifor on March 26, 2014 that returned the drivers to work [see Appendix "A" – Joint Action Plan].

4) Major Issues

After negotiating the Joint Action Plan on March 26, 2014, the drivers returned to work on March 27, 2014 and the Steering Committee and Vince Ready, with the assistance of Corinn Bell, were tasked with implementing the various aspects of the Joint Action Plan.

After several months of meetings with stakeholders and participating in meetings with the Steering Committee, several controversial issues respecting the Joint Action Plan remain.

a) Reservation System

The marine container terminals in Vancouver have had mandatory appointment/reservation systems in place since 2005.  To gain access to a container terminal by truck, drayage companies are required to make reservations using one of four different reservation systems (a different one for each of the four different marine terminals).

The goals of such reservation systems are to make terminal operations more efficient by limiting the arrival of each truck at a terminal gate to a specific time window to reduce peaking and truck traffic congestion.  The mandatory reservation system is also used to shift traffic to night or to off-peak gates by restricting the number of daytime reservations available.

An appointment/reservation system, however, provides a challenge and complexity in regards to the coordination of operations, as more precise scheduling of truck trips to accommodate the appointment windows at terminal gates is required.

As presented by Port Metro Vancouver in a recent 2014 report, and supported by the Asia Pacific Gateway 2013 report, several issues have arisen from the reservation system:Footnote 4

Capacity:

  • Not enough reservation slots available to meet demand.

Efficiency:

  • Overbooking of appointments impacts terminals operations;
  • Cancellation of appointments impacts operations.

Appointments:

  • Different appointment and delivery policies between terminals;
  • Terminal operations impacted by lack of synchronization with appointments;
  • Lack of visibility into slot allocation process;
  • Truckers must repeatedly check for container availability.

Under the current reservation system, obtaining reservation times is extremely difficult because gates reach capacity extremely quickly.  Based on conversations with stakeholders, we understand that getting a reservation is a free-for-all and prevents companies from maximizing double ended or multiple moves.

Uncertainties also arise in regards to terminal reservations as terminals themselves may not be able to meet their operating plans due to unforeseen factors such as:  labour shortages, weather conditions, or unanticipated vessel loading and unloading delays, which result in the closure of lanes for several trucks.  These concerns have been voiced by the terminal operators in response to the Joint Action Plan which requires terminal operators to compensate drivers for wait times.

In response to the Joint Action Plan, on July 2, 2014, the Terminal Operators adopted a policy of opening gates for two shifts daily Monday to Friday, which was implemented to address terminal wait times.  In addition to opening night gates, a $50 reservation fee for all dayshift pickups and deliveries was adopted, to raise sufficient funds to pay for the cost of adding labour to man the terminal gates for two full shifts.

Stakeholders in the sector report that the current reservation systems are deficient.  Trucking companies misuse the reservation system by making appointments and failing to show up, and by strategically avoiding the reservation fee.  We understand that as the system stands today, double ended moves are near impossible to organize.  The current system makes it almost impossible to obtain sufficient appointments, and if a reservation is made, due to long waits drivers are often late to arrive for their appointments.  The various terminals have different reservation systems and currently there is no common interface between the reservation systems.  An improved, centralized reservation system could increase efficiencies in the trucking sector and help mitigate the current reservation uncertainties.  Annual reviews of the reservation system should be conducted to adjust the process accordingly in response to the industry.

b) Waiting Times

Prior to the 2014 work stoppage, more than half of drivers' trip time is spent waiting or being processed at terminals.Footnote 5 The withdrawal of services creating the 2014 disruption was promoted by growing trucker frustration over the worsening turn times being encountered at PMV to deliver and pick up containers.

A method or process needed to be established to improve wait time efficiency.  The Joint Action Plan, point 12, includes the following:

  • [A] Terminal Gate Efficiency Fee (i.e. Waiting Time Fee) shall be paid at $50 per trip for time spent waiting at Port terminals (Deltaport, Fraser Surrey Docks, Vanterm, Centerm) after ninety minutes of waiting time.  At two hours of waiting time, an additional $25 fee will be paid per trip.  At two and a half hours of waiting, an additional $25 fee will be paid per trip.  Each additional half hour will be paid at a rate of $20.  This waiting time shall begin to accrue from the designated points outlined below:
    1. Vanterm/Centerm – Waiting time shall be measured from the time of entrance to the time of exit from the Clark, McGill and the vehicle access control gate at Heatley entrances.
    2. Deltaport – a mechanism will be developed to identify time of entrance and exit to and from the terminal, and this will be measured at the last (current) overpass on the approach to Deltaport Way.
    3. Fraser Surrey Docks – waiting time shall be calculated from the time of entrance to the time of exit from the entrance off of Elevator Road and Highway 17.
    4. The following two locations require further analysis/discussion to clarify mechanics:
      1. CN Intermodal (Port Kells) – Waiting time shall be calculated from the time of entrance to the time of exit from the entrance off of 96 avenue and Highway 17.
      2. CP Intermodal (Pitt Meadows) – Waiting time shall be calculated from the time of entrance to the time of exit from the entrance to CP's yard.

As discussed in Steering Committee Meetings, several other factors may be responsible for longer than usual wait times, including:  broken transactions (e.g., documentation problems, unpaid fees, equipment issues, customer holds) which often slow transaction times and restrict terminal functionality; multiple and/or late vessels slow terminal truck processing; lunch breaks; early morning queues attributed to slow start-up of terminal operations; and exceeded terminal gate capacity leading to bottlenecks.

As a result of the $50 per container daytime fee implemented on July 1, 2014, it is reported that much of the port trucking has rapidly moved to the evening shifts, with insufficient reservations being available during this shift to match the sectorial requirements of container trade.  The avoidance of paying the daytime reservation fee has resulted in a lopsided playing field wherein the bulk of the evening shift reservations are being used to accommodate the needs of major traders which, in turn, is preventing truck carriers from securing evening reservations for smaller shippers/receivers.  As a result, smaller shippers and receivers are paying the full cost of the dayshift reservation levy.  Further, we understand that some of the terminal business has shifted to break bulk in response to the new policy and terminal fees.

c) Rates of Pay

i) On-Dock

One aspect of the drayage industry consists of transporting loaded import containers from the on-dock container terminals (i.e., Centerm, Deltaport, Fraser Surrey Docks, and Vanterm) to warehouses or distribution centres to be unloaded.  As previously noted, company drivers are usually paid by the hour, while owner-operators are normally paid by the trip based on a share of revenue received by the drayage company from its customers and on existing regulated or contractually agreed rates.  Accordingly, owner-operator's productivity corresponds directly to the number of revenue-generating moves completed in a working day.

Productivity is a key factor impacting an owner-operator's income because compensation is typically calculated per trip and not on an hourly basis.  However, if paid an hourly wage, compensation is independent of the number of moves completed per day.  

In the 2005 dispute, Mr. Ready developed a rate floor to help ensure a reasonable level of compensation for local drayage activities.  These rates (coined the "Ready Rates" in 2006) regulated the non-union owner-operators' pick-up, delivery, and movement of containers to and from marine container terminals.  The minimum trip rates, under the Ready agreement, for trips to the port terminals were set at $90, rising to $100 on August 1, 2006.

The British Columbia Trucking Association (the "BCTA") in their "Metro Vancouver Container Drayage Costs – 2014" report, stated that currently there is no independent sources of operating cost information for the container drayage sector serving PMV.Footnote 6 A benchmark tool needs to be created for carriers, shippers, trucking companies, customers, and government agencies to evaluate prevailing cost conditions and to help stabilize the industry.Footnote 7

The report provides the unit cost assumptions used to develop the 2014 Base Year Costs.  These costs provide a general representation of operating costs for drayage companies and owner-operators.  The driver wage is ambiguous because the effective wage is the amount of money the driver would earn after all expenses.  The 2014 cost inputs for driver wage based on drayage company experience is currently around $22.00/hour, after all expenses.Footnote 8

The "Labour Force Profile of Port Drayage Drivers in Metro Vancouver"report, completed by the Asia Pacific Gateway Skills Table, begins by stating that the average hourly income for all drayage drivers ($15.59 per hour) falls significantly below the median hourly wage level for the BC industry ($23.00 per hour).  The report states that as of 2013, the average non-union owner-operator in the sector made approximately $17.07/hour while the average unionized owner-operator made approximately $15.48/hour.Footnote 9

As a result of the massive undercutting, the Ready Rates of 2006 have not been provided to drivers.  In fact, it is widely reported that drivers are making less than in 2006 and this was one of the two main reasons that drivers walked off the job in 2014.  The federal and provincial governments negotiated the following on March 26, 2014 with respect to driver rates in the Joint Action Plan:

The Government of Canada commits to take appropriate measures to increase trip rates by 12% over the 2006 Ready Rates.  The rates will take effect within 30 days of the return to work and will apply to all moves of containers (whether full or empty).  To make drivers whole for the interim period between 7 days following the return to work and the date the new rates take effect, a temporary rate increment will be put in place.

These rates shall be calculated on a round trip basis, and shall apply to all moves.  A mechanism will also be established to attach a benchmark minimum rate for all hourly drivers to the federal regulation.  The rate is anticipated to be initially instituted at $25.13 on hire and $26.28 after one year of service.  Recognizing that per-trip rates for hourly drivers are a concern of all parties, the issue of the prohibition of such rates shall be reviewed in accordance with paragraph #14.  Canada and B.C. further commit to put in place a new mechanism to ensure off dock trips (including within a property or between properties) are remunerated consistent with the revised regulated rates, and the Government of Canada will expedite its 2014 Regulatory Framework Review which will assess the current wage and fuel surcharge rates.

ii) Off-Dock

According to current reports and information we received, PMV terminals handle around 2.7 million containers per year, 12% of which are empty.Footnote 10 There is also significant activity associated with the repositioning of empty containers between off-dock terminals, rail yards, storage yards, and marine terminals, as well as "bob-tail" runs (i.e., tractors without containers) to pick up loaded and/or empty containers.Footnote 11 We understand off-dock moves to primarily include the following:

  • "trip legs" that do not involve a port terminal; and
  • empty container movements that are subsequently trucked to and stored at empty container terminals (off-docks) while they await export.

The three most utilized on-dock terminals are Deltaport, Vanterm, and Centerm.  It is well accepted that empty container inventory and management has been pushed to off-dock locations throughout the Metro Vancouver area.

Currently, off-dock trips are not regulated.  The issues arising from off-dock terminal operations, such as appropriate rate of pay for off-dock moves, communication barriers, dry runs, and increased costs, raise the further question of whether it is appropriate to bring off-dock trips into full alignment with the rate regulations and the TLS. 

It is apparent from conversations with stakeholders that several container movements take place outside the ports.  There is considerable variation in these off-dock trip rates, and it appears that off-dock rates are much lower than the MOA rates.  It was reported to us countless times in the course of our discussions with drivers and the union representatives that off-dock trip rates may be at least 50% lower than average trip rates, with some rates as low as $50.00 per container, and even as low as $15.00-$20.00 per container.  It is also reported that rampant undercutting of rates occurs for off-dock container movements.

Simply put, the current off dock rates do not have any industry benchmarks.  These off-dock rates are not economical and are often below cost.  Without adequate compensation this is a significant concern as it directly impacts independent owner-operators, especially those who spend considerable time moving containers at off dock facilities.

d) Moratorium

The major feature of the licensing system that has influenced the balance between employee drivers and owner-operators is a moratorium imposed by PMV on January 15, 2007 on the issuance of new TLS licenses or permits to independent owner-operators who were not operating within the TLS jurisdiction between December 1, 2006 and January 15, 2007.

Owner-operators who subsequently became employees surrendered their existing permits.  Since the moratorium was implemented owner-operators are required to make at least one call at the port terminals every three months in order to retain an existing permit.

We understand that the principal objective of this moratorium is to instill greater business discipline on the industry through a direct employer-employee relationship.  However, the moratorium has a significant long-term impact on the stability of the local container drayage sector and trucking companies in the sector are calling for an end to what they describe as an artificially imposed cap on owner-operators.

e) Drivers, Trucks and Trips in System

Based on the 2013 "Labour Force Profile – Port Drayage Drivers in Metro Vancouver – Final Report", prepared by Asia Pacific Gateway, drivers are classified into three groups:  employees, owner-operators, and replacement drivers.Footnote 12 Approximately 28% of employees and 55% of owner-operators in the Lower Mainland drayage workforce are unionized.Footnote 13 The number of owner-operators in the drayage fleet has declined by almost 60% since 2005, as the majority have exited the drayage sector.  It is widely reported that there is an oversupply of drivers in the system and we have been advised that currently there is approximately 2,000 trucks in the system.

The 2013 Asia Pacific Gateway, "Labour Force Profile" report, provides data that shows total trips per day falling by 8%, revenue trips falling by 21%, and non-revenue trips increasing by 26%.Footnote 14 Non-revenue trips are directly related to congestion in the system, bottlenecks, and increased waiting times at the port.  Prior to the work stoppage in 2014, drivers that are paid by the trip (owner-operators) work longer hours and get paid less then drivers that are paid by the hour.Footnote 15

In order to maintain trip efficiency and equality it is necessary to analyze a system on how to improve performance in the terminals and maximize the reservation system.  It appears that the root problem is in fact that there are simply too many drivers in the system.  To help relieve the negative pressures on the system, it will be necessary to re-deploy drivers currently in the drayage sector.

f) TLS Reform

The TLS, truck licensing system, was introduced in 1999 as a requirement to access terminals, in order to manage the number of vehicles and drivers.  The current version (TLS 4) was implemented in 2008 to amend the original system and add additional safety and environmental standards relating to the condition and age of vehicles serving the port.  The current TLS also provides PMV a mechanism to impose sanctions on operators who display behaviour that does not meet the port's standards or requirements.  Today, the TLS is a dual system that includes separate licenses for Full Services Operators ("FSO's") and permits for Independent Operators ("IO's") serving the port.

After numerous discussions with stakeholders it is understood that a change to the current TLS system is required.  It has been suggested by PMV that such a change should be seen in the form of a TLS Policy, which will include mechanisms such as: security deposits, performance standards, mandatory GPS units, truck age requirements, and environmental standards.  Any reform to the TLS must assist in requiring both accountability and measuring efficiency.

g) Dispute Resolution and Audit Processes

In 2007, the Container Truck Dispute Resolution Program (the "Program") looked into addressing numerous issues that gave rise to the 1999 and 2005 disputes.  In summary, two investigators conduct audits and investigations related to a TLS company's compliance with the MOA and License Agreement.  Such an audit and investigation is done through reviewing relevant company records, the daily trip sheets completed by the non-unionized independent operators, which are compared with the activity reports provide by the Ports.  The License Agreement requires companies to comply with the MOA rates (Section 7) and grants the Program considerable flexibility in ensuring compliance, including company audits (Section 5).

A point of great contention in the industry is the fact that a large percentage of companies are not captured by the Program because of the program parameters.  This concern is echoed by the current auditors.   It is widely reported that the companies not subject to audit were not compensating drivers based on the 2006 Ready Rates and are not currently paying the Joint Action Plan rates.  Based on stakeholder communications and industry research it is apparent that there is considerable room for improvement in both efficiencies and effectiveness of dispute resolution.

5) Stakeholder Submissions

A number of stakeholders responded to the Questionnaire posed by Ready and Bell presented to industry on June 13, 2014. Below we summarize the input from the most comprehensive submissions, but we read and considered all submissions presented to us in response to the Questionnaire.

a) United Truckers Association

The United Truckers Association's (the "UTA") "Container Drayage Sector Proposal", provides a breakdown of the owner operator hourly wage:

The UTA report states the success and long-term stability of the industry is dependent on one pay structure being implemented sector-wide.  The UTA argues that setting an hourly benchmark across the whole industry (a single hourly pay structure platform for all parties) will have the following benefits:
  • The vulnerability of the current system will be mitigated and decreased by closing the loopholes and the impact and risk created by potential uncertainties;
  • The negative impact of a two-tier payment system, which has caused reoccurring failure, will be mitigated; and
  • One payment method will make it easier to:
    • Implement and control into the future and subsequently create long-term stability;
    • Track and invoice trucking companies on behalf of truckers;
    • Track and bill terminal wait-times on behalf of the companies;
    • Process financial transactions between truckers and other parties;
    • Help eliminate undercutting.

To implement such an hourly system, the UTA contends that a third party billing system must be implemented. It is the position of the UTA, in response to the Questionnaire provided by Ready and Bell in June 2013 that the hourly rate for owner operators should be $94/hour for a day shift and shift premium of $4/hour for evening shift and $8/hour for any graveyard shift. The UTA asserts that this is the benchmark hourly rate to ensure that all expenses are covered and that drivers make a fair wage for working long hours in a difficult environment. The UTA has verbally advised us that a fair benchmark for container truck drivers is the hourly rate of dump truck drivers which, according to the UTA, is approximately $125/hr.

b) Unifor

It is the position of Unifor that the Joint Action Plan was a commitment by both levels of government and PMV to certain trip rates and hourly rates for both on and off dock ("all moves") and an increased fuel surcharge.  To date, it is widely reported that many trucking companies are not paying the Joint Action Plan rates and Unifor's position since negotiating the Joint Action Plan has been that the negotiated rates must be paid by all trucking companies, whether union or non-union, and that all trucking companies ought to be subject to audit.  Further, the wait time calculation should be implemented as negotiated.

Unifor is only interested in discussing hourly rates, which were not negotiated on March 26, 2014, if such rates would result in driver compensation equivalent or above the Joint Action Plan trip rates and suggests that the appropriate hourly rate would be at least $80.73/hour, not including overtime (which should be payable at 1.5x past 8 hours and 2x past 10 hours).

It has been Unifor's position at the Steering Committee as well as in response to the Questionnaire that all commitments made in the Joint Action Plan must be implemented and that such implementation has been too long coming.

c) BC Trucking Association

The BC Trucking Association ("BCTA") represents approximately 70 drayage companies with truck licenses (90% of large licensed companies, 50% of medium licensed companies and 10% of small licensed companies).  These companies are both unionized and non-unionized entities.  According to Port Metro Vancouver (PMV), these companies operate about 40% of the drayage fleet.

On the issue of rates, the BCTA advocated, in response to the Questionnaire as follows:

Companies should not be required to pay hourly for owner-operators, although companies that choose to should be allowed to do so. Trip rates provide an incentive to owner-operators to be more productive and also offer them the opportunity to improve their overall compensation (assuming that reservations are available and turn times are reasonable). Given the current situation of the desire to maintain Gateway supply chain integrity and the Gateway's reputation, it would seem prudent to protect owner-operators from undue risk. This can be achieved by requiring drayage companies to pay owner-operators a minimum call-out fee of $200. This is based on the assumption that owner-operators would make themselves available for at least 4 continuous hours of work. If they refuse to work for a minimum of 4 hours, the call-out fee would be forfeited. A minimum call-out fee was established as one of the clauses in the 2005 Memorandum of Agreement.

In its response to the Questionnaire, the BCTA also recommended that the industry move towards implementing Service Level Agreements to address wait time and other efficiency issues at the terminals. Further, the BCTA acknowledges that currently there are too many trucks in the system and believes that re-aligning the fleet as well as removing the moratorium are necessary components moving forward.

d) The Teamsters Local 31

The Teamsters Local 31 support the concept of the hourly rate and argues that the hourly rate should cure many of the problems "…as long as you say all movement of containers must be paid the 65.00 a hour rate."  The Teamsters advocate that reform is needed in the system so that trucking companies properly manage the drivers time and the business.  Finally, the Teamsters acknowledge that there are too many companies in the system and the number needs to be contracted to reduce undercutting, decrease line-ups, increase productivity through increased driver trips.

e) International Longshore & Warehouse Union

The International Longshore & Warehouse Union ("ILWU") advocates for an hourly wage and that "To expect workers to bear the brunt of delays is ridiculous and the main reason for the current dispute".  The ILWU also supports the concept of compensating drivers for wait times and advocates strongly for double ended moves and triple moves in the sector.

f) Port Metro Vancouver

In its comprehensive response to the Questionnaire, Port Metro Vancouver ("PMV") outlined what it views as the root causes of the recent labour unrest:

As PMV looks forward to a future of sustained growth in container traffic as well as increased competition from other ports, a new approach is needed to ensure our continued success.  This approach must address the underlying root causes of the recent labour unrest in the drayage sector, which we view as the following:

  1. Strained relationship between drivers, trucking companies and terminal operators – There is no distinct contractual relationship or comprehensive service level agreement (SLA) between terminal operators and trucking companies or drivers; therefore there are currently limited incentives for terminal operators to invest in improving turn-times and yard operations.  This contributes to a lack of trust between these key stakeholders.
  2. Overly complex compensation models and rate undercutting – Current compensation models require that independent operators assume financial risks for terminal inefficiencies, as independent owner operators (IOs) are not directly compensated for excessive wait times.  The existing hybrid model of compensation (i.e. hourly and per trip) also creates challenges in monitoring and enforcing rate compliance to prevent undercutting.
  3. Over-supply of trucking capacity in the market – Oversupply of licensed trucks is clearly evidenced by data analysis for both the current state and potential future state scenarios.  This is outlined in detail in Section C.  Oversupply is further evidenced by the ability of market participants to undercut rates despite an environment of rising costs.
  4. Industry-wide difficulty in optimizing use of truck assets – Truck assets are under-utilized by the industry resulting from shipment delays, reservation system limitations and restrictions, difficulty in securing double-ended moves, inability to match up Vanterm and Centerm moves, as well as challenges getting the reservations that companies and drivers need at the right time to maximize their daily trip count.
  5. Constrained working hours of independent owner-operators – As we move to an operating model with extended terminal gate hours, the current owner-operator business model of a one-to-one relationship between driver and truck is not conducive to optimizing daily trips per asset.  As sole driver/operator of their assets, there is reluctance on behalf of owner-operators to work outside of regular hours.

PMV proposed that moving to an hourly compensation system for owner operators would benefit the industry and provide an illustrative model whereby drivers would be compensated a certain base hourly rate with an additional premium cost per trip to compensate for the cost of the truck operation, maintenance and ownership. If hourly compensation was not implemented, PMV is of the opinion that wait times should be based on the cumulative time from the driver's arrival at the terminal pre-gate and the driver's departure from the terminal exit-gate as measured through PMV's GPS reporting program in order to avoid penalizing terminals for delays related to public roadways. Finally, it was the position of PMV that the numbers of truckers in the system need to be re-aligned through TLS reform.

g) The Terminals

i) TSI Terminal Systems Inc.

TSI Terminal Systems Inc. ("TSI") recognized that there are a number of challenges in port operations that have led to labour instability.  On the issue of wait time, TSI suggested that mandatory GPS systems would help with transparency and management in calculating wait time fees for truckers.  TSI stated that night gates would help address the issue of congestion in the areas outside the terminals.  TSI has disputed and continues to dispute the ability of the governments to implement wait times on public roadways.  Further, TSI provided the following response to the Questionnaire:

There are a number of causes of delays that are outside our control and normal operations. We would propose that wait time fees be waived for delays caused by non-operational delays: high winds; snow removal; medical emergency; hazardous spill; power interruptions; and CNR/CPR rail switching. However, we believe a number of operational causes of delay are TSI's responsibility, for which wait time fees should apply, including: machine/system breakdown; late dispatch; planning deficits; and ILWU lunch breaks and shift changes.

Finally, in regards to double and triple-ended moves, TSI proposed that 150 minutes should be allowed to complete double-ended moves, while 180 minutes should be allowed for triple moves.  TSI did not have a response to hourly rates and driver compensation for owner operators working in the drayage sector.

ii) DP World

On the issue of wait time, DP World suggested that companies be required to provide a certain percentage of double ended moves in order to qualify for the terminal gate efficiency fee.  Further, DP World provided the following in response to the Questionnaire:

Wait time should be measured from the time of arrival at the terminal pre-gate to the time of departure from the terminal out-gate.  All trucks should have a unique identification number that is connected in the system to the truck's license plate, driver's ID and the appointment number.  Data should be collected by PMV and shared with the terminals.  PMV and terminals system should be fully integrated and all appointments should be checked for early arrival at Port gates.

DP World suggested that moving to an hourly rate would cure many of the issues in the current system, but did not provide any opinions on the actual rates.

In response to questions of truck licenses and number of trucks in the system, DP World indicated that Service Level Agreements would assist the gateway and provided a copy of its Service Level Agreement used by DP World in Port Botany, Australia (See Appendix "B").

h) The Trucking Companies

Most of the companies that responded to the Questionnaire were of the opinion that the Joint Action Plan must be reconsidered by the stakeholders in the drayage sector.  Of the trucking companies that responded to the Questionnaire, some were very supportive of the hourly rate concept and some were very adverse to the hourly rate concept and advocated strenuously for per trip rate compensation.  Some companies that responded wanted to re-visit the rates and fuel surcharge components of the Joint Action Plan.  Some of the companies also suggested that a minimum call out fee of $200 could be required of the participants in the sector to address some of the drivers' wait time concerns.  The owner-operator hourly rates described by those in favour of the concept were nowhere near the hourly rates suggested by the UTA and Unifor.  The trucking company community is in favour of removing the moratorium that currently exists in the sector.

Two other interesting concepts emerged from the trucking company submissions:  the first was the concept of building Key Performance Indicators into any TLS reform.  The second was re-implementing Service Level Agreements between the terminals and the trucking companies that would allow triangulation and generate efficiencies throughout the sector.

6) Recommendations

We have been instructed by the BC and Federal Government to make recommendations to avoid future Port shutdowns. Our jurisdiction or guidance is found at point 14 of the Joint Action Plan, which reads:

The Province of British Columbia, the Federal Government, and Port Metro Vancouver agree that Vince Ready shall be seized to issue recommendations on all points in this action plan that will be reviewed, finalized and acted upon within ninety (90) days of a return to work.

That guidance was reiterated in the Ministers' letter of June 13, 2014:

A great deal has been accomplished over the past two months, such as increases to the rates to be paid to truckers.  However, we remain very concerned about the consistent application of these rates and will not hesitate to take action to ensure compliance with the Joint Action Plan.  As an immediate measure, the provincial audit program is being strengthened and targeted investigations are underway.

And more is to come.  We are pleased to announce that Mr. Ready will also continue his work for an additional 90 days to ensure progress continues and that necessary steps are taken to achieve long-term stability at the port.  More specifically, Mr. Ready will be asked to provide additional recommendations on further measures to address trucker remuneration including for off-dock container movements.  Any advice and recommendations made by Mr. Ready will be taken very seriously by our governments.

The Joint Action Plan was ambitious, but we are committed to ensuring Canada's busiest port and critical part of the Asia-Pacific Gateway is able to move marine containers efficiently and build on its global reputation for outstanding service to users.

With the above in mind, as well as the necessity to move the sector to a place of stability and greater transparency, our recommendations are follows.

The scope of our recommendations speak to those trucking companies and drivers in the drayage industry in the Lower Mainland of British Columbia that service the ports.  The recommendations are therefore limited to those companies that hold a license to service the port but capture such companies for both on and off dock container movements.

A. A Governing Agency

There is considerable support for a provincially regulated agency to oversee the many issues in the drayage sector.  Government Regulation would be required to establish the agency and its framework.  Given that we see it as the role of the Agency to issue licenses in the future, we see it critical that there is a mandatory requirement to belong to the Agency in order to obtain a license to operate to and from PMV.  We see the central functions of the agency to include the following:

  1. The licensing of trucks;
  2. The enforcement and setting of future driver rates (on and off dock), including fuel surcharge rates, in consultation with stakeholders, including representatives of the truck drivers and trucking companies;
  3. The evaluation of wait time fees;
  4. The container dispute resolution program and any additional dispute resolution process; and,
  5. Facilitate discussions regarding Service Level Agreements ("SLAs") between terminal operators, and trucking companies with the twin goals of better organizing driver work through the reservation systems as well as increasing the driver trips into PMV and hence increasing driver compensation.


     

    Further, and in addition to the above, the Agency could deal with issues such as:

     

  6. Facilitate stakeholder discussions regarding terminal reservations policy (including terminal wait time issues and night and weekend gates);
  7. Facilitate discussions with stakeholders respecting drayage governance and potential changes to the regulatory framework;
  8. Facilitate stakeholder discussions regarding such issues as:
    • how to address any future undercutting of rates,
    • the issue of the required number of trucking companies and drivers,
    • the moratorium on new licenses.

Importantly, the Agency as we see it would also establish a mechanism for ongoing communications with all industry stakeholders, including representatives of the truck drivers. These communications should be regular and ongoing with a view to discussing and addressing issues and implementing corrective measures in the drayage sector in order to avert the shut downs of PMV that have occurred in the past.

B. The Reservation System

As stated above, the mandatory appointment/reservation system has been in place since 2005 and there are currently four different systems in the Lower Mainland.  We understand that there is support for the concept of the reservation system, but we heard from trucking companies and truck drivers alike that there must be significant changes to the current reservation system in order for the sector to operate.  We were told by many stakeholders that it is essential that the reservation system is revamped.  The principal concerns that have been voiced regarding the present system(s) relate to issues of capacity, efficiency and appointment schedules.  Stakeholders reported that prior to the 2014 port shut down, attaining a reservation at a terminal was a free-for-all and the reservation structure served as an impediment to orchestrating double ended or triple moves.

As previously stated, in response to the Joint Action Plan and to addressing the accruing financial liabilities, the terminals adopted and implemented a Night Gate policy on July 1, 2014 coupled with a $50 daytime reservation fee.  We understand that a result of this Night Gate policy, a significant portion of trucking has moved to the night shift so as to avoid the $50 fee.  We are told by many drivers and trucking companies alike that daytime reservations are now underutilized.  Finally, we are also told that the reservation system is still being misused by some drivers.  Specifically, we have heard that some drivers are showing up well in advance of their reservation time or showing up without a reservation at all.

We strongly recommend that the current reservation system ought to be modified and/or overhauled to address and enhance better fluidity to and from the ports.  We understand that a new reservation system is being constructed and in the meantime, we strongly encourage the terminals to synchronize the existing systems (i.e., adopt the best system in effect today, which we understand to be DP World's reservation system) so that the systems are the same.  The future system should be coordinated between the terminals so that the entire drayage industry utilizes the same reservation system and the system should be managed in such a way that double ended moves or multiple container moves can be reserved by the trucking companies.

We also recommend that the terminals seriously engage in dialogue with the trucking companies with a view to shifting the reservation fee of $50.00 for the dayshift to either a flat fee of $25.00 for any container movement during the day or night; or, alternatively, splitting the fees so that the night shift is still encouraged (i.e., $30/day and $20/night).  We also encourage the terminals to seriously consider the number of reservations that are allotted during the day and/or the night shifts so that the day shifts are properly utilized by the sector.  Further, the terminals indicated that the daytime reservation fee of $50.00 was to recover the costs of operating additional hours.  We recommend that the terminals review annually or bi-annually with the Agency, once constituted, the Night Gate policy with a view of reducing the reservation fee associated with cost recovery for stakeholders in the future.

C. Wait Times

The issue of wait times was the most contentious issue prior to the dispute. The studies show that prior to the 2014 dispute, drivers were spending up to 50% of their time waiting or being processed at the port and it was clear that this factor alone was central to the cause of the 2014 disruption.

The Joint Action Plan negotiated on March 26, 2014 addressed the issue of wait times at Point 12 as follows:

  • …establish a mechanism for directing the Terminal Gate Efficiency Fee (i.e. Waiting Time Fee) to be paid to the trucking companies who will be required to pass the fee on to independent owner operators.  Starting seven (7) days after a return to work, the Terminal Gate Efficiency Fee (i.e. Waiting Time Fee) shall be paid at $50 per trip for time spent waiting at Port terminals (Deltaport, Fraser Surrey Docks, Vanterm, Centerm) after ninety minutes of waiting time.  At two hours of waiting time, an additional $25 fee will be paid per trip.  At two and a half hours of waiting time, an additional $25 fee will be paid per trip.  Each additional half hour will be paid at a rate of $20.  This waiting time shall begin to accrue from the designated points outlined below.
  1. Vanterm/Centerm – Waiting time shall be measured from the time of entrance to the time of exit from the Clark, McGill and the vehicle access control gate at Heatley entrances.
  2. Deltaport – A mechanism will be developed to identify time of entrance and exit to and from the terminal, and this will be measured at the last (current) overpass on the approach to Deltaport Way.
  3. Fraser Surrey Docks – Waiting time shall be calculated from the time of entrance to the time of exit from the entrance off of Elevator Road and Highway 17.
  4. The following two locations would require further analysis/discussion to clarify mechanics:

    1. CN Intermodal (Port Kells) – Waiting time shall be calculated from the time of entrance to the time of exit from the entrance off 96 avenue and Highway 17.
    2. CP Intermodal (Pitt Meadows) – Waiting time shall be calculated from the time of entrance to the time of exit from the entrance to CP's yard.

It is evident that a universal fundamental goal of all stakeholders in the industry should be to reduce the wait time for drivers at the terminals.  The drivers were expressing frustration over the long wait times prior to the 2014 disruption, but stakeholders were either indifferent to the drivers' concerns or unable to effect the necessary changes to address the concerns until the job action occurred.

We understand the motivation behind the language in Point 12 of the Joint Action Plan was to financially incent the terminal operators to reduce the wait times.  However, the mechanics of implementing the language in Joint Action Plan number 12 quickly became cumbersome and challenging.  The most challenging aspect of the language, in our opinion, was the trigger point from which the wait time should be measured.  The Join Action Plan outlines trigger points in public roadways which are impossible for the terminal operators to control and monitor.  It is our recommendation that the wait time calculations should be measured from the terminal pre-gate to out-gate to allow the terminal operators to better control and influence the wait times.  We also recommend that PMV implement a monitoring system so that drivers who arrive prior to the allowable reservation window will be turned away and wait time compensation would not accrue.

The parties to the Joint Action Plan negotiated wait times for the CN and CP Intermodals.  These intermodals have not been discussed at the Steering Committee Meetings in any detail nor have CN or CP participated in any discussions at the Steering Committee.  It is our belief that the mechanics of how to implement such wait times should be considered by the Agency, once constituted.  We are of the initial view that the Agency should explore whether Regulation would be necessary to deal with the wait times contemplated as well as the mechanics of such wait times at these locations. We recognize that we are suggesting changes to the Joint Action Plan which will impact the drivers.  However, in making this recommendation, we also suggest that the wait time window should be stricter than contemplated in the Joint Action Plan (i.e., 75 minutes instead of 90 minutes) and the payments greater (i.e., $50 per hour for owner operators as a flat rate for anything greater than 75 minutes).

We recommend that the wait time calculations should apply to non-operational delays.  The terminals should continue to assist in empty container inspections to assist drivers within the terminal in-gate and out-gate to move containers and resolve issues as quickly as possible.  Double ended moves, which should be a goal of the industry, should be less strict and time allotted to commence the wait time calculation should be less strict than contemplated in the Joint Action Plan (i.e., 150 minutes) and the payments at a similar flat fee after that time (i.e., $50 per hour flat rate).  Finally, we understand that the delays caused by trouble tickets are predominantly attributed to the trucking companies.  As such, it is our view that any wait times associated with trouble tickets should be paid by the trucking companies to the drivers at the same rates and for the same timeframes as the terminals.

Further to the above, we encourage dialogue between the trucking companies, the terminals and PMV to reduce trouble ticket issues in the industry.  We also encourage dialogue between the trucking companies, the terminals and PMV to address how to best facilitate double ended and triple moves and implement procedures to reduce driver wait times at the terminals.  We see this as a critical role of any future Agency to facilitate such dialogue on a regular and ongoing basis.  We appreciate that the wait times fees that we are recommending are different than those in the Joint Action Plan, and suggest that such changes are made as soon as possible.

With respect to payment of wait times, we further recommend the following during the interim period prior to the establishment of an Agency:

  • That moving forward, owner operators and company drivers paid on a per trip basis (together referenced as "per trip drivers") are paid for wait times in accordance with the above parameters.  The wait time calculations will be based on GPS data and compiled by PMV.  We recommend that PMV invoice the terminals and the trucking companies for the wait times owed on a monthly basis.  We recommend that the terminals provide funds owed to the per trip drivers through the trucking companies within 10 business days of receipt of such invoice and that the trucking companies pay the entire amount provided by the terminals to the per trip drivers upon receipt of such funds from the terminals with the drivers' next pay cheque.  We recommend that the trucking companies who are invoiced by PMV for wait times associated with trouble tickets pay such funds to the per trip drivers with the drivers' next pay cheque.

    We recommend this course of action on the condition and understanding that any payment made by the terminals to the GPS per trip drivers will not prejudice or impact the judicial review application or pending law suits and that no party may rely on these payments as part of any legal action.

  • No amounts of the waiting time fees should be kept by any organization or company for any reason and if administration or processing fees are deducted by any organization in association with wait time fees we recommend that PMV send out a clear message to stakeholders that deducting such fees is not acceptable and will be met with consequences.  Further to this, we recommend that such fees be subject to audit for all TLS companies.

D. Rates of Pay

As our starting point, we are of the view that all stakeholders in the industry were aware of the Joint Action Plan and the rates contained therein. We are of the view that any rates not paid in accordance with the Joint Action Plan to date are owed to drivers.

i) On-Dock

In 2005, the rates were set at $90 to $100 on August 1, 2006, as minimum trip rates to and from the port.  These rates were then undercut in many different ways, resulting in the 2014 dispute. In the end, the Provincial and Federal Government agreed to the provisions in the Joint Action Plan point number 2, which reads as follows:

The Government of Canada commits to take appropriate measures to increase trip rates by 12% over the 2006 Ready Rates.  The rates will take effect within 30 days of the return to work and will apply to all moves of containers (whether full or empty).  To make drivers whole for the interim period between 7 days following the return to work and the date the new rates take effect, a temporary rate increment will be put in place.

These rates shall be calculated on a round trip basis, and shall apply to all moves.  A mechanism will also be established to attach a benchmark minimum rate for all hourly drivers to the federal regulation.  The rate is anticipated to be initially instituted at $25.13 on hire and $26.28 after one year of service.  Recognizing that per-trip rates for hourly drivers are a concern of all parties, the issue of the prohibition of such rates shall be reviewed in accordance with paragraph #14.  Canada and B.C. further commit to put in place a new mechanism to ensure off dock trips (including within a property or between properties) are remunerated consistent with the revised regulated rates, and the Government of Canada will expedite its 2014 Regulatory Framework Review which will assess the current wage and fuel surcharge rates.

It is our view, after careful consideration that the on-dock rates in the Joint Action Plan should be paid in the industry by all trucking companies as a condition of license.  It is also our view that those companies that currently operate on an hourly rate may continue to do so, but subject to the provisions regarding the minimum daily rate recommendations below.

With respect to moving to hourly rates across the board in the industry, it is our opinion that the differences between what the drivers consider as an appropriate hourly rate is vastly different than what the trucking companies consider as an appropriate hourly rate.  As such, coming to an agreement on such rates would prove impossible at this time in the industry and in our opinion may lead to instability.

Although moving to a pure hourly rate concept has some initial attraction such as eliminating wait time; providing drivers with secure compensation; and synchronizing payment for both on and off-dock movements, it is an extremely contentious issue.  The suggested hourly rates ranged from the questionnaires and from stakeholder discussions from $20/hour to well in excess of $100 per hour, after premiums and overtime.  We also heard that the hourly rates for idle trucks could be different than the rates for operating trucks, because the operating costs were different.  We heard repeatedly from driver representatives that moving to an hourly rate would cure the undercutting issues, yet we have already heard of schemes whereby company owners have been told that the hourly rate could be negotiated, irrespective of any industry hourly rate.  Further, the Joint Action Plan did not speak to hourly rates for owner operators, so we recommend that if the Directors involved in the recommended Agency, once formed, see it as a necessary move for the industry, that a detailed costing analysis respecting the hourly rates or other rate structures be commissioned.

We readily accept that hourly rates benefit drivers when there is congestion at the ports.  On the other hand, drivers on trip rates (as long as they are not undercut) benefit when there is fluidity and double-ended moves in the movement to and from the port.  It is our hope that in implementing some of the measures discussed, stability and fluidity will be the norm for drivers and as such, allowing compensation by trip rates will yield a respectable wage for the drivers.  That said, we advocate a model whereby owner operators paid by the trip are paid a minimum call out rate of $300.00/day.  With this formula, all drivers, whether paid by the trip or paid hourly, are guaranteed this minimum call out rate when they are called for the day.  Under this model, drivers are guaranteed a minimum rate of pay but are compensated by trip rate or the hourly rate, if such rate is greater. 

This concept is based on the assumption that owner-operators would make themselves available for at least 4 continuous hours of work.  If owner operators cannot work for a minimum of 4 continuous hours, the call-out fee would be forfeited.  We are of the view that this model has considerable merit as it requires trucking companies to organize their fleets and drivers and it provides some protection to the owner operators in the industry, whether those owner operators are paid by the trip or the hour.

As for employee drivers paid on an hourly rate, we recommend that the hourly rates as negotiated in the Joint Action Plan are also regulated and paid by trucking companies and that all companies that employ employee drivers are subject to audit.  We further recommend that such regulation build in a mechanism for reviewing the rates moving forward.  We understand that some companies have provided employee hourly paid drivers with benefit packages in lieu of wages and recommend that such benefit packages are considered when hourly wage rates are audited to ensure that a comparable overall rate is paid to the drivers.  We recommend that any employee driver who is called into work is paid a minimum call out rate of 4 hours' pay, irrespective of hours worked.

There is one other group that are not addressed in the Joint Action Plan.  That is the group that consists of company drivers paid trip rates instead of hourly rates.  We observe that there is no consistency in the rates currently paid to this group and we understand that this group is relatively small in the sector.  We note that this issue has been identified as a contributing factor of undercutting in the industry and we fear that left unaddressed, it will continue to further undercutting.  Therefore, in order to bring more stability to the sector, we recommend a minimum benchmark of $40/trip and a minimum call out of $160/day for this group.  To be clear, this $40/trip is a minimum and is not intended to interfere with any superior arrangements that exist today with respect to trip rates for company drivers.  We recommend that if any existing trip rates are reduced as a result of this report, that the company be subject to sanctions.  This group would also be entitled to the wait time provisions as set out above.

We have heard from the BCTA as well as from a couple of individual trucking companies that the base rate in the Joint Action Plan for the fuel surcharge is wrong and should be re-based.  It is unfortunate that the fuel rates had not been amended or negotiated with drivers since 2005/2006 even though fuel prices were rising.  This lack of response regarding fuel costs, coupled with rate undercutting, resulted in driver frustration.  It was in this context and at the point that drivers had to walk off the job to attract the attention of trucking companies that the fuel surcharge rate was increased.  As such, we recommend that all companies pay the fuel surcharge rates to owner operators, as outlined in the Joint Action Plan and encourage ongoing dialogue between companies and drivers in order to avert such intervention in the future.  We recommend that all companies are subject to audit to ensure that such rates are being provided to drivers.  We also understand that some companies have bulk fuel cards and as a result drivers pay considerably less for fuel.  We strongly suggest that such factors are considered when fuel surcharge rates are audited to ensure that a comparable fuel rate is paid to the drivers.  Clearly, if drivers are not paying the going rate of fuel and receive a discount by way of bulk fuel cards, and companies can show the auditors that the fuel paid is comparable, then the spirit of the Joint Action Plan is fulfilled. 

An important aspect of the Joint Action Plan, and one that we support, is that trucking companies be prohibited from moving drivers from an hourly model to a trip rate model, depending on the day and/or circumstances.  We feel that it is important that drivers know whether they are employed with a company on a trip rate basis or an hourly rate basis and that such is clearly defined by the company at the outset of the relationship.  We recommend that a prohibition respecting employing hybrid hourly/trip rate drivers remain an important feature of the sector going forward. 

We sincerely remain concerned that undercutting and gamesmanship will continue in this industry.  In particular, we are concerned that, based on some of the scenarios presented to us over the course of the previous four months, companies and drivers will seek to find loopholes in the proposed wage system.  In order to address some of these loopholes, we recommend the following:

  1. That it will be considered a breach of the TLS license for any trucking company to require that an employee purchase a truck, trailer or any other equipment or that any employee purchase or assume any proprietary interest or obligations in the company's business as a condition of employment.  We recommend that any breach of this provision, result in a cancellation of the TLS license for a significant period of time and that the Agency have the authority to issue significant sanctions:  for example:  a license suspension for a minimum period of 1-3 months; and/or compensating affected driver(s) for lost wages, remuneration and interest; and/or or a significant monetary penalty (for example:  $10,000-$50,000 per infraction so required).
  2. That it will be considered a breach of the TLS license for any trucking company to require that owner operators sell their truck, trailer or any other equipment to the company and require the owner operator to become an employee as a condition of employment.  We recommend that any breach of this provision result in a cancellation of the TLS license for a significant period of time and/or compensating affected driver(s), and/or a significant monetary penalty.
  3. That it will be considered a breach of the TLS license for any trucking company to require a driver to misrepresent the time worked, the distance travelled or any monies paid as a condition of employment.  We recommend that any breach of this provision result in a cancellation of the TLS license for a significant period of time and/or compensating affected driver(s), and/or a significant monetary penalty.  Further, if any driver knowingly misrepresents his/her time contrary to the standards set in the National Safety Code, that they be subject to discipline, up to and including cancellation of TLS license and/or monetary penalties.  To be clear, if drivers participate in breaching National Safety Code hours, they are expected to contact the Whistleblower line or be subject to individual sanction(s) along with the trucking companies.
  4. That it will be considered a breach of the TLS license for any trucking company to require a driver or drivers to forfeit the minimum call out pay or deduct any wait time fees as a condition of employment.  We recommend that such action could result in a cancellation of the TLS license for a significant period of time or a significant monetary penalty.  Further, we recommend that the Agency be provided with the authority to review any administrative deductions levied by trucking companies against drivers and issue penalties, if warranted.
  5. That it will be considered a breach of the TLS license for any trucking companies to withhold payment to drivers for more than 3 weeks' pay and ideally, we would recommend holdbacks of 2 weeks' pay.  Additionally, that it will be considered a breach of the TLS license for any trucking company to withhold any monies owed to owner operators upon termination of employment and to drivers, if such monies are withheld in a manner inconsistent with the Employment Standards Act

ii) Off-Dock

The off-dock moves at present are not regulated in any form.  It is clear that driver compensation is one of the main issues with off-docking.  Additional trip legs to off-dock locations are often made independently and under no regulations and/or specifications between the trucking company contracting for the driver's services.  Further, there are a multitude of off dock facilities and many container trucking companies do not operate to/from the ports and focus primarily or solely on off-dock movements.  The true challenge with respect to off docks is the sheer magnitude of the number of off dock facilities coupled with the number of trucking companies that have drivers pick up and drop off containers at the off docks.

As there is a lack of regulations and processes in place for off-dock locations, the rate of pay for off-dock moves is sporadic and cannot be simplified to one number, but we heard that undercutting is most rampant off dock.  We heard that the rates of pay vary for off dock moves from $15/move to up to approximately 50% of the trip rates.

We begin with the belief that clear regulations are needed to support and address both on and off-dock rates.  We have come to the conclusion that the off dock rates as negotiated in the Joint Action Plan are very problematic.  The Joint Action Plan fails to address the definition of what encompasses "off dock" moves and there are a number of situations where the trips are very short or within a property, and trucking companies have asserted that paying the Joint Action Plan trip rates for such moves will put them at a competitive disadvantage or out of business.  Indeed, after the announcement of the Joint Action Plan a number of stakeholders moved to alternative modes of transit, such as break bulk and rail.  We are in tune with the need to have the drayage sector remain competitive and the Joint Action Plan as a template for off dock moves is, in our opinion, detrimental to the industry as a whole.

After considerable research and stakeholder discussions, we have come to the conclusion that the best means of capturing off dock trips would be through a time/distance benchmark matrix for both empty and loaded containers.  As a flat rate, any empty or loaded containers must be paid a minimum of $50 for trips within properties or for any container moves less than 5 km.  Beyond that minimum flat rate for very short distance moves, we are persuaded that the following container drayage off dock pay rates be implemented by way of Regulation for those companies registered with the Agency for container moves greater than 5km:

CONTAINER DRAYAGE – OFF DOCK PAY RATES
From/To Abbotsford/Clearkbook Annacis Island Burnaby North Burnaby South Chilliwack/Sardis Cloverdale Coquitlam Delta North/Tilbury Ft Langley/Aldergrove Haney/Maple Ridge Langley City Langley South
West Van 150 125 120 120 155 135 120 130 145 144 140 145
Vancouver 140 115 110 110 145 125 115 120 135 130 130 135
Surrey South 120 115 120 120 120 110 115 110 115 130 115 110
Surrey North 125 115 115 115 135 110 110 110 115 130 115 115
Richmond South 125 115 120 120 140 125 120 110 130 135 125 125
Richmond North 130 110 115 115 145 125 115 115 135 130 130 130
Pt Moody/Pt Coquitlam 135 120 115 115 130 120 110 120 130 115 125 125
Port Kells 120 120 120 120 125 115 115 120 115 130 110 110
Pitt Meadows 120 130 120 120 125 125 115 125 135 110 135 135
Pacific Hwy 115 120 130 135 120 110 125 115 115 135 115 120
North Van 145 120 115 115 150 130 120 125 140 135 135 120
New Westminster 135 110 115 110 135 115 110 115 125 125 120 135
Mission 110 140 130 130 115 125 125 125 120 110 120 120
Langley South 110 120 130 130 125 115 125 120 115 120 110 100
Langley City 115 125 125 125 120 110 120 120 100 125 100 110
Haney/Maple Ridge 115 135 125 130 120 130 120 125 125 100 125 120
Ft Langley/Aldergrove 110 120 125 125 115 115 125 125 100 125 110 115
Delta North/Tilbury 120 110 130 120 130 115 115 100 125 125 120 120
Coquitlam 130 115 110 115 135 120 100 115 125 120 120 125
Cloverdale 125 120 120 120 125 100 120 115 115 130 100 115
Chilliwack/Sardis 110 135 140 140 100 125 135 130 115 120 120 125
Burnaby South 130 115 110 100 140 120 115 120 125 130 125 130
Burnaby North 135 120 100 110 140 120 110 130 125 125 125 130
Annacis Island 130 100 120 115 135 120 115 110 120 135 125 120
Abbotsford/Clearbrook 100 130 135 130 110 125 130 120 110 115 115 110
CONTAINER DRAYAGE – OFF DOCK PAY RATES
From/To Mission New Westminster North Vancouver Pacific Hwy Pitt Meadows Port Kells Pt Moody/Pt Coquitlam Richmond North Richmond South Surrey North Surrey South Vancouver West Vancouver
West Van 145 125 110 140 135 135 130 120 125 125 135 115 100
Vancouver 135 115 110 130 125 125 120 110 115 120 125 100 115
Surrey South 130 115 130 110 125 115 120 120 115 110 100 125 135
Surrey North 130 110 125 115 120 110 115 115 115 100 110 120 125
Richmond South 140 115 120 120 130 125 125 110 100 115 115 115 125
Richmond North 135 110 115 125 125 120 120 100 110 115 120 110 120
Pt Moody/Pt Coquitlam 120 115 125 125 110 120 100 120 125 115 120 120 130
Port Kells 130 115 130 120 125 100 120 120 125 110 115 125 135
Pitt Meadows 115 120 130 130 100 125 110 125 130 120 125 125 135
Pacific Hwy 130 120 140 100 130 120 125 125 120 115 110 130 140
North Van 140 120 100 140 130 130 125 115 120 125 130 110 110
New Westminster 130 100 120 120 120 115 115 110 115 110 115 115 125
Mission 100 130 140 130 115 130 120 135 140 130 130 135 145
Langley South 120 135 120 120 135 110 125 130 125 115 110 135 145
Langley City 120 120 135 115 135 110 125 130 125 115 115 130 144
Haney/Maple Ridge 110 125 135 135 110 130 115 130 135 130 130 130 140
Ft Langley/Aldergrove 120 125 140 115 135 115 130 135 130 115 115 135 145
Delta North/Tilbury 125 115 125 115 125 120 120 115 110 110 110 120 130
Coquitlam 125 110 120 125 115 115 110 115 120 110 115 115 120
Cloverdale 125 115 130 110 125 115 120 125 125 110 110 125 135
Chilliwack/Sardis 115 135 150 120 125 125 130 145 140 135 120 145 155
Burnaby South 130 110 115 135 120 120 115 115 120 115 120 110 120
Burnaby North 130 115 115 130 120 120 115 115 120 115 120 110 120
Annacis Island 140 110 120 120 130 120 120 110 115 115 115 115 125
Abbotsford/Clearbrook 110 135 145 115 120 120 135 130 125 125 120 140 150

Notes: B Trains – Full Rate on the first loaded can, and 50% on the second loaded can. This includes two cans hauled at the same time.

TLS Reform

The TLS was introduced in 1999 as a requirement to enter the terminals.  It was revised in 2008 to amend the original system and add additional safety and environmental standards and to impose sanctions against those who display behaviour that does not meet those standards.  The current TLS has a dual system that includes separate licenses for Full Service Operators and permits for Independent Operators servicing the port.

A host of stakeholders told us that a change to the current TLS is required.  We know that PMV has been working on TLS reform and has engaged in stakeholder consultation meetings on future TLS reform.  We encourage that such meaningful consultation process continue, with the ultimate goal of transferring the TLS system to the Agency.  We also encourage stakeholders, including terminal operators and trucking companies, to share relevant data in the consultation process.  It is our recommendation that the TLS functions ultimately fall under the auspices of the proposed Agency. 

That said, we do not see it as necessary to hold off implementing the TLS reform while the Agency is being constituted and we recommend that PMV and other stakeholders continue with TLS reform analysis and implementation with the goal of providing a finished or nearly finished product to the Agency. To be clear, we strongly recommend that the TLS reform consider the opinions and recommendations of all affected stakeholders and that meaningful consultation occur between PMV and the stakeholders on this issue as soon as possible.  In our opinion, the TLS reform must include mechanisms to address:

  • Security deposits and/or performance bonding;
  • An analysis of truck performance standards;
  • Mandatory GPS units, which was expeditiously implemented by PMV over the previous few months;
  • An analysis of environmental standards;
  • Establishing criteria for suspending or terminating truck licenses as well dispute resolution parameters and jurisdiction;
  • Evaluating the utility or necessity of the moratorium in its current  form;
  • Addressing truck company accountability; and,
  • Considering and potentially implement efficiency targets.

It is universally felt that because of the low barrier to entry in the drayage industry, there is an oversupply of trucks, even with the current decline in owner operators.  With approximately 2,000 truck and licences/permits in the system, it is felt by many that there is an enormous oversupply of trucks.  Prior to the recent work stoppage, the trip rate drivers worked longer hours and were paid less than hourly rated drivers.  However, it is clear to us that with increased fluidity at the ports/terminals, the drivers on trip rates have a greater opportunity to enhance their income providing the congestion at the ports is cleared up.  As stated above, the feeling is that there needs to be a significant reduction in the number of trucking companies and trucks.  One way of achieving this goal is to impose requirements on TLS participants, such as security deposits or performance bonds as well as implementing reasonable and legitimate truck performance standards and efficiency goals.  Another way of achieving this reality is through service level agreements ("SLA") which can work in tandem with any TLS reform and which we will outline as a concept below as a final recommendation.

E. Dispute Resolution and Audit Processes

The current process of dispute resolution establishes an auditing system covering non-union companies with owner operators.  The present auditing is part of the TLS compliance measures as well as the MOA from the 2005 dispute.  A very contentious point in the industry centers around the fact that a large number of companies are not captured by the present program parameters.  This fact, in the view of a number of the stakeholders, contributed to the undercutting of the 2006 rates.  Finally, it is widely reported by trucking companies that the present system is cumbersome and slow.

We are of the view that the audit process and dispute resolution process should be part of the proposed Agency and captured by Regulation.  The audit system should continue to address the systemic issues in the industry.  As such, we strongly recommend that all trucking companies that hold a TLS license shall be subject to random and specific audits.  We also recommend that the remedies available to the auditors to recommend be augmented to allow for financial penalties to be levied against trucking companies for non-compliance in addition to license suspensions/terminations.

We also received a favourable response to the notion of an expedited dispute procedure.  We see such a dispute resolution process as working both independent of and in conjunction with the Whistleblower policy. This expedited process would provide another avenue, apart from the current Whistleblower and audit processes for drivers to lodge a complaint.

This alternative avenue would allow drivers to bring forward individual complaints in an expeditious manner, regarding both rates and fuel and should also deal with complaints against undercutting of rates and for fuel.  This process would have to be captured by Regulation and ideally should provide the adjudicator(s) with the necessary jurisdiction to find fault and grant appropriate remedies (compensation and/or sanctions).  We propose that such Regulation would allow for a process separate and apart from the audit process that could require the following:

  1. complaints lodged by a truck driver through the Whistleblower mechanism or other means would be referred to expedited adjudicators;
  2. the complainant would be required to provide details of the complaint (i.e., non-payment of rates) and any related documents respecting the claim to the Agency in order to schedule an expedited hearing.  The claim and relevant documents would be provided to the adjudicator in advance of the hearing;
  3. hearings would be prescheduled with the expedited adjudicators on set dates (i.e., monthly);
  4. each party would have a brief amount of time (ie: up to 60  minutes) to present their case after which the adjudicator would render a binding award within 5 days of such a hearing, unless otherwise consented to by the parties;
  5. the award of the adjudicator would be enforceable by the licensor.

It is a widely held view that drivers who come forward to report a non-payment, undercutting, or kickbacks are fearful about losing their jobs or suffering other negative employment consequences.  We recommend that this reality, whether it be real or perceived, be addressed through Regulation and we propose that such Regulation provide meaningful avenues for the auditors and/or the expedited adjudicator(s) to impose the strictest of penalties in the face of evidence of retaliation or retribution.

F. Service Level Agreements

Finally, we want to address and expand on the principles of the SLAs as we have heard a number of well-informed submissions on this matter.  We also understand that many international ports operate with SLAs in place and that such SLAs require both trucking companies and terminals to find efficiencies in the container movement process. 

We read with interest the SLA provided to us by DP World through its submission and we believe that a properly structured, generic, accessible SLA between interested trucking companies and terminals will have the value of:

  1. Improving fluidity of moving trucks in and out of the ports in Vancouver;
  2. Enhancing efficiency; hence more trips and resulting in increased income for drivers on trip rates;
  3. Controlling and improving the reservation and dispatch systems
  4. Significantly decreasing wait times both at the terminals and in the trucking yards;
  5. Providing a guaranteed number of double ended moves;
  6. Right sizing the number of trucking companies and drivers over time; and,
  7. Ensuring the proper payment of drivers for trip rates, hourly rates and fuel charges.

It was our hope that during the period of our engagement we could encourage the stakeholders to participate in a generic pilot project with some of the trucking companies.  It was also our hope, and our recommendation, that at least 8-10 trucking companies would express an interest in participating in an SLA pilot in the sector for a set time period (i.e., 3-6 months) to track and assess the value of SLAs to the ports in British Columbia.  The Agency, once constituted, could then be thoughtfully considered and the SLAs be amended, or abolished, if the concept proves ineffective for the Lower Mainland in British Columbia.  It was our initial thoughts that either the number of truck turns or other criteria that would demonstrate that the trucking company was a good corporate citizen in the drayage sector, could serve as a basis to offer the opportunity to participate in such a pilot.  We attach a draft of the concept that has been discussed with the terminals as a generic agreement for such a pilot project [see Appendix "B"].

The pilot could not be implemented, because some stakeholders were hesitant to engage in the pilot while the Joint Action Plan was being assessed and our recommendations were pending.  We believe that once our recommendations are issued, it would be in the best interest of the efficiency and stability of the sector to consider running such a pilot.

7) CONCLUSION

In conclusion, we would be remiss if we did not thank the many stakeholders who have taken time to provide us with valuable insight into the many aspects of the drayage industry throughout the Lower Mainland of British Columbia.

The drayage industry is a vital part of British Columbia's economy.  Our mandate from the governments and clause 14 of the Joint Action Plan was to fashion recommendations to give effect to the Joint Action Plan and, more importantly, to help stabilize this industry going forward.  We have attempted to achieve those mutual goals.

We observe going forward there remains challenges and opportunities.  The Agency we have proposed will be challenged with creating meaningful dialogue with all stakeholders in the industry.  The Agency and stakeholders will be challenged with dealing with issues as they arise and executing the necessary changes from time to time in order to ensure continued stability and viability of the industry.  We trust that our recommendations will assist in achieving those goals.

Vincent L. Ready
Corinn Bell

APPENDIX "A" – Joint Action Plan – Trucker Work Stoppage at Port Metro Vancouver

In recognition of the concerns voiced by container truck owner/operators, the work stoppage that has gone on for four weeks and the resulting severe impacts on the national economy, the Government of Canada, the Province of British Columbia and Port Metro Vancouver have collectively agreed to an action plan and expect an immediate and full return to work. Those who choose to continue this work stoppage will jeopardize their opportunity to provide drayage services at Port Metro Vancouver in the future.

  1. Immediately upon resumption of normal trucking operations, Port Metro Vancouver will rescind licence suspensions where no criminal charges have been laid against any driver or operator by the police.  Port Metro Vancouver will also dismiss without any legal costs its legal action in the Federal Court against the United Truckers Association ("UTA") (Action #S-141964) at the expiry of the interlocutory injunction issued in that action on March 11, 2014. Port Metro Vancouver further agrees not to commence any further action against Unifor or UTA or its members arising out of any activities of Unifor or UTA or its members that precede the resumption of normal trucking operations.
  2. The Government of Canada commits to take appropriate measures to increase trip rates by 12% over the 2006 Ready Rates. The rates will take effect within 30 days of the return to work and will apply to all moves of containers (whether full or empty).  To make drivers whole for the interim period between 7 days following the return to work and the date the new rates take effect, a temporary rate increment will be put in place. These rates shall be calculated on a round trip basis, and shall apply to all moves.  A mechanism will also be established to attach a benchmark minimum rate for all hourly drivers to the federal regulation. The rate is anticipated to be initially instituted at $25.13 on hire and $26.28 after one year of service.  Recognizing that per-trip rates for hourly drivers are a concern of all parties, the issue of the prohibition of such rates shall be reviewed in accordance with paragraph #14.  Canada and B.C. further commit to put in place a new mechanism to ensure off dock trips (including within a property or between properties) are remunerated consistent with the revised regulated rates, and the Government of Canada will expedite its 2014 Regulatory Framework Review which will assess the current wage and fuel surcharge rates.
  3. The Province of British Columbia commits to engage unions and their certified employer companies on the importance of achieving renewal collective agreements and will ensure access to mediation if both parties agree to its use.
  4. As per the current federal regulation, upon return to work the fuel surcharge multiplier will be amended from 1% to 2% which will result in a 14% fuel surcharge immediately upon a return to work.  This fuel surcharge must be paid to owner operator drivers without exception and this will be enforced through increased and regular provincial audits.
  5. The Province of British Columbia will strengthen the scope of the audit function so that all trucking companies registered in the trucking licensing system for local drayage will be subject to regular audits conducted in a transparent manner and penalties for rate violators shall be severe and shall include cancellation of licenses for companies and individual drivers. The scope of the audit program will be expanded to include union and non-union drivers and "off dock" movements. The province and Port Metro Vancouver will work with the industry to define the parameters of the audit program, with full implementation by June 15, 2014.
  6. Whistleblower Mechanism:  Port Metro Vancouver and the province will work together to provide a mechanism for the reporting of concerns related to compliance with trucking licensing system requirements (including compensation provisions) or incidents of intimidation or harassment related to container drayage activity. The new mechanism will allow for direct input to the provincially delivered audit program and will be in place no later than June 15, 2014.
  7. Port Metro Vancouver will begin a consultation period with trucking industry stakeholders on the restructuring of the trucking licensing system with the intent to implement initial reforms by June 15, 2014. The goal of the new system is to create a more stable trucking industry and it is contemplated initial steps will include:
    1. Greater accountability on trucking companies to comply with rate and employment agreements;
    2. Licence charges on trucking companies which will be used to fund the modified licensing system and enhanced compliance regime (on a cost recovery basis) as well as contributions to GPS and optimization technology;
    3. Implementation of a security deposit or bonding program for trucking companies; and
    4. Control over the total number of licensed trucks to avoid a surplus and support the goals of this action plan.
  8. Terminals and Port Metro Vancouver will announce, for rapid implementation, an extended-hours pilot project by March 31, 2014 that will be responsive to volume forecasts. Key elements of the pilot project are:
    1. Shippers will have the ability to nominate which terminals would have extended hours on which days informed by Port Metro Vancouver forecasts;
    2. There will be a forum for consultation on the proposed schedule which will include Port Metro Vancouver shippers and terminals;
    3. Below a threshold (proposed: 60%) terminals will be entitled to compensation for unrecovered costs;
    4. A risk / cost sharing formula will be developed and implemented by Port Metro Vancouver in consultation with shippers and terminals; and
    5. Compensation will be tied to terminal performance during extended hours.
  9. Immediately, the Terminal Gate Compliance Fee will be waived when excessive delays are encountered at a terminal.
  10. The Government of Canada and Port Metro Vancouver will expedite the roll out of the next phase of the GPS project to outfit the balance of the trucking fleet with GPS technology. To be completed between May and September 2014.
  11. Port Metro Vancouver in consultation with terminals and trucking stakeholders, will implement an enhanced common reservation system by January 2015 to address concerns related to the current reservation system.
  12. Port Metro Vancouver will establish a mechanism for directing the Terminal Gate Efficiency Fee (i.e. Waiting Time Fee) to be paid to the trucking companies who will be required to pass the fee on to independent owner operators.  Starting seven (7) days after a return to work, the Terminal Gate Efficiency Fee (i.e. Waiting Time Fee) shall be paid at $50 per trip for time spent waiting at Port terminals (Deltaport, Fraser Surrey Docks, Vanterm, Centerm) after ninety minutes of waiting time.  At two hours of waiting time, an additional $25 fee will be paid per trip.  At two and half hours of waiting time, an additional $25 fee will be paid per trip.  Each additional half hour will be paid at a rate of $20.  This waiting time shall begin to accrue from the designated points outlined below.
    1. Vanterm / Centerm – Waiting time shall be measured from the time of entrance to the time of exit from the Clark, McGill and the vehicle access control gate at Heatley entrances.
    2. Deltaport – A mechanism will be developed to identify time of entrance and exit to and from the terminal, and this will be measured at the last (current) overpass on the approach to Deltaport Way.
    3. Fraser Surrey Docks – Waiting time shall be calculated from the time of entrance to the time of exit from the entrance off of Elevator Road and Highway 17.
    4. The following two locations would require further analysis / discussion to clarify mechanics:
      1. CN Intermodal (Port Kells) – Waiting time shall be calculated from the time of entrance to the time of exit from the entrance off of 96 avenue and Highway 17.
      2. CP Intermodal (Pitt Meadows) – Waiting time shall be calculated from the time of entrance to the time of exit from the entrance to CP's yard.
  13. A steering committee will be formed immediately following the return to work and will consist of representatives from the unionized and non-unionized trucking community, the terminals, Port Metro Vancouver, Transport Canada and the Province of British Columbia to be chaired by Transport Canada. The steering committee will monitor implementation of all commitments in the Joint Action Plan and share the results on a regular basis with all stakeholders.
  14. The Province of British Columbia, the Federal Government, and Port Metro Vancouver agree that Vince Ready shall be seized to issue recommendations on all points in this action plan that will be reviewed, finalized and acted upon within ninety (90) days of a return to work.
  15. Unifor and the UTA agree to an immediate return to work based upon the above and acceptance by Canada and British Columbia.

Appendix “B” – Carrier Access Agreement – DP World Sydney

Carrier Access Agreement - DP World Sydney Port Botany Terminal can be found on the DP World website.

Footnotes

Footnote 1

Asia Pacific Gateway, Skills Table, "Understanding Container Drayage Owner-Operators in Metro Vancouver – Summary Report" (July 2013) at 12 [Asia Pacific Gateway, "Understanding Drayage"].

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Footnote 2

Colledge Transportation Consulting Inc., "Metro Vancouver Container Drayage Costs – 2014" (22 February 2014).

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Footnote 3

Port Authorities Operations Regulations (SOR/2000-55) ["Regulations"]; Canada Gazette, "Regulations Amending the Port Authorities Operations Regulations" (April 3, 2014), online: Government of Canada < http://www.gazette.gc.ca/rp-pr/p2/2014/2014-04-23/html/sor-dors86-eng.php>.

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Footnote 4

Port Metro Vancouver, "Common Reservation System" (March 28, 2014); Asia Pacific Gateway Skills Table, "Understanding Container Drayage Owner-Operators in Metro Vancouver – Summary Report" (July 2013).

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Footnote 5

Asia Pacific Gateway, Skills Table, "Labour Force Profile – Port Drayage Drivers in Metro Vancouver" (May 2013) at 55, Appendix D.

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Footnote 6

Colledge Transportation Consulting Inc., "Metro Vancouver Container Drayage Costs – 2014" (22 February 2014) at 2.

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Footnote 7

Colledge Transportation Consulting Inc., "Metro Vancouver Container Drayage Costs – 2014" (22 February 2014) at 2.

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Footnote 8

Colledge Transportation Consulting Inc., "Metro Vancouver Container Drayage Costs – 2014" (22 February 2014) at 9.

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Footnote 9

Asia Pacific Gateway, Skills Table, "Labour Force Profile – Port Drayage Drivers in Metro Vancouver" (May 2013) at 8-11.

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Footnote 10

The Tioga Group, "Empty Container Information System (ECIS) – Concept of Operations Draft Final Report" (16 December 2013) at 13.

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Footnote 11

Colledge Transportation Consulting Inc., "Metro Vancouver Container Drayage Costs – 2014" (22 February 2014) at 4.

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Footnote 12

Asia Pacific Gateway, Skills Table, "Labour Force Profile – Port Drayage Drivers in Metro Vancouver" (May 2013) at 17.

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Footnote 13

Asia Pacific Gateway, Skills Table, "Labour Force Profile – Port Drayage Drivers in Metro Vancouver" (May 2013) at 19.

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Footnote 14

Asia Pacific Gateway, Skills Table, "Labour Force Profile – Port Drayage Drivers in Metro Vancouver" (May 2013) at 10.

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Footnote 15

Asia Pacific Gateway, Skills Table, "Labour Force Profile – Port Drayage Drivers in Metro Vancouver" (May 2013) at 11.

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