STANDARDS RELIABILITY COMMUNICATION ACCESS DRAYAGE PORT METRO VANCOUVER TRUCK LICENSING SYSTEM ACCOUNTABILITY RESERVATIONS NOVEMBER 2015 PERFORMANCE

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1 ACCOUNTABILITY TRANSITION STANDARDS EFFICIENCY PERFORMANCE RELIABILITY SMART FLEET ACCESS RESERVATIONS DRAYAGE COMPLIANCE COMMUNICATION PORT METRO VANCOUVER TRUCK LICENSING SYSTEM Long Haul Trucking Consultation Report NOVEMBER 2015 Prepared by: Lucent Quay Consulting Inc. Suite West Hastings Street Vancouver, BC V6B 1P1

2 Consultation Summary Report Long Haul Truck Licensing System November 2015 This independent report of findings, including data entry and analysis of all consultation input received, was prepared by Lucent Quay Consulting Inc. (Lucent Quay) for Port Metro Vancouver. Port Metro Vancouver will consider the results of this consultation program along with ongoing technical analysis and dialogue with provincial and federal agencies in finalizing the new long haul Truck Licensing System. The opinions and suggestions included in this report are those of the consultation participants and not Lucent Quay. PORT METRO VANCOUVER LONG HAUL TRUCK LICENSING SYSTEM Consultation Summary Report REPORT 10 November 2015 Lucent Quay Consulting Inc. 688 West Hastings Street, Suite 430 Vancouver, BC V6B 1P1

3 Table of Contents Consultation Summary Report Long Haul Truck Licensing System November 2015 Executive Summary... iii 1. Overview About this Report TLS History Consultation Process Overview Notification Stakeholder Meeting Summary of Input Key Themes of Input Summary of Written Feedback Next Steps Consultation Materials Meeting Notes Written Feedback i

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5 Executive Summary History of Long Haul Truck Licensing System Reform Consultation Summary Report Long Haul Truck Licensing System November 2015 This report presents the findings of consultation undertaken in October 2015 regarding long haul operators accessing Port Metro Vancouver's container terminals. A total of 16 companies participated through a consultation meeting and feedback. This represents approximately 53 percent of all long haul operators currently licensed in the Truck Licensing System (TLS) system. Port Metro Vancouver's TLS reform was designed to enable a number of key outcomes and operating principles established as part of the Smart Fleet Trucking Strategy. These changes are intended to deliver long-term stability to the drayage sector with fewer local drayage trucks and more efficient, financially invested trucking companies. The local drayage component of Port Metro Vancouver s new TLS program came into effect in February This component of the TLS program was developed based on consultation undertaken in spring and fall 2014, which included participation from some long haul operators. Since the implementation of TLS reform, the local drayage sector has benefited from improved service consistency, quality and operating standards, productivity and transparency and accountability. The new TLS requirements also reduced the number of local drayage companies and trucks authorized to access the Port. Currently, 98 local trucking companies have been approved for access under the new program. Under the new long haul component of the TLS program, company licenses will be replaced with Access Agreements between approved companies and Port Metro Vancouver. Each Access Agreement will authorize a trucking company to access Port facilities with a defined number of specific trucks, driven by company drivers, sponsored owner-operators or a combination of the two. Owner-operators will no longer be required to maintain a TLS Independent Operator Permit, but will now be granted Port access privileges by means of a sponsorship agreement. The jointly signed and executed sponsorship agreement is between the sponsoring company and the owner-operator. Port Metro Vancouver will approve the sponsorship application and related truck. Individual Port Pass identification requirements remain unchanged. Consultation on the long haul component of the TLS program focused on aspects of TLS reform that are relevant to long haul operators including the definition of a long haul container move, a proposed balanced scorecard, and some specific elements of the long haul Access Agreement. Consultation identified general understanding and support for TLS reform, support for some elements of the long haul definition, and general acceptance with the concept of an Access Agreement. Participants expressed concerns with the "same driver" component of the definition for several reasons, including reasons outside of the operators' control and made suggestions for changes to assist in mitigating these issues. With respect to the balanced scorecard, most participants did not see significant value for themselves but also did not have concerns with Port Metro Vancouver using such a system as long as it was not used to restrict the number of long haul operators accessing the Port. Some participants expressed concerns about the proposed Access Agreement charge, particularly those who visit the Port infrequently. iii

6 Consultation Summary Report Long Haul Truck Licensing System November 2015 The revised schedule for transition to the new long haul component of the TLS program is as follows: Program Component Date Consultation October 13 27, 2015 Consultation Summary Report November 9, 2015 (targeted) Application Intake November 30 December 23, 2015 Application Processing December 29, 2015 January 30, 2016 New Long Haul TLS in effect February 1, 2016 Balanced Scorecard TBD future implementation Key Findings Participants generally supported some of the underlying concepts of the proposed long haul TLS Policy including: Beyond the Lower Mainland in the long haul definition. Specific and undisturbed marine container in the long haul definition with the suggestion to include unless opened by an enforcement official, or similar phrase. Method of remuneration remains unchanged in the long haul definition. Low level of interest in balanced scorecard for long haul, but no concerns about it being implemented, provided that it does not require a lot of additional work. Participants expressed concern about, and in some cases strong opposition to, specific aspects of the program including: Long haul companies are strongly opposed to same driver in the definition due to a number of factors outside of their control, including: o Marine container terminal truck gate operating hours o Terminal reservation availability o Changes in earliest receiving dates (ERDs) o Vessel delays o Customs and border delays o Safety concerns and meeting the NSC regulations (i.e. maximum hours of driver service) Concerns over the Access Agreement charge, specifically for those companies that access the Port infrequently. Local drayage companies, who were also invited to provide comments via written submissions, expressed concerns about how the long haul changes could affect the local companies and requested that long haul operators be required to meet the same standards identified for local operators. iv

7 Report Organization Consultation Summary Report Long Haul Truck Licensing System November 2015 Section 1 of this report provides the overview and context for proposed long haul TLS reform and the consultation process, as well as participation levels. Section 2 summarizes the consultation process while Section 3 summarizes key themes of the consultation session and follow up written submissions. Finally, Section 4 outlines proposed next steps to incorporate consultation input, finalize the new long haul TLS Policy and program and advance implementation. v

8 1. Overview Consultation Summary Report Long Haul Truck Licensing System November About this Report This report presents the findings of consultation undertaken in October 2015 regarding long haul operators accessing Port Metro Vancouver's container terminals. A total of 16 companies participated through a consultation meeting and feedback. This represents approximately 53 percent of all long haul operators currently licensed in the Truck Licensing System (TLS) system TLS History Port Metro Vancouver's TLS reform was designed to enable a number of key outcomes and operating principles established as part of the Smart Fleet Trucking Strategy. These changes are intended to deliver long-term stability to the drayage sector with fewer local drayage trucks and more efficient, financially invested trucking companies. The local drayage component of Port Metro Vancouver s new TLS program came into effect in February This component of the TLS program was developed based on consultation undertaken in spring and fall 2014, which included participation from some long haul operators. Since the implementation of TLS reform, the local drayage sector has benefited from improved service consistency, quality and operating standards, productivity and transparency and accountability. The new TLS requirements also reduced the number of local drayage companies and trucks authorized to access the Port. Currently, 98 local trucking companies have been approved for access under the new program. Under the new long haul component of the TLS program, company licenses will be replaced with Access Agreements between approved companies and Port Metro Vancouver. Each Access Agreement will authorize a trucking company to access Port facilities with a defined number of specific trucks, driven by company drivers, sponsored owner-operators or a combination of the two. Owner-operators will no longer be required to maintain a TLS Independent Operator Permit, but will now be granted Port access privileges by means of a sponsorship agreement. The jointly signed and executed sponsorship agreement is between the sponsoring company and the owner-operator. Port Metro Vancouver will approve the sponsorship application and related truck. Individual Port Pass identification requirements remain unchanged. Consultation on the long haul component of the TLS program focused on aspects of TLS reform that are relevant to long haul operators including the definition of a long haul container move, a proposed balanced scorecard, and some specific elements of the long haul Access Agreement. Consultation identified general understanding and support for TLS reform, support for some elements of the long haul definition, and general acceptance with the concept of an Access Agreement. Participants expressed concerns with the "same driver" component of the definition for several reasons, including reasons outside of the operators' control and made suggestions for changes to assist in mitigating these issues. With respect to the balanced scorecard, most participants did not see significant value for themselves but also did not have concerns with Port Metro Vancouver using such a system as long as it was not used to restrict the number of long haul operators accessing the Port. Some participants expressed concerns about the proposed Access Agreement charge, particularly those who visit the Port infrequently. 1

9 Consultation Summary Report Long Haul Truck Licensing System November Consultation Process 2.1. Overview Port Metro Vancouver adopted a consultation program to seek stakeholder input in support of developing the long haul component of the new TLS program. The consultation process in October 2015 included seeking feedback on the proposed long haul TLS framework to finalize the details needed to transition to the new contractual Access Agreement. Consultation activities and materials included: Discussion guide Stakeholder meeting and webinar submissions Copies of the supporting consultation materials including the presentation deck and discussion guide are available in Appendix A Notification Stakeholders were notified of engagement opportunities by a combination of personal invitations and public postings. These included: October 13, Notice of launch of the upcoming consultation sent by to the TLS local carriers and stakeholders. October 13, Invitations to TLS approved long haul carriers for stakeholder meetings, sent by . October 16, Information regarding long haul consultation posted to Port Metro Vancouver s website ( October 16, Reminder notice sent by to the long haul TLS database to RSVP Stakeholder Meeting Port Metro Vancouver hosted one consultation meeting with the identified key stakeholder groups as detailed in the table below. The meeting included a local TLS update by Port Metro Vancouver staff, followed by a facilitated discussion during which the two key components of the long haul TLS reform were discussed. These include the long haul definition and long haul balanced scorecard. Participants were invited to provide feedback throughout the meeting and submit additional written comments through . 2

10 Consultation Summary Report Long Haul Truck Licensing System November 2015 Stakeholder Meeting Date Participation Long haul trucking companies (in person) October companies, 16 participants Long haul trucking companies (webinar) October 21 6 companies BC Trucking Association October 21 1 participant 3. Summary of Input 3.1. Key Themes of Input Key themes of input about the proposed long haul TLS reform are summarized in the table below. These represent overarching themes of input received. The meeting notes during the stakeholder meeting are attached in Appendix B. CONSULTATION THEME INPUT SUMMARY Long haul definition: Beyond the Lower Mainland Support this part of the definition. Long haul definition: Specific and undisturbed marine container Strong agreement by everyone, with suggestion to adjust definition to include unless opened by enforcement official, or similar phrase. Long haul definition: Same driver Concern about the operational implications of same driver costs as some containers may sit for two days. Issues include: o o o Limited opportunities for access to marine container terminals with flat racks and over dimension (OD) cargo, Marine container terminal truck gate operating hours, Arrival of reefers, flat racks and OD outside of terminal truck gate hours. Suggestion that the definition be modified to allow for using a highway driver and local driver pick-up/ drop-off, as long as all are drivers for the same company. Flat racks Suggestion that flat racks be exempted from the BC Container Trucking Act. Request to modify definition as standard marine container. 3

11 Consultation Summary Report Long Haul Truck Licensing System November 2015 CONSULTATION THEME INPUT SUMMARY Reservations Questions about why reservations are required for long haul (did not used to be required). Suggestion that long haul carriers be exempt from the reservation requirement at marine terminals. Unpredictability at the border crossings causing delays is an issue. Long haul definition: Method of remuneration remains unchanged Low level of concern, but some suggestion that if all drivers are employees, it should not matter. Balanced scorecard performance standards Low level of interest in balanced scorecard for long haul, but no concerns about it being implemented, provided that it does not require a lot of additional work for the companies. Most considered this a non-issue for long haul; however, some questioned its need if it is not being used to select a maximum number of long haul carriers and concern that in the future it may be used to restrict the number of authorized long haul carriers. General consensus that long haul companies are very different so comparisons would not be as applicable as for local companies. Port Metro Vancouver will re-address once the balanced scorecard is issued for the local carriers. Access agreement charges General agreement that the charge is too high for long haul, given that most long haul carriers visit the Port infrequently (perception that the rate is unfairly high and not based on cost recovery). Many companies would prefer per diem charges to access Port (long haul does not access the Port as often as local carriers) Summary of Written Feedback During the consultation period, Port Metro Vancouver received 11 written submissions, which are included in Appendix C and summarized here: CONSULTATION THEME INPUT SUMMARY Long haul definition: Beyond the Lower Mainland Long haul definition: Specific and undisturbed marine container Support for this part of the definition. Support for this part of the definition, subject to inspection by authorities. 4

12 Consultation Summary Report Long Haul Truck Licensing System November 2015 CONSULTATION THEME Long haul definition: Same INPUT SUMMARY Low support for this part of the definition due to: driver Marine container terminal truck gate operating hours and subsequent closures (i.e. Saturday, Sunday, holidays) - a different driver is required to deliver the container to the terminals once open. National Safety Code (NSC) Regulations hours of service/ driving hours, a driver cannot drive from Alberta to Vancouver and legally spend another 3-4 hours delivering a container to the Port. Vessel Delays often results in containers requiring storage in a local yard for a few days before being delivered to the terminal. Changes in earliest receiving dates (ERDs) may cause a long haul container to be stored in the Lower Mainland. The same driver cannot be expected to wait to transport a container from the Lower Mainland location to its final destination when the ERD is changed by one or more days. This would reduce the driver's productivity, may interfere with hours of service compliance and, in the case of an owner-operator, could result in reduced compensation and for the driver to be away from home for longer than necessary. May face unforeseen delays caused by such things as weather, customs inspections, congestion at border crossings, road closures, or inability to obtain convenient terminal truck gate reservations. Driver hours of service regulations may then prohibit the driver from transporting the container to a marine container terminal or operational circumstances may require the driver to leave the Lower Mainland prior to final delivery of the container to a marine container terminal. Equipment breakdowns or problems involving the original driver, such as a medical emergency, may result in a different driver and tractor having to transport the container part-way from its origin. Team drivers are commonly used in long haul operations. Therefore, the "same driver" will not be able to complete the entire trip since the intent of team drivers is to allow for uninterrupted travel by allowing both drivers to operate the vehicle. Reduced travel time buffer to account for weather and road closures and delays. Suggestion of 24 hour access to the Port; this could alleviate some of the issues with drivers being able to complete the last leg of the trip. Difficult for larger fleets with diverse services to be able to logistically plan the entire container movement around the same driver. Sites (e.g., mining sites, LNG constructions sites, etc.) provide access based on safety orientation or security screening and it is not possible to have every driver certified with every site access in 5

13 Consultation Summary Report Long Haul Truck Licensing System November 2015 CONSULTATION THEME INPUT SUMMARY Canada or the US; even if the same driver hauled the container from Vancouver to its destination city, there a significant chance a local driver would have to complete the final leg into the customer site. Cost concern with hiring a third party to deliver loads and impact ability to meet the customer delivery expectations. Flat racks Draft definition of a long haul move does not fully take into account all the special considerations that impact the long haul industry and more specifically flat deck and over dimension cargo moves. Special considerations for appointments and scheduling for flat racks and all OD shipments. This would include being able to deliver within the Lower Mainland to be transferred or reduced to meet compliance with CVSE/ NSC regulations. Reservations Difficult to book a reservation that coincides with arrival in the Lower Mainland. Booking an appointment three to five days in advance for a one hour window is unrealistic for the same driver to complete. Prior to TLS reform, marine terminals provided Highway Bypass protocols to assist carriers due to the uncertainty of achieving time specific appointments. The Bypass protocol worked efficiently for all parties. Request for long haul bypasses for actual long haul truckers, (e.g. trucks operating in Alberta, Saskatchewan and Manitoba) which should be considered true long haul, not just as far as Chilliwack or Hope. Suggestion of a $50 charge. "Same driver" effects could be partially addressed by eliminating the reservation requirement for long haul containers given that the wait time penalties were only intended to be paid to drivers of locally licensed companies. If the threat of wait time penalties for terminal operators does not apply in these circumstances, terminals may be more willing to accept long haul containers without reservations. Long haul definition: Method of remuneration remains unchanged Few long distance carriers compensate drivers with the same method of remuneration for the whole trip, including time spent waiting, loading or unloading at a marine container terminal. A common model for these drivers would be paid hourly for time spent waiting, loading or unloading at a marine container terminal, and per km/mi for distance during driving time. 6

14 Consultation Summary Report Long Haul Truck Licensing System November 2015 CONSULTATION THEME INPUT SUMMARY Access agreement charges, licensing fees, damage deposit The proposed annual agreement cost is excessive in comparison to other ports in North America. Suggest a $100/150 entry fee charged per load. Per truck access agreement charge is too high for those accessing the Port once or twice per week. Request for clarification on the damage deposit amount. The damage deposit for a trucking company should be determined based on their safety record at the Port. If the definition includes using same driver for the entire trip, then the cost structure is extremely high. Under this same driver definition a long haul truck will access the Port one to two times per week compared to 20 to 30 times for a local truck. Suggest significant reduction of fee due to the infrequent access to Port property compared to a local truck. Damage deposits should not be required since Port Metro Vancouver has other means to secure payment if and when necessary. Licenses Suggestion that Port Metro Vancouver not try to manage supply of the long haul container trucking sector through limiting the granting of licenses or related truck tags. Licenses should be issued to any long haul company that meets the license requirements. Licenses should not be required for trucking companies transporting out-of-gauge, flat rack or any other non-standard container that requires specialized equipment either for loading or unloading or face restricted hours at marine container terminals. 7

15 Consultation Summary Report Long Haul Truck Licensing System November 2015 CONSULTATION THEME INPUT SUMMARY Other definition suggestions Long haul is: the direct transport of a laden or empty marine container directly between the Port of Vancouver to a point beyond the Lower Mainland or vice versa. The Lower Mainland is defined to be the area, which extends from Horseshoe Bay BC, South to the Canada/ US border and East to the boundary of Hope BC. The point of origin of an Export and the final point of destination of an Import laden marine container determine the definition of Long Haul for TLS purposes. Long Haul containers must be moved undisturbed in the original container, using a driver whose method of remuneration remains unchanged throughout the entire trip and excludes any movement of a container which is subject to the Container Trucking Act, SBC 2014, chapter 28. A long haul company is one whose moves involve the transportation of marine containers whose contents remain sealed and undisturbed except by officials who are authorized to examine their contents) from a marine container terminal to a point beyond the Lower Mainland or vice-versa. To the extent that these moves are not direct is due to circumstances outside the control of the long haul company. Drivers involved in the transportation of these containers are all employees or owner-operators of the company. 8

16 Written input from Local drayage companies Consultation Summary Report Long Haul Truck Licensing System November 2015 CONSULTATION THEME INPUT SUMMARY General Changing the current long haul system may have unintended effects on local drayage companies. Presently approved FSO Licensees that perform local TLS that also operate in the long haul sector should not be required to pre-qualify in the initial application process. Reference to their current operating approvals and entry requirements including safety and environmental standards has already been met as per their approval as an FSO licensee for local. Concern over accurately monitoring highway traffic, which opens the door to cheating and rate cutting. Companies seeking TLS long haul access should be required to meet the standards that were identified for local as well as provide a business case that supports the application for long haul access. Individual sponsorship agreements jointly signed by the sponsoring company and the owner-operator must apply to long haul as it does for local. Suggestion that Port Passes are required for all long haul approved applicant drivers. Suggestion to add tags to the current fleets to help prevent unrest amongst the already underworked truckers. Concern with issuing new TLS licenses, as there are already too many licenses and trucks presently in the system. Bypass Concern about rate cutting when a non-tls trucking company is given a bypass to pick up oversized loads, with no expenses or a reservation fee. GPS Addition of GPS to gather data on how many times a month each long haul truck accesses the Port and the turn times being experienced. This is important data because a long haul driver has limitations on hours of service and if wait times are excessive additional costs are incurred for lost truck/driver productivity etc. These times would be valuable to determine if Access Agreements should be looked into. 9

17 Consultation Summary Report Long Haul Truck Licensing System November 2015 CONSULTATION THEME INPUT SUMMARY Licensing fees, damage deposit Concern over high licensing fees, which could lead to an unfair competitive pricing advantage to long haul carriers between shorter distant locations that are able to haul multiple containers per week. Damage Deposit should be the same as local, $10,000 for all. There is no rational for the damage deposit to be less for long haul. If a carrier is already operating as an approved local FSO, the damage deposit already on file should cover both the local and long haul deposit respectively. The FSO should not have to pay an additional Damage Deposit if one is already on deposit with Port Metro Vancouver. Truck age transitions 10-year truck age transition standards that were applied for local should be used for long haul. Equal standards must apply. 4. Next Steps The new long haul TLS Policy is scheduled to take effect on February 1, 2016, and will coincide with expiry of existing long haul TLS licenses and permits across the current drayage fleet. With this in mind, Port Metro Vancouver has been actively reviewing interim results from this consultation to assist in making timely changes to the new long haul TLS Policy. These changes will be documented in Port Metro Vancouver s Input Consideration Memo, which will respond to the input received, and is scheduled for release the week of November 16, Port Metro Vancouver will also release a long haul TLS Handbook that will provide interested applicants with the program information and application forms to submit a complete application package for consideration. This handbook will be sent to existing long haul TLS-licensed trucking companies the week of November 30, Port Metro Vancouver will then begin reviewing applications to ensure application packages are fully compliant. 10

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19 Consultation Materials Consultation Summary Report Long Haul Truck Licensing System November 2015 The discussion guide and the presentation from the consultation are included. 12

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21 ACCOUNTABILITY TRANSITION STANDARDS EFFICIENCY PERFORMANCE RELIABILITY SMART FLEET ACCESS RESERVATIONS DRAYAGE COMPLIANCE COMMUNICATION PORT METRO VANCOUVER TRUCK LICENSING SYSTEM Long Haul Trucking Consultation: October 2015 Participant Discussion Guide Prepared by: Lucent Quay Consulting Inc. Suite West Hastings Street Vancouver, BC V6B 1P1

22 Port Metro Vancouver is Canada s largest and busiest port, a dynamic gateway for domestic and international trade and tourism, and a major economic force that strengthens the Canadian economy. Port Metro Vancouver s overall vision is to lead the growth of Canada s Pacific Gateway in a manner that enhances the well-being of Canadians and inspires national pride. Our mission is to be recognized as a world-class gateway by efficiently and sustainably connecting Canada with the global economy, inspiring support from our customers and from communities locally and across the nation. A key goal in support of our vision and mission is to be a world leader in supply chain competitiveness and sustainability. Port Metro Vancouver s Smart Fleet Strategy supports this goal. What is Smart Fleet? Port Metro Vancouver s Smart Fleet Strategy is designed to deliver a long-term sustainable drayage sector, and contribute to our vibrant local economy and a healthy environment. Smart Fleet includes four key initiatives: GPS tracking on all Lower Mainland domiciled port-approved trucks to generate better information Common data interface and a single point of entry and reservation system connecting trucking companies to all container terminal operations Drayage Model to support decision-making for planning and new initiatives New Truck Licensing System (TLS) to improve stability by working with a drayage sector that can meet financial and operational obligations. TLS also includes environmental and pending truck age requirements to lower air emissions and increase community confidence, safety, dependability and industry stability About This Consultation Port Metro Vancouver seeks input from long haul trucking companies to assist in developing new TLS opportunities and requirements for this sector of the drayage business. This process builds on consultations in 2014 to help develop the local drayage component of the TLS program, which included participation from some long haul operators. Our goal is to develop the long haul component of the TLS program that recognizes the unique nature of long haul operations, while generally being consistent with the local drayage component of the TLS program that came into effect February This consultation focuses on input from long haul operators; however, input received from other groups will be considered. The consultation process includes: Facilitated meetings, by invitation, with long haul trucking company representatives Notification to key trucking sector stakeholders and local TLS carriers from whom submissions will be accepted Consultation closes on October 27,

23 Introduction to TLS Reform The local drayage component of Port Metro Vancouver s new TLS program came into effect in February The local drayage component of the TLS program was developed based on consultation undertaken in the spring and fall 2014, which included participation from some long haul operators. TLS reform enabled a number of key outcomes and operating principles established by Port Metro Vancouver for our Smart Fleet Strategy. These changes are intended to deliver long-term stability to the drayage sector with fewer local drayage trucks and more efficient, financially invested trucking companies. Since the implementation of TLS reform, the local drayage sector has benefitted from improved service consistency, improved quality and operating standards, improved productivity and improved transparency and accountability. The new TLS requirements also reduced the number of local drayage companies and trucks authorized to access the port. Currently, 98 local trucking companies have been approved for access under the new program. Under the new long haul component of the TLS program, company licences will be replaced with Access Agreements between companies and Port Metro Vancouver. Each Access Agreement will authorize a trucking company to access port facilities with a defined number of specific trucks, driven by company drivers, sponsored owner operators or a combination of the two. Owner operators will no longer be required to maintain a TLS Independent Operator Permit, but rather will now be granted Port access privileges by means of a sponsorship agreement, jointly signed and executed by the sponsoring company and the owner operator and approved by Port Metro Vancouver. Individual Port Pass requirements remain unchanged. Progress Update Transition to the new TLS program for local drayage carriers began in December Applications for the new TLS were fully reviewed and Access Agreements were in place with 67 companies when the new TLS took effect on February 1, By provincial legislation, a new B.C. Container Trucking Commissioner s office was also established to oversee rate enforcement and matters related to truck licensing for local drayage. It was anticipated that the local component of TLS reform would be complete by early spring However, following a judicial review, an additional 31 companies entered into Access Agreements with Port Metro Vancouver after February 1, As a result, consultation regarding the long haul component of TLS reform was delayed and in July 2015, Port Metro Vancouver extended all existing long haul licences and permits that were set to expire at the end of July The revised schedule for transition to the new long haul component of the TLS program is as follows: Consultation October 13-27, 2015 Consultation Summary Report November 9, 2015 Application Intake November 30 December 23, 2015 Application Processing December 29 January 30, 2016 New Long Haul TLS in effect February 1, 2016 Following consultation, Port Metro Vancouver will finalize the new eligibility requirements referred to in this Discussion Guide and commence the application process for the new long haul component of TLS. Applications will initially be open only to the long haul companies with currently approved TLS Licences. Port Metro Vancouver intends to invite new long haul carriers to apply after completing the application, review and related transition process for those of the initial companies that are 2 successful. 2

24 Proposed TLS Reform Framework Key Components The following section outlines the new TLS framework. In this phase of consultation, we are seeking feedback on the framework outlined below, and input on some remaining TLS reform long haul components to help finalize the details needed to transition to the new long haul Access Agreement. Definition of Long Haul o The Long Haul Access Agreement will allow the holder to access Port lands only for the purpose of long haul container moves. The Access Agreement will also require holders to comply with all Statutes and Regulations, including the B.C. Container Trucking Act (the Container Trucking Act ), which prohibits prescribed local container movements without a licence granted by the B.C. Container Trucking Commissioner s office in addition to holding a Port Metro The draft definition of a long haul move is: Vancouver local Access Agreement. o An accurate and clear definition of long haul moves will facilitate an understanding of what moves are permitted and prohibited under the Access Agreement for all trucking companies. The direct transportation from a Marine Container Terminal to a point beyond the Lower Mainland or vice versa, of a specific marine container and its undisturbed, originally sealed content, using the same driver whose method of remuneration remains unchanged throughout the entire trip, and excludes any movement of a container which is subject to the Container Trucking Act, SBC 2014, chapter 28. Access Agreement Charge o The charge is calculated based on cost-recovery for operations and administration that encompasses the TLS program, port accessand a limited audit process to ensure compliance with the Access Agreement s prohibition against undertaking local moves. We are specifically seeking feedback on this definition. o The minimum Access Agreement charge per year is $6,450. This charge applies to companies applying for approval of three to five trucks. For every additional truck added to the fleet above five trucks, the charge will increase by $1,290 per truck. o The charge is similar to that established for local drayage. However, costs related to GPS tracking and provincial licensing costs, which are not applicable to long haul, have been removed. Specifically, proposed long haul charges include: Item Approximate % of Total Program Costs Port Operations 71% Efficiency Improvement Initiatives* 10% Ongoing System Maintenance and Support 5% Land Lease Opportunities 14% *Averaged over five-year period Entry Standards o Consistent with current practice, a minimum of three trucks per long haul company is required to qualify for application. These trucks can be made up of company trucks, sponsored owner operator trucks or a combination of the two. Companies claiming less than 3 trucks under their expiring TLS licence may increase their fleet by adding new trucks to meet the current minimum of three. o Acceptance of applications will be based on minimum entrance requirements including safety and environmental standards, TLS record, and acceptance of Access Agreement terms. 3

25 Maximum Truck-Model Age o In addition to Port Metro Vancouver s environmental requirements, Port Metro Vancouver also introduced a new truck-model age requirement for local TLS trucks. The same maximum truck age requirement will apply to long haul trucks. The new 10-year truck age requirement will become effective January 1, o The new truck age requirement supports a professional, reliable and stable drayage sector along with our long-standing goal to be a gateway recognized for its economically, environmentally and socially responsible operations. o Existing Port Metro Vancouver environmental requirements (implemented in 2008) continue to apply and take precedence until the maximum 10 years truck age requirement is in full effect in Damage Deposits o Agreement holders will be required to provide and maintain a refundable Damage Deposit ranging from $2,100 up to a maximum of $10,000 depending on fleet size, as a means of providing a minimum benchmark of fair and reliable cost recovery amounts for both tangible and intangible losses incurred by Port Metro Vancouver, such as replacement and repair costs for damages to Port property and staffing costs related to delays caused by incomplete or missing paperwork. o This deposit must be replenished in the event it is drawn upon. o In the future, when applying for a new Access Agreement, the amount may be negotiable, depending on the company s TLS compliance record. A Drayage Balanced Scorecard o A balanced scorecard approach will be used to evaluate companies for the purpose of negotiating and/or entering into future Access Agreements. o At this time Port Metro Vancouver does not anticipate using the Balanced Scorecard to limit the number of long haul trucks accessing the port. o Companies will have access to their own Balanced Scorecard and to aggregate sector-wide information but not to other companies information. We are specifically seeking feedback on potential Balanced Scorecard metrics. A sample developed for local drayage will be displayed during consultation. Owner Operators Sponsorship o Owner operators will no longer be required to have individual Port Metro Vancouver issued TLS permits. However, consistent with current practice, they will still require sponsorship by a trucking company with an Access Agreement. o The sponsoring trucking company and the owner operator will be required to co-sign a Joint Sponsorship Agreement which, upon approval by Port Metro Vancouver, will grant the sponsored owner operator access to port lands. o An approved trucking company can use either employee-driven company trucks, sponsored owner operator trucks, or a combination of the two. o Truck owners (sponsored owner operators and Access Agreement holders) will no longer have to pay a separate, Approved Truck Fee. o Trucks newly added under all Access Agreements are required to have their VINs validated upon first access to the Port and a TLS new master decal applied to the windshield of the truck 4

26 For Discussion and Input While many aspects of the TLS Reform are complete, some elements are still being considered, as discussed in each module below. 1. Long Haul Definition For the purposes of authorized access to Port Metro Vancouver s marine container terminals, Long Haul will be defined in the Access Agreement as: The direct transportation from a marine container terminal to a point beyond the Lower Mainland or vice versa, of a specific marine container and its undisturbed, originally sealed content, using the same driver whose method of remuneration remains unchanged throughout the entire trip, and excludes any movement of a container which is subject to the Container Trucking Act, SBC 2014, Chapter 28. This definition includes several important terms: o Beyond the Lower Mainland this term reflects moves beyond the scope of the Container Trucking Act and regulations. o Specific and Undisturbed marine container these terms are used to distinguish container moves that have a direct, long haul destination from moves destined for local sites or off-dock and repackaging facilities, which are subject to the Container Trucking Act. o Same Driver to make it clear that moves using a local driver for the final leg become subject to the Container Trucking Act and not approved under the long haul Access Agreement. o Method of Remuneration the method of remuneration can be hourly, by the kilometer, or other, but must apply throughout the trip, as a shift in the method of remuneration indicates a break in the trip, rendering the final leg a local move subject to the Container Trucking Act. Inclusion of the definition is designed to bring greater clarity and consistency for drivers and trucking companies currently licensed as Long Haul operators, and potential future long haul carriers. Please consider and comment on each of the four elements of the long haul definition identified above 2. Balanced Scorecard The following are the performance standards currently being considered: o Compliance history o Average age of fleet o Safety compliance (NSC standing, WCB or equivalent, etc.) o Operational performance metrics (feedback on Balanced Scorecard) A similar Balanced Scorecard has been developed for local drayage TLS participants to provide an understanding of how performance standards will be tracked and reported. An example Balanced Scorecard for local drayage will be displayed during consultation. 5 Please consider what performance elements are most important to you as well as any comments or questions you have about the list of proposed elements above.

27 For Information and Feedback 1. Truck Age Transition o In February 2015, Port Metro Vancouver introduced new maximum truck age requirements. A ten year rolling truck age requirement was established in support of Port Metro Vancouver s focus on long-term safety, social and environmental sustainability, and industry stability through continued investment. This will ensure that by 2022, all trucks in the TLS system meet the rolling 10-year old truck model age requirement. 2. Entry Standards To help improve safety, quality and operating standards for a reliable and professional drayage sector, the TLS Reform includes clearly defined entry and performance standards. These standards include a requirement for a minimum of three trucks per trucking company to qualify for application review, proven ability to meet the Access Agreement terms, and the company must meet or exceed safety and Port Metro Vancouver s environmental requirements. Trucking companies will also be evaluated based on their past TLS record. To measure and track performance standards, the Balanced Scorecard will be applied. Strategies to support entry and performance standards include: o For the purposes of TLS reform, only existing, currently approved TLS long haul licence holders in good standing in good standing may apply at this time. o Compliance with Access Agreement terms (e.g. contract charges, insurance requirements, damage deposit, etc.) o Existing Port Metro Vancouver environmental standards o National Safety Code (NSC) compliance and safety standards Please provide your comments, if any, on the entry standards. 3. Minimum Number of Trucks Port Metro Vancouver proposes to keep the current minimum of three trucks. Long Haul companies currently licenced with fewer than three trucks in TLS may increase their fleet by adding new trucks that meet the current minimum truck requirements at the time of application. Please provide your comments, if any, on the minimum number of trucks. 6 6

28 4. Damage Deposit/Pre-Estimate of Liquidated Damages The Damage Deposit is intended to be a means of providing a minimum benchmark of fair and reliable cost recovery amounts for both tangible and intangible losses incurred by Port Metro Vancouver, such as replacement and repair costs for damages to Port property and staffing costs related to delays caused by incomplete or missing paperwork. Examples of such damages are: o Gate Arm or Rail Control damage o Tow truck rental for a container truck o Crane truck to remove container from chassis o Security personnel in the event that a truck requires security of flagging and traffic management (e.g. broken down truck) o Delays at the entry gates Alternative arrangements may be considered during future access agreement negotiations, based on a company s performance (i.e. if a company has no or a small number of infractions, the damage deposit could be lower, while if a company has had several infractions, it could be higher). Please provide your comments, if any, on the proposed damage deposit. Thank you for your input. Please submit comments on or before October 27, For more information or to provide feedback, please contact: w: portmetrovancouver.com/truck e: tls.reform@portmetrovancouver.com 7

29 Long Haul Truck Licensing System (TLS) Consultation October 2015 portmetrovancouver.com

30 Agenda Welcome and introductions 10 mins Agenda and discussion process 5 mins Update on local TLS 10 mins Long haul definition 30 mins Balanced Scorecard 15 mins Feedback items 10 mins Next steps and closing remarks 10 mins 2

31 Local TLS update

32 Long haul definition

33 Long haul definition discussion topics: Is this part of the definition clear to you? Does the definition reflect your company s current status/practice? How do you think this part of the definition will affect the long haul industry, if at all? Other questions or comments? portmetrovancouver.com 55

34 Long haul definition The direct transportation from a Marine Container Terminal to a point beyond the Lower Mainland or vice versa, of a specific marine container and its undisturbed, originally sealed content, using the same driver whose method of remuneration remains unchanged throughout the entire trip, and excludes any movement of a container which is subject to the Container Trucking Act, SBC 2014, chapter 28. portmetrovancouver.com 6

35 Long haul definition Beyond the Lower Mainland This term reflects moves beyond the scope of the Container Trucking Act and regulations. Questions: Is this part of the definition clear to you? Does the definition reflect your company s current status? How do you think this part of the definition will affect the long haul industry, if at all? Other questions or comments? portmetrovancouver.com 7

36 Long haul definition Specific and undisturbed marine container These terms are used to distinguish container moves that have a direct, long haul destination from moves destined for local sites or off-dock and repacking facilities, which are subject to the Container Trucking Act. Questions: Is this part of the definition clear to you? Does the definition reflect your company s current practice? How do you think this part of the definition will affect the long haul industry, if at all? Other questions or comments? portmetrovancouver.com 8

37 Long haul definition Same driver To make it clear that moves using a different driver for the final leg become subject to the Container Trucking Act and not approved under the long haul Access Agreement. Questions: Is this part of the definition clear to you? Does the definition reflect your company s current practice? How do you think this part of the definition will affect the long haul industry, if at all? Other questions or comments? portmetrovancouver.com 9

38 Long haul definition Method of Remuneration Remains Unchanged The method of remuneration can be hourly, by the kilometer, or other, but must apply through the entire trip, as a shift in the method of remuneration indicates a break in the trip, rendering the final leg a local move subject to the Container Trucking Act. Questions: Is this part of the definition clear to you? Does the definition reflect your company s current practice? How do you think this part of the definition will affect the long haul industry, if at all? Other questions or comments? portmetrovancouver.com 10