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Southern Railway of British Columbia

In January 2010, the Southern Railway of British Columbia (SRY) initiated service from the new Annacis Rail Marine Terminal, located on the Fraser River on the southern shore of Annacis Island. The new facility provides Vancouver Island and Coastal BC short sea shippers with direct access to four railroads.

Project Description

The Annacis Rail Marine Terminal, operated by the Southern Railway of British Columbia (SRY), is located on Annacis Island, in Delta, BC. It includes a barge docking berth and a ramp capable of handling railcars and roll-on/roll-off truck trailers.

Built at a cost of $11 million, including $4.6 million in funding from the Asia Pacific Gateway and Corridor Initiative, the terminal is intended to facilitate short sea shipping. This investment in short sea shipping has already started to ease traffic congestion, reduce fuel use, shipping costs and greenhouse gas emissions and increase overall transportation efficiency in the Lower Mainland of British Columbia.  From the new terminal, SRY connects to Canadian National (CN), Canadian Pacific (CFCP), Burlington Northern Santa Fe (BNSF) and Union Pacific railway lines (Figure 1).

The Annacis Rail Marine Terminal provides a link between short sea shipping, rail and truck transport and deep sea shipping.  Product that would otherwise move via truck is delivered by railcar to the rail barge ramp, increasing the efficiency of transportation.  The shift from truck to rail transfer reduces emissions and traffic congestion.

Short Sea Shipping in Canada

Short sea shipping is the use of marine vessels for local freight movement.  Although prevalent on the west coast of Canada, it exists to some extent at all port locations.  Examples include iron ore movements from the Quebec North Shore to the Great Lakes and the transfer of goods in and around Vancouver Island.  Although not a new form of freight transportation, it is receiving renewed interest as a way of reducing road traffic congestion and associated greenhouse gases. Figure 2 shows existing and potential short sea shipping routes for western coastal British Columbia.

Benefits

Short sea shipping has the potential to reduce fuel use and emissions by reducing truck transportation.  Where ports are located in urban areas, a decrease in trucking can reduce highway congestion, accidents and noise.  Marine transportation is known to be more fuel-efficient than trucking.  However, marine engines tend to be replaced less often than truck engines and therefore there are less frequent opportunities for acquiring engines that are leaders in terms of fuel efficiency and emission standards.

 

Obstacles to Short Sea Shipping

The reorganization of land transportation required for the Annacis Rail Marine Terminal highlights the importance of having good land-to-sea connections.  Where short sea shipping involves trade with the United States, there are security and crew nationality issues that complicate marine freight transportation.  Even for trade within Canada, there may be pilotage fees or regulations that need to be considered.  In addition, there may be labour laws and union rules suited to large, deep water container facilities that could cause complications for smaller marine operations.  Last, in most parts of Canada, navigational challenges posed by ice in winter must be considered.

Benefits of Annacis Rail Marine Terminal

The feasibility studies for the Annacis Rail Marine Terminal identified a number of potential benefits, including:

• Container throughput capacity increase on the south shore of Burrard Inlet resulting from closing the BNSF Railway barge facility and freeing rail slots estimated at 39,000 twenty-foot equivalents (TEUs) per year.
• Freeing train slots for access to/from terminals located on the south and north shores of Burrard Inlet that serve Canada’s Asia-Pacific trade.
• Freeing land that could be developed to support infrastructure expansion and sustain trade growth.
• Improved market access for short sea shippers due to direct connection and competitive access to four Class I rail carriers, as opposed to the previous single connection.
• Improved road safety by reducing truck traffic on local roads.  The estimated benefits are a potential reduction of about one collision a year and 1.2 victims a year by 2034.  This translates into approximately $2.4 million net present value in collision reduction benefits.
• Reduction in emissions from trucks.  The CO2 reduction is expected to be 1,530 tonnes per year once a more comprehensive network of short sea shipping facilities is in place.
• Eventual removal of approximately 14,000 container truck trips a year from the Alex Fraser Bridge.
• Eventual diversion of some 2,000 railcar loads a year, or about 150 railcar loads/month, containing regulated commodities from the densely populated downtown waterfront area and rail corridor.  This traffic would shift to other predominantly industrial areas in the region near Annacis Island.

First Year Results

Despite coming into operation amidst a global economic downturn, the Annacis Rail Marine Terminal handled nearly 3,000 railcar loads in its first full year of operation.  Several new business opportunities have been attracted to short sea shipping as a result of the new terminal:

• Shipments of utility poles for Stella-Jones: Outbound shipments from Courtenay to various North American destinations have already begun with the 2011 volume projected to be 80 railcars.  This is expected to result in removing an annualized 540 one-way truck trips.
• Shipments of latex for Catalyst Paper: Shipments are now going directly to Nanaimo for transloading to the Port Alberni mill, compared with the previous transloading operation in Vancouver and trucking to Vancouver Island, with the 2011 volume projected to be 100 railcars.
• Others: SRY is working to increase the frequency of service between Annacis Rail Marine Terminal and Vancouver Island as the basis for developing other business opportunities. Several factors have impacted SRY’s progress in this area, including lower market freight rates that do not support a multi-modal service at this time.

One of the new customers reports: “Our company benefits from the new Annacis Rail Marine Terminal in several ways. With a local service provider, we see greater flexibility in the operation to suit our needs, not only for routine sailings, but also for emergency situations.”

There were no Roll-on/Roll-off trailer customers in 2010. This was attributed to a number of factors, mainly persistently low competing trucking rates, additional time required to secure licensing for truck staging and truck access rights across private lands.

During the first year of operation, modifications were made to the ramp and rail switches to handle larger rail/truck loads.  This is expected to increase traffic in the future.

Shipments at Annacis Rail Marine Terminal have enhanced intermodal connectivity and efficiency in Greater Vancouver.  Rail operating costs have been reduced. Twenty-one weekly train movements have been reduced for BNSF and one train each for CN and CP.

Lessons for Other Short Sea Shipping Centres

The economic downturn coincided with the terminal opening and therefore results in the first year of operation were below those forecasted in the feasibility studies.  It is obvious that continual effort is needed to reach full operational capacity and this will take time.  The construction of this project was substantially completed in eight months, but significant advance planning planing and consultation was required.  Aboriginal, environmental and fisheries matters required consideration.  Some delays were attributed to getting insurance, completing final modifications and negotiating agreements with other parties.

Next Steps

SRY representatives believe that freight volume will continue to increase in the next few years as the company develops the rail barge business with the new terminal in place and seeks to improve the frequency of marine services in conjunction with its sister company, Seaspan Ferries.

SRY will continue to seek to attract new freight traffic to its Annacis Rail Marine Terminal and measure results.  As a more comprehensive network of short sea shipping facilities in the Lower Mainland is developed in the future, the full environmental, social and economic benefits of short sea shipping will be achieved.

Date modified:

2012-02-17

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