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Effects of free time reduction on rail car utilization : forest products traffic Gabille, Jean-Pierre Rene 1974

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EFFECTS DF FREE TIME REDUCTION ON RAIL CAR UTILIZATION (FOREST PRODUCTS TRAFFIC) BY JEAN-PIERRE RENE GABILLE B.SC, UNIVERSITY OF BRITISH COLUMBIA, 1972 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN BUSINESS ADMINISTRATION i n the Faculty of Commerce and Business Ad m i n i s t r a t i o n We accept t h i s t h e s i s as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA APRIL, 197 k I n p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an advanced degree a t t h e U n i v e r s i t y o f B r i t i s h C o l u m b i a , I agree t h a t the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u r p o s e s may be g r a n t e d by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s . I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l n o t be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . 3. P. G a b i l l e Department o f Commerce and B u s i n e s s A d m i n i s t r a t i o n The U n i v e r s i t y o f B r i t i s h Columbia Vancouver 8, Canada Date A p r i l 22, 131k ) i i ABSTRACT This study examines Dne Df the demurrage rules ( f r e e time allowance) and determines hou changes in i t would affect the u t i l i z a t i o n of cars carrying forest products. To achieve this objective, two substudies were carried Dut. The f i r s t was to de-termine the basic components of car a c t i v i t y found i n a r a i l car load to load cycle. Knowledge of the percentage of time spent under customer control i s Df primary importance i n determining to what extent a change in t h i s time would affect the whale cycle. The second substudy was to analyse customer behaviour i n order to predict how they would react tD a change in free time. Combining both r e s u l t s , this study estimates to what extent free time reduction for loading and unloading r a i l cars would affect car u t i l i z a t i o n in the Forest Industry. The conclusions are, that only small savings could be achieved by reducing free time to induce customers to release th e i r cars faster, and much larger savings could be achieved by imporving other areas of car u t i l i z a t i o n such as yard and interchange operations. Those areas of improvements should be investigated i n ^ r e a t d e t a i l by the railways. i i i TABLE DF CONTENTS Page LIST OF TABLES v LIST OF FIGURES v i i GLOSSARY OF TERMS " i x CHAPTER :. I INTRODUCTION 1 1 - O b j e c t i v e o f the Study • 2 2 - Importance Df the Study 2 3 - Methodology of the Study... k k - L i m i t a t i o n s of the Study... 6 5 - O u t l i n e o f the Study 7 I I FREIGHT TRAFFIC AND CAR SUPPLY 8 1 - T o t a l F r e i g h t Cars i n S e r v i c e on Canadian R a i l w a y s •••• B 2 - F r e i g h t Cars i n S e r v i c e i n the F o r e s t I n d u s t r y 19 3 - T o t a l F r e i g h t T r a f f i c i n Canada 2k k - F o r e s t P r o d u c t s F r e i g h t T r a f f i c 2k 5 - P r e s e n t Car Shortage 30 6 - E f f e c t o f the Car Shortage on the F o r e s t I n d u s t r y 33 I I I RAIL CAR ACTIVITY PATTERN • 35 1 - Source o f I n f o r m a t i o n ..... 36 2 - R e s u l t s ....... • 39 l v DEMURRAGE , , k5 1 - H i s t o r y ^5 2 - Purpose k6 3 - A d m i n i s t r a t i o n k l k - Canadian R u l e s • kB 5 - Average Agreement 52 6 - V a r i a b l e Demurrage •••• 53 7 - Demurrage S t a t i s t i c s 53 i v CHAPTER Page V THE CUSTOMER VIEWPOINT 56 1 - Methodology 57 2 - R e s u l t s 58 VI SUMMARY AND CONCLUSIONS 67 1 - Measurement o f Impacts o f Demurrage R u l e s on R a i l Car U t i l i z a t i o n 68 2. - R e s u l t s 69. 3 - C o n c l u s i o n s 72 BIBLIOGRAPHY 75 APPENDIX I Canadian I n d u s t r i a l League response t o r a i l w a y s ' p r o p o s a l o f r e d u c i n g f r e e time 76 I I Report on the P r o g r e s s o f the R a i l Demurrage Task Force 79 I I I Q u e s t i o n n a i r e 81 IV 1974 F o r e c a s t o f shipment o f F o r e s t P r o d u c t s 91 V R e s u l t s from the S h i p p e r s ' Survey 96 VI R e s u l t s from the R e c e i v e r s ' Survey.... 103 V LIST OF TABLES Table Page 1 T o t a l number of c a r s i n s e r v i c e on the Canadian R a i l w a y s i H 2 T o t a l c a r c a p a c i t y a v a i l a b l e on the Canadian R a i l w a y s 11 3 Number o f c a r s i n s e r v i c e on C.N.R., C. P. R a i l and B. C. R a i l w a y s 12 4 T o t a l c a r c a p a c i t y a v a i l a b l e on C.IM.R., C P . R a i l and B. C. R a i l w a y s 13 5 R a i l w a y s expenses ( P a r t i a l Statement) 1972 17 6 1972 l e a s i n g expenses IS 7 P r i v a t e c a r s r e g i s t e r e d i n Canada 20 B Equipment c u r r e n t l y b e i n g used f o r the t r a n s -p o r t a t i o n o f f o r e s t p r o d u c t s (June 1973) 21 9 A c q u i s i t i o n o f equipment f o r t r a n s p o r t a t i o n of f o r e s t p r o d u c t s (June 1973 - December 1974) 22 10 R a i l w a y s . Revenue - T o t a l Canada 26 11 1972 R a i l w a y s Revenue 27 12 F r e i g h t c a r r i e d on Canadian R a i l w a y s i n 1972 28 13 D e s t i n a t i o n o f f o r e s t p r o d u c t s . . . 31 14 Canadian c a r s i n U. S. and U. S. c a r s i n Canada 32 15 Load t o l o a d c y c l e ( d a ys) - Canadian t r a f f i c 4D 16 Load t o l o a d c y c l e (days) - Canada-L). S. t r a f f i c . . . 41 17 Average l o a d t o l o a d c y c l e ( c a r s c a r r y i n g f o r e s t . p r o d u c t s 43 18 Load t o l o a d c y c l e components (CI\lR c a r s ) 44 19 Demurrage i n Canada 55 20 D i s t r i b u t i o n D f answers per type o f f o r e s t p r o d u c t s s h i p p e d 59 u i Table I Page 21 D i s t r i b u t i o n o f c a r s l o a d e d (monthly) per c a r r i e r 59 22 S h i p p e r response on changed f r e e time r a t e s . . . . 64 23 P o t e n t i a l s a u i n g s from a r e d u c t i o n i n f r e e time 72 v i i LIST OF FIGURES F i g u r e Page 1 Study o u t l i n e 5 2 Average f r e i g h t c a r c a p a c i t y 1926-1972 9 3 Cars l e a s e d an Canadian R a i l w a y s 1968-1972.... 16 k Tons l o a d e d - D a i l y average 1972-1973 25 .5 C a r l o a d i n g s - o f revenue, f r e i g h t on Canadian R a i l w a y s 29 6 Complete l o a d t o l o a d c y c l e . . 37 7 B a s i c l o a d t o l o a d c y c l e 38 8 Frequency d i s t r i b u t i o n o f c y c l e t i m e s k2 9 Frequency d i s t r i b u t i o n o f demurrage days 61 v i i i ACKNOWLEDGEMENT m The au t h o r u i s h e s to ex p r e s s h i s s i n c e r e a p p r e c i a t i o n t o the f o l l o w i n g who a s s i s t e d i n the s t u d y : Dick R e i d , C o u n c i l o f F o r e s t I n d u s t r i e s o f B r i t i s h . C o l u m b i a , C h r i s E l s e y , Canadian P a c i f i c R a i l w a y , Jean Despres, Canadian N a t i o n a l R a i l w a y . Thanks are a l s o due t o the T r a n s p o r t Development Agency w i t h the a i d o f whose f e l l o w s h i p t h i s work was u n d e r t a k e n . A s p e c i a l note o f a p p r e c i a t i o n t o Dr. T. D. Heaver, T h e s i s Chairman, f o r h i s h e l p f u l and en c o u r a g i n g comments and a s s i s t a n c e . A l s o s i n c e r e thanks t o Ms. Brown, f o r her a s s i s t a n c e i n the t y p i n g of ; t h i s t h e s i s . i x GLOSSARY DF TERMS AVERAGE Demurrage t a r i f f term r e f e r r i n g tc- c o n t r a c t made AGREEMENT betueen a s h i p p e r or r e c e i v e r and a r a i l r o a d whereby the s h i p p e r or r e c e i v e r i s d e b i t e d f o r the time c a r s are h e l d f o r l o a d i n g or u n l o a d i n g beyond f r e e time and a l l o w e d a c r e d i t f o r those c a r s which are r e l e a s e d w i t h i n 2k hours a f t e r placement. Demurrage charges are a s s e s s e d monthly on any o u t s t a n d i n g d e b i t s and a l l a r b i t r a r i e s . BUNCHING CAR MOVEMENT Demurrage t a r i f f term f o r the d e l i v e r y on the same day o f inbound l o a d s which were s h i p p e d on d i f f e r e n t days from the same o r i g i n over the same r o u t e ; or d e l i v e r y on the same day of empty c a r s o r d e r e d f o r d i f f e r e n t days. Study term r e l a t i n g t o t h a t p o r t i o n o f the l i n e h a u l d u r i n g which a f r e i g h t c a r was a c t u a l l y b e i n g moved i n a t r a i n . CLAIM COMPUTED FREE TIME CONSTRUCTIVE PLACEMENT CREDIT Cla i m s may be f i l e d f o r bunch i n g , weather c o n d i t i o n s which hamper l o a d i n g / u n l o a d i n g , f r o z e n c a r g o , n a t u r a l d i s a s t e r s , s t r i k e s , and r a i l r o a d e r r o r . . Study term i n d i c a t i n g the a c t u a l amount o f non-ch a r g e a b l e c a r time a f t e r placement f o r surveyed f r e i g h t . c a r s , i n c l u d i n g d e f i n e d f r e e time p l u s week-ends and h o l i d a y s . Demurrage t a r i f f term r e f e r r i n g t o the s t o r a g e o f c a r s on any a v a i l a b l e t r a c k by .the c a r r i e r , when those c a r s are p r e v e n t e d from a c t u a l l y b e i n g p o s i t i o n e d f o r l o a d i n g or u n l o a d i n g f o r any cause a t t r i b u t a b l e t o the consignee or c o n s i g n o r ; f r e e time, and demurrage are computed from time o f c o n s t r u c t i v e placement. Demurrage t a r i f f term used w i t h i n average agreements w h i c h - r e f e r s t o the n e g a t i v e charge g r a n t e d t o a customer f o r c a r s r e l e a s e d w i t h i n 2k hours a f t e r p l a c e -ment; one c r e d i t o f f s e t s one d e b i t . CYCLE TIME R a i l r o a d term f o r the t o t a l time p e r i o d i t t a k e s a f r e i g h t c a r t o move from one l o a d i n g t o the n e x t , i n c l u d i n g u n l o a d i n g , and empty movement t o a p o i n t o f r e l o a d i n g ; a l s o r e f e r r e d t o as l o a d t o l o a d c y c l e t i m e . X DEBIT Demurrage t a r i f f average agreement term which connotes the charge per c a r per day or f r a c t i o n Df a day, f o r the f i r s t f o u r days f o l l o w i n g e x p i r a t i o n o f f r e e t i m e ; d e b i t s may be o f f s e t by c r e d i t s earned on c a r s r e l e a s e d b e f o r e the e x p i r a t i o n o f the f i r s t 2k hours of f r e e time under average agreements. DEMURRAGE The concept o f p l a c i n g a charge on r a i l r o a d f r e i g h t c a r s when tho s e v e h i c l e s are h e l d beyond a f r e e p e r i o d a l l o w e d f o r l o a d i n g or u n l o a d i n g or o t h e r s h i p p i n g f u n c t i o n s . DEMURRAGE DAY FREE TIME INBOUND Study term f o r the time p e r i o d used f o r computing demurrage c h a r g e s . The demurrage day i s a 2k hour p e r i o d which s t a r t s at the f i r s t 7:00 A.M. f o l l o w i n g placement. Demurrage d e f i n i t i o n o f the time a l l o w e d f o r l o a d i n g and u n l o a d i n g f r e i g h t c a r s a t the s h i p p e r or r e c e i v e r ' s dock w i t h o u t charge, n o r m a l l y kB h o u r s . Study term r e f e r r i n g to f r e i g h t c a r s u n d e r l o a d moving i n t o a t e r m i n a l a r e a f o r u n l o a d i n g by consignee or r e c e i v e r . INTERCHANGE R a i l r o a d term f o r the l o c a t i o n , p e r i o d o f t i m e , or pr o c e s s o f t r a n s f e r r i n g r a i l car's from one c a r r i e r ' s l i n e to t h a t o f a n o t h e r . INTERLINE R a i l r o a d d e s c r i p t i o n o f the movement o f r a i l c a r s o r i g i n a t i n g on one c a r r i e r ' s l i n e and t e r m i n a t i n g on , another l i n e . LINE-HAUL NOTIFICATION R a i l r o a d term f o r the p o r t i o n n o f a r a i l r o a d f r e i g h t ca r c y c l e where the c a r i s a c t u a l l y moving between o r i g i n and d e s t i n a t i o n ; a c y c l e w i l l c o n s i s t o f a loa d e d l i n e - h a u l and, o f t e n , an empty l i n e - h a u l . Demurrage T a r i f f t e r m i n o l o g y o f f i c i a l l y c o n n o t i n g a d v i c e by the r a i l r o a d t o a consignee o f the a r r i v a l o f c a r s ; r e q u i r e d f o r such as team t r a c k d e l i v e r y . Sometimes n o t i f i c a t i o n i s p r o v i d e d by r a i l r o a d s as a c o u r t e s y i n o t h e r a r r i v a l c a s e s . NOTIFY Study term i n d i c a t i n g the p o i n t i n time when a customer was n o t i f i e d of the a r r i v a l o f a car which i s to be p l a c e d on a team t r a c k . OFF LINE CARS . R a i l r o a d term f o r system c a r s when on another c a r r i e r ' s t r a c k s . x i OUTBOUND PER DIEM PLACED PULL Study term r e f e r r i n g to empty f r e i g h t c a r s moving i n t o a c o n s i g n o r l o c a t i o n f o r l o a d i n g and subsequent shipment. A d a i l y a l l o w a n c e o r charge; r a i l r o a d term f o r the d a i l y r a i l r o a d f r e i g h t c a r r e n t a l charge p a i d by one c a r r i e r t o another when a c a r i s on t h a t c a r r i e r ' s l i n e s at m i d n i g h t . T h i s r a t e now c a r r i e s a charge f o r m i l e age as w e l l . A study term meaning the same as placement. Demurrage T a r i f f term r e f e r r i n g t o the p r o c e s s and p o i n t i n time when a r a i l r o a d d e l i v e r s a f r e i g h t c a r t o a con-s i g n e e ' s or c o n s i g n o r ' s l o a d i n g o r u n l o a d i n g l o c a t i o n . Used as the s t a r t i n g p o i n t f o r demurrage time com-p u t a t i o n s , u n l e s s the c a r i s c o n s t r u c t i v e l y p l a c e d . R a i l r o a d term f o r the p r o c e s s and p o i n t i n time when a r a i l r o a d p h y s i c a l l y removes a f r e i g h t c a r from a co n s i g n e e ' s or c o n s i g n o r ' s l o a d i n g o r u n l o a d i n g l o c a t i o n . RELEASE R a i l r o a d term i n d i c a t i n g a p o i n t i n time when the consignee or c o n s i g n o r n o t i f i e s the r a i l r o a d t h a t a f r e i g h t c a r i s ready t o be p u l l e d , e i t h e r h a v i n g been lo a d e d or unlo a d e d . SUITCH DAY Study term i n d i c a t i n g the p e r i o d o f time between a r r i v a l o f s c h e d u l e d s w i t c h i n g s e r v i c e on one,day t o the s c h e d u l e d next a r r i v a l , w i t h a minimum s p e c i f i e d time between. SLUITCHING YARD R a i l r o a d term f o r the movement of c a r s from one p l a c e to another w i t h i n e s t a b l i s h e d g e o g r a p h i c a l l i m i t s . R a i l r o a d term r e f e r r i n g t o a system o f t r a c k s used f o r making up t r a i n s , c o n d i t i o n i n g and s t o r a g e o f c a r s , CHAPTER I INTRODUCTION On J u l y 11, 1973 C.N.R. and C. P. R a i l announced t h a t the " f r e e t i m e " a l l o w e d to l o a d and un l o a d c a r s would be reduced from 48 to 24 hou r s , e f f e c t i v e August 1, 1973. The r a i l w a y s j u s t i f i e d the change by s t a t i n g t h a t t h e r e was a severe r a i l c a r s h o r t a g e i n Canada and t h a t a " f r e e t i m e " r e d u c t i o n would a m e l i o r a t e the s i t u a t i o n . Immediately the Canadian I n d u s t r i a l T r a f f i c Leage c h a l l e n g e d t h i s j u s t i f i c a t i o n (a l e t t e r s e n t by the p r e s i d e n t o f the League t o the r a i l w a y s on J u l y 27, 1973 i s rep r o d u c e d i n appendix I ) . On J u l y 31, 1973 the Canadian P u l p and Paper A s s o c i a t i o n was s u c c e s s -f u l i n having the r a i l w a y s ' proposed r e d u c t i o n i n " f r e e t i m e " s u s -pended. B e f o r e the p u b l i c h e a r i n g s c h e d u l e d t o take p l a c e b e f o r e the Canadian T r a n s p o r t Commission on September k s t a r t e d , the r a i l w a y s withdrew t h e i r p r o p o s a l . A f t e r t h i s u n s u c c e s s f u l attempt t o reduce " f r e e t i m e " , both r a i l w a y s and s h i p p e r s agreed t o r e v i e w the whole demurrage problem. The Canadian I n d u s t r i a l T r a f f i c League c o o r d i n a t e d the f o r m a t i o n o f an I n d u s t r y S t e e r i n g Committee "to c o n s i s t o f those i n d u s t r y a s s o c i a t i o n s who have shown an i n t e r e s t i n the r a i l c a r demurrage q u e s t i o n s and a s s o c i a t e d problems.""* The r a i l w a y s a l s o formed a- R a i l w a y S t e e r i n g 1 T r a f f i c Notes, Issue #4685, Nov. 13, 1973. • 1 2 Committee. The whole demurrage q u e s t i o n u i l l be r e v i e w e d j o i n t l y 2 l a t e r , the u l t i m a t e g o a l b e i n g t o improve car u t i l i z a t i o n i n the i n t e r e s t o f both s h i p p e r s and c a r r i e r s . 1 - OBJECTIVE OF THE STUDY The o b j e c t i v e of t h i s study i s t o determine t o ,what e x t e n t f r e e time r e d u c t i o n f o r l o a d i n g and u n l o a d i n g r a i l c a r s would a f f e c t c a r u t i l i z a t i o n i n the F o r e s t I n d u s t r y . For t h i s o b j e c t i v e to be a c h i e v e d , the s t u d y w i l l have t o determine ( i ) the b a s i c components of car a c t i v i t y found i n a t y p i c a l r a i l c a r l o a d to l o a d c y c l e , both f o r US and. Canadian t r a f f i c and ( i i ) the impact o f a r e d u c t i o n of f r e e time on customers' l o a d i n g or u n l o a d i n g t i m e . The s t u d y examines one a s p e c t of the demurrage r u l e s ( f r e e time a l l o w a n c e ) and d e termines how a change i n t h i s r u l e c o u l d improve c a r u t i l i z a t i o n and r e s u l t i n b e t t e r s e r v i c e . 2 - IMPORTANCE OF THE STUDY A study d e a l i n g w i t h p o s s i b l e improvements i n c a r u t i l i z a t i o n i s i m p o r t a n t f o r both the r a i l w a y s and the F o r e s t I n d u s t r y . The t h r e e major Canadian r a i l w a y s i n v o l v e d i n the t r a n s p o r t -a t i o n of f o r e s t p r o d u c t s from the Canadian P a c i f i c Region are i n v e s t -i n g more and more money i n new equipment t o be used p r i m a r i l y f o r the t r a n s p o r t a t i o n of f o r e s t p r o d u c t s . By the end of 1974, CNR w i l l have i n c r e a s e d i t s lumber f l e e t by 2700 c a r s ( 3 0 % i n c r e a s e s i n c e See Appendix I I . 3 s p r i n g 1973). During the same p e r i o d C. P. R a i l u i l l i n c r e a s e i t s f l e e t by 940 c a r s ( 1 5 % i n c r e a s e ) . By A p r i l 1974, the p r o v i n c i a l govern-ment ouned B. C. R a i l u a y s u i l l have added 1600 c a r s t o i t s lumber f l e e t . In June 1974, a neu r a i l c a r m a n u f a c t u r i n g p l a n t ouned by the B. C. government u i l l be a b l e to d e l i v e r c a r s o f any type at a r a t e of 1000/year from i t s l o c a t i o n at Squamish. The r a i l u a y s c a r r i e d 213,851,000 tons o f revenue f r e i g h t i n 1972 (3,810,000 c a r l o a d s , 13.7% o f u h i c h c o n s i s t e d o f f o r e s t p r o d u c t s ) . Of a l l the f o r e s t p r o d u c t s from B. C , 70% of the lumber, 78% of the ply u o o d and 33% o f the uoodpulp are c a r r i e d by r a i l . P r a c t i c a l l y e v e r y t h i n g e l s e i s c a r r i e d by u a t e r . T r u c k i n g i s too ex p e n s i v e a l -though a spokesman of Rustad B r o t h e r s , l o c a t e d on the B. 0. R a i l u a y s i n d u s t r i a l s i t e i n P r i n c e George, r e c e n t l y d e c l a r e d t h a t h i s " f i r m had even gone t o the extreme of t r u c k i n g lumber t o U. S. border s t a t e s a t horrendous c o s t , a move made p o s s i b l e o n l y by the r e c e n t h i g h p r i c e o f lumber."^ Houever the F o r e s t I n d u s t r y has been d e v e l o p -i n g around e i t h e r r a i l or u a t e r t r a n s p o r t a t i o n and no o t h e r p r a c t i c a l and e c o n o m i c a l mode i s p r e d i c t e d t o become i m p o r t a n t i n the near f u t u r e . R a i l c a r u t i l i z a t i o n i s the key uord both f o r the r a i l u a y s because o f the l a r g e amount o f c a p i t a l i n v e s t e d i n neu equipment, and the s h i p p e r s because o f revenue l o s s e s r e s u l t i n g from a l a c k of a v a i l a b l e r a i l c a r s . The methodology developed i n t h i s study c o u l d be used t o determine the e f f e c t s o f f r e e time r e d u c t i o n on c a r u t i l -i z a t i o n i n A l l Canadian i n d u s t r i e s . Such a study u o u l d form a very B. C. Lumberman Magazine, Dec. 1973 i s s u e . i m p o r t a n t p a r t o f the more g e n e r a l problem: how can c a r u t i l i z a t i o n be maximized through changes i n demurrage r u l e s . 3 - METHODOLOGY OF THE STUDY In o r d e r to a c h i e v e the o b j e c t i v e o f the s t u d y , the c a r movement c y c l e o f c a r s l o a d e d u i t h f o r e s t p r o d u c t s and the l o a d i n g and u n l o a d i n g o p e r a t i o n s o f s h i p p e r s and r e c e i v e r s o f f o r e s t p r o d u c t s must be i n v e s t i g a t e d . The t y p i c a l l o a d t o l o a d c y c l e o f r a i l c a r s c a r r y i n g f o r e s t p r o d u c t s e i t h e r t o Canada or the U. S. can be determined from the a n a l y s i s o f c a r movement data o b t a i n e d from the o p e r a t i n g i n f o r m -a t i o n systems o f the r a i l u a y s . P o s s i b l e changes i n l o a d i n g and u n l o a d i n g o p e r a t i o n s can be Li determined from the a n a l y s i s o f the answers t o a q u e s t i o n n a i r e m a i l e d t o 130 f i r m s ( e i t h e r s h i p p e r s or r e c e i v e r s o f f o r e s t p r o d u c t s ) . Those p o s s i b l e changes are used as a b a s i s t o determine uhat the l e n g t h o f a l o a d t o l o a d c y c l e might have been i f " f r e e t i m e " had been reduced January 1, 1973. Comparing t h i s c y c l e t o the r e a l one u h i c h was a c h i e v e d , i t i s p o s s i b l e t o determine the e x t r a number o f c a r l o a d i n g s u h i c h c o u l d have been completed betueen January 1 and J u l y 31, 1973. The f o l l o w i n g diagram summarizes the methodology o f the s t u d y . See Appendix I I I . 5 F i g u r e 1 Study O u t l i n e From the R a i l u a y s Car r u n n i n g r e c o r d s Load t o lcfad c y c l e From the F o r e s t I n d u s t r y Q u e s t i o n n a i r e P o s s i b l e changes i n l o a d i n g and u n l o a d i n g time Input I n t e r p r e t a t i o n R e s u l t s P o s s i b l e r e d u c t i o n i n l o a d t o l o a d c y c l e Car a v a i ] . a b i l i t y > Car u t i l i z a t i o n I S a v i n g s Combination F i n a l r e s u l t s 4 - LIMITATIONS OF THE STUDY 6 The sample o f c a r s chosen to determine the l o a d to l o a d c y c l e e x c l u d e s c e r t a i n t y p e s o f c a r s : ( i ) r a i l c a r s c a r r y i n g f o r e s t p r o d u c t s t o be unloaded i n a harbour are e x c l u d e d because o f the s p e c i a l n a t u r e of demurrage r u l e s a p p l i e d to e x p o r t t r a f f i c t h rough harbours (th e proposed f r e e time r e d u c t i o n u o u l d not have a f f e c t e d t h i s t r a f f i c ) ; ( i i ) c a r s not p r i m a r i l y a l l o c a t e d to the t r a n s p o r t a t i o n o f the f o r e s t p r o d u c t s are a l s o e x c l u d e d s i n c e t h i s s t u d y c o v e r s o n l y the F o r e s t I n d u s t r y . However, i n a p e r i o d o f s e r i o u s s h o r t a g e , equipment a v a i l a b l e i s used f o r any type o f t r a f f i c . T h i s might cause a b i a s i n the r e s u l t s . In o r d e r to have a sample o f c a r s a l l o c a t e d p r i m a r i l y to f o r e s t p r o -d u c t s , the su r v e y s h o u l d c o v e r the p e r i o d p r i o r to the n a t i o n a l r a i l -ways s t r i k e o f August 1973. However c a r r u n n i n g r e c o r d s are kept o n l y f o r 40 days. Some.of the c a r s s u r v e y e d were on t r a c k s a t the b e g i n n i n g o f January 1974. The q u e s t i o n n a i r e s are sent o n l y t o Canadian s h i p p e r s and r e -c e i v e r s of f o r e s t p r o d u c t s . Surveys from U. S. r e c e i v e r s would have had to be combined w i t h i n f o r m a t i o n from the p a r t i c u l a r r a i l r o a d s e r v i n g t h e i r p l a n t and time as w e l l as g e o g r a p h i c a l c o n s t r a i n t s made t h i s i m p o s s i b l e . However, e x c e l l e n t i n f o r m a t i o n on U. S. r e c e i v e r s as 5 a whole was o b t a i n e d from the Reebie's s t u d y . Reebie A s s o c i a t e s , Towards An E f f e c t i v e Demurrage System, U. S. Department o f Commerce, J u l y 1972. 7 5 - OUTLINE DF THE STUDY Chapter 2 a n a l y s e s d a ta from S t a t i s t i c s Canada and the r a i l -ways on changes i n f r e i g h t t r a f f i c and c a r s u p p l y s i n c e 1967 and p r e d i c t i o n s f o r the near f u t u r e . T h i s a n a l y s i s a l s o e s t a b l i s h e s the importance o f r a i l t r a n s p o r t a t i o n f o r Canadian i n d u s t r i e s . To determine the r e l a t i v e importance o f r a i l c a r d e t e n t i o n , Chapter 3 d e s c r i b e s the b a s i c components o f c a r a c t i v i t y found i n the t y p i c a l l o a d t o l o a d c y c l e . The b a s i s f o r t h e s e f i n d i n g s stems from an a n a l y s i s o f a sample of c a r movements from the t h r e e major c a r r i e r s i n v o l v e d i n the t r a n s p o r t a t i o n of f o r e s t p r o d u c t s . Chapter k p r e s e n t s the b a s i c r a t e s and r u l e s c o v e r i n g r a i l c a r demurrage i n Canada w i t h those e x i s t i n g i n the U. S. and p r o p o s a l s from the Reebie's s t u d y . Emphasis i s p l a c e d on the a n a l y s i s o f time a l l o w a n c e b u i l t i n t o demurrage r u l e s : the a l l o w a n c e of f r e e time f o r the customer h a n d l i n g o f the c a r ; the c a l c u l a t i o n of a demurrage day, the weekend, and h o l i d a y arrangements. Chapter 5 a n a l y z e s the r a i l customer answers t o a q u e s t i o n n a i r e and i n t e r v i e w s , and e s t a b l i s h e s a b a s i s f o r d e t e r m i n i n g the impact o f changes i n f r e e t i m e . Chapter 6 s t u d i e s the e f f e c t s of f r e e time r e d u c t i o n u s i n g the f i n d i n g s from the q u e s t i o n n a i r e and from the l o a d t o l o a d a c t i v i t y sample. The e f f e c t s are d e s c r i b e d i n terms of p o t e n t i a l s a v i n g s which c o u l d have been a c h i e v e d i f " f r e e t i m e " r e d u c t i o n had t a k e n p l a c e on January 1, 1973. T h i s c h a p t e r c o n c l u d e s w i t h recommendations on how t o approach the g e n e r a l problem o f demurrage i n Canada, and s u g g e s t s f u r t h e r s t u d i e s to be u n d e r t a k e n . CHAPTER I I FREIGHT TRAFFIC AND CAR SUPPLY 1.,- FREIGHT CARS IN SERVICE ON CANADIAN RAILWAYS a) S i z e o f the F l e e t There were 186,541 f r e i g h t c a r s i n the s e r v i c e o f common c a r r i e r r a i l w a y s i n Canada on December 31, 1972, a decrease o f .91% s i n c e December 31, 1968. The t o t a l c a r r y i n g c a p a c i t y o f those c a r s was 11,178,770 ton s at the end o f 1972, an i n c r e a s e o f 5.8% s i n c e the end of 1967. The average c a p a c i t y o f a c a r has been i n c r e a s i n g c o n t i n u a l l y , s i n c e 1920 (see f i g u r e 2) r e a c h i n g 59.9 ton s i n 1972. Al t h o u g h the t o t a l number o f c a r s has been d e c r e a s i n g , the t o t a l c a r r y i n g c a p a c i t y has been i n c r e a s i n g . The number of f r e i g h t c a r s i n s e r v i c e over the p a s t f i v e y e a r s has been v a r y i n g a c c o r d i n g t o r a i l w a y s and car t y p e s . T a b l e s 1 and 2 compare the number o f c a r s i n s e r v i c e and t h e i r c a p a c i t y f o r each type o f c a r from 1968 to 1972. T a b l e s 3 and 4 break down the data from t a b l e s 1 and 2 to compare the number o f c a r s i n s e r v i c e and t h e i r c a p a c i t y f o r CNR, C. P. R a i l and B. C. R a i l w a y s i n 1968 and 1972. As t a b l e s 1 and 2 show, s p e c i a l i z e d c a r s ( f l a t , c o vered hoppers, o r e ) have both i n c r e a s e d i n number and i n c a p a c i t y . These c a r s are u s u a l l y a l l o c a t e d t o the t r a n s p o r t a t i o n o f one commodity and 8 F i g u r e 2 Average F r e i g h t Car C a p a c i t y Tons 65 60 55 50 45 40 35 26 30 — 1 — 1 — 1 — > 1 1 1 \ 1 1 I 1 1 1 31 36 41 46 3*5 4"0 45 50 5.' Year Average 51 5~5 56 SQ 61 65 66 67 68 69 70 71 72 Sou r c e : R a i l w a y s T r a n s p o r t , P a r t I I I : Equipment, t r a c k and f u e l s t a t i s t i c s 1972 -S t a t i s t i c s Canada #52-209. Tons 65 60 55 50 45 40 35 Year I D Table 1. T o t a l Number of Cars i n S e r v i c e on the Canadian R a i l u a y s Car Type 1968 1969 1970 1971 1972 over 5 yei Box c a r s 103,903 101,819 101,746 99,904 97,162 (6.49) Gondola & B a l l a s t 23,301 23,577 23,614 22,762 22,833 (2.01) Hopper 21,660 22,480 24,496 25,175 25,539 17.91 F l a t 16,002 17,415 18,043 19,728 20,414 27.57 R e f r i g e r a t o r 8.074 7,459 6,673 5,403 5,292 (34.36) Ore 6,722 6,684 6,735 6,819 7,241 7.72 Auto 3,646 3,752 2,175 2,280 2,607 (28.5) Stock 2,987 2,945 2,827 2,687 2,583 (13.53) Tank 538 511 487 468 474 (11.87) Others 1,421 1,538 1,938 2,080 2,396 68.61 T o t a l 188,254 188,268 188,738 187,306 186,541 (.91) Leased ( i n c l u d e d i n t o t a l ) 4,960 7,551 12,187 14,545. 17,515 257.15 Company c a r s 15,876 15,981 16,053 16,124 ,15,573 (1.91) Source: R a i l w a y T r a n s p o r t . P a r t I I I : Equipment, t r a c k and f u e l s t a t i s t i c s 1972. S t a t i s t i c s Canada #52-209. 11 Table 2. T o t a l Car C a p a c i t y A v a i l a b l e on the Canadian R a i l u a y s ( i n t o n s ) Car Type 1968 1969 1970 1971 1972 % i n c r e a s i over 5 ye a r s Box c a r s 5,007,476 4,931,428 4,983,266 938,809 4,830,771 (3.53) Gondola & B a l l a s t 1,609,017 1,647,660 1,672,575 1, 634,963 1,675,261 4.12 Hopper 1,641,437 1,702,490 1,952,003 2, 011,977 2,051,258 24.97 F l a t 827,521 920,272 1,054,553 1, 183,606 1,251,581 51.24 R e f r i g -e r a t o r 425,476 411,196 366,401 306,172 310,832 (26.94) Ore 570,896 568,396 572,236 577,468 620,986 8.77 Auto 248,003 260,708 139,548 152,041 170,388 (31.3) Stock 129,274 128,104 123,968 119,028 115,568 (10.6) Tank 27,412 26,218 25,263 24,329 24,545 (10.46) Others 79,890 88,540 108,870 113,520 127,880 60.07 T o t a l 110,566,388 1,0584,382 105848382 11061,869 11178,770 5.8 Source: R a i l w a y T r a n s p o r t . P a r t I I I : Equipment, t r a c k and f u e l s t a t i s t i c s 1972. S t a t i s t i c s Canada #52-209. T a b l e 3. IMumber o f Cars i n S e r v i c e on C.IM.R. , C P . R a i l and B.C. R a i l w a y s 1968 1972 % i n c r e a s e o r ( d e c r e a s e ) Car Type CNR CPR BCRCI ! CNR CPR BCR CNR CPR BCR Bex c a r s 54,439 47,191 442-4! ! 49,965 43,583 1,830 (8.07) (7.65) 314.03 Gondola & B a l l a s t 12,538 8,373 592 11,648 8,461 1,033 (7.43) (1.05) 74.5 Hopper 8,755 10,333 122 - 11,411 11,538 107 30.34 11.66 (12.3) F l a t 7,888 6,662 706 12,508 7,020 1,002 58.57 5.37 41.93 R e f r i g e r a t o r 5,038 3,002 24 4,343 913 24 (13.8) (69.59) 0 Ore 2,125 . 1,125 0 2,083 1,223 0 (11980,) 8.71 0 Auto 1,068 2,575 0 1,677 922 0 57.02 (64.19) 0 Stock 1,528 1,405 24 1,334 1,235 14 (12.7) (12.1) (41.67) Tank 25 269 17 25 190 24 0 (29.37) 41.18 Others 1,413 0 0 2,395 0 0 69.5 0 0 T o t a l 94,772 80,932 1,927 96,389 75,085 4,019 1.71 (6.5) 108.56 Leased ( i n c l u d e d i n t o t a l ) 0 (2834 i n 1969) 382 170 10,403 2,358 155 336.37* 564.4 (8.82) Company c a r s 8,710 5,527 299 0,063 4,838 479 4.05 (12.47) 60.2 Source: R a i l w a y T r a n s p o r t P a r t I I I : Equipment, t r u c k and f u e l s t a t i s t i c s 1972. S t a t i s t i c s Canada #52-209. * percentage i n c r e a s e between 1969 and 1972 Table 4. T o t a l Car C a p a c i t y A v a i l a b l e on C.N.R., C P . R a i l and B.C. R a i l w a y s 1968 1972 % i n c r e a s e or ( d e c r e a s e ) Car Type CNR CPR BCR CNR CPR BCR CNR CPR BCR Box c a r s 2,564,830 2,322,189 29,960 2,427,700 2,176,535 141,154 (5.35) (6.27) 372.14 Gondola & B a l l a s t 828,200 601,690 47,067 671,590 648,920 79,968 (18.91) 7.85 69.9 Hopper 673,420 796,850 9,778' 948,900 938,618 872 40.91 17.79 (10.81 F l a t 425,198 368,330 56,584 685,162 440,758 81,080 61.14 19.66 43.29 R e f r i g e r a t o r 268,645 155,000 1,307 252,905 55,990 1,307 (5.86) (63.88) 0 Dre 151,610 78,040 0 148,210 86,130 0 (2.24) 10.37 0 Auto 69,450 121,340 0 113,820 56,218 0 63.89 (53.67) 0 Stock 66,730 60,080 1,254 61,260 53,580 728 (8.2) (10.82) (41.95 Tank 750 14,840 250 500 11,500 1,200 (33.33) (22.5) 463.41 Others 79,000 0 0 127,830 0 0 61.81 0 0 T o t a l 5,127,833 4,518,559 146,800 5,581,877 4,468,068 314,945 8.85 (1.12) 114.54 Source: R a i l w a y s T r a n s p o r t P a r t I I I : Equipment, t r a c k and f u e l s t a t i s t i c s 1972. S t a t i s t i c s Canada #52-209. Ik t h e i r t u r n around time i s b e t t e r than the average. Some of the c a r s are more ex p e n s i v e to b u i l d ; however t h e i r u t i l i z a t i o n i s above average and so i s t h e i r r e t u r n on i n v e s t m e n t . The i n c e n t i v e to i n -v e s t i n more c a r s o f t h i s type i s s t r o n g . On the c o n t r a r y r e t u r n on i n v e s t m e n t i n the p l a i n , m u l t i p u r p o s e box c a r i s s m a l l . I t i s not s u r p r i s i n g t h a t number and t o t a l c a r r y i n g c a p a c i t y o f the box c a r s have been d e c l i n i n g over the y e a r s . The number o f auto c a r s has been d e c r e a s i n g w i t h the i n t r o -d u c t i o n o f the t r i - l e v e l a u t o m o b i l e c a r r i e r , and so has been the number o f r e f r i g e r a t o r c a r s w i t h the di s a p p e a r a n c e o f i c e s t a t i o n s (neu c a r s are v e r y e x p e n s i v e because they must c o n t a i n m e c h a n i c a l r e f r i g e r a t i o n u n i t s ) . I t i s i n t e r e s t i n g t o note t h a t as CNR uas i n c r e a s i n g both the number o f i t s c a r s ( t o t a l ) and i t s t o t a l c a r r y i n g c a p a c i t y , C. P. R a i l uas doing e x a c t l y the o p p o s i t e (see t a b l e s 3 and k). C. P. R a i l i n v e s t e d l e s s than C.IM.R. i n box, hopper, f l a t , r e f r i g e r a t o r , a u t o , s t o c k and tank c a r s . C. P. R a i l e f f o r t uas g r e a t e r than C.IM.R. o n l y i n g o ndola, b a l l a s t and ore c a r s . I n f o r m a t i o n on B. C. R a i l u a y s t o t a l f r e i g h t c a r f l e e t has been added i n t a b l e s 3 and k. The l a r g e percentage i n c r e a s e i n c a r s o f some t y p e s (box, gondola, b a l l a s t , f l a t and tank c a r s ) i s due t o the f a c t t h a t B. C. R a i l u a y s had very f e u o f thes e c a r s t o s t a r t u i t h and uas m a i n l y u s i n g c a r s from o t h e r r a i l u a y s . b) Maintenance and Investment I n f o r m a t i o n on c o s t o f m a i n t a i n i n g f r e i g h t c a r s and on c a p i t a l e x p e n d i t u r e on neu f r e i g h t c a r s i s d i f f i c u l t t o o b t a i n . I n f o r m a t i o n 15 from S t a t i s t i c s Canada i s c o n s i s t e n t , but the one from annual r e p o r t s o f the r a i l w a y s v a r i e s w i t h each company's way of r e p o r t i n g . Table 5 summarizes data a v a i l a b l e . c) L e a s i n g B e f o r e t e r m i n a t i n g t h i s s e c t i o n on f r e i g h t . c a r s i n s e r v i c e i n Canada, the growing importance of l e a s i n g s h o u l d be mentioned. There are b a s i c a l l y two t y p e s o f l e a s i n g : ( i ) l o n g term f i n a n c i a l l e a s e s where the r a i l w a y s v i r t u a l l y have the same r i g h t s and r e s p o n s i b i l i t i e s as on t h e i r own c a r s ( t h e s e c a r s are always marked w i t h the p a r t i c u l a r r a i l r o a d r e p o r t i n g marks; ( i i ) s h o r t term o p e r a t i n g l e a s e s where f i r m s l e a s e r a i l c a r s from l e a s i n g companies and the l e a s i n g company pay f o r the maintenance, i n s u r a n c e and t a x e s on the c a r s . The number o f c a r s i n s e r v i c e under those two arrangements i s i n c r e a s i n g r a p i d l y (see f i g u r e 3 ) . The r a i l r o a d s f i n d i t more advantageous t o l e a s e c a r s because o f c o n s t r a i n t s on c a p i t a l a v a i l a b l e f o r i n v e s t m e n t . A l s o the l e a s i n g expense i s f u l l y t a x d e d u c t i b l e . T h i s type of l e a s e i s advantageous i n the s h o r t run but more ex p e n s i v e i n the l o n g r u n . In t a b l e 6, the l e a s i n g e x p e n d i t u r e i s shown as p a r t o f equipment r e n t i n oper-a t i n g expense. T h i s i s however m i s l e a d i n g because,equipment r e n t (Dr and C r ) a l s o i n c l u d e s per diem and m i l e a g e e x p e n d i t u r e s p a i d t o and r e c e i v e d from o t h e r r a i l r o a d s f o r use o f each o t h e r ' s c a r s . The a n nual net per diem and m i l e a g e b a l a n c e f l u c t u a t e s h i g h l y from year to year depending upon the p a r t i c u l a r r a i l r o a d t r a f f i c l e v e l and the F i g u r e 3 16; Cars Leased by Canadian R a i l w a y s 1968 - 1972 Cars (Thousands) 15 1Q 5 1 C.IAI.R. T o t a l Canadian R a i l w a y s Year Source: R a i l w a y T r a n s p o r t . P a r t I I I : Equipment, t r a c k and f u e l s t a t i s t i c s 1972. S t a t i s t i c s Canada #52-209. Table 5. R a i l w a y s Expenses ( P a r t i a l Statement) 1972. CIMR CPR BCR T o t a l Canada T o t a l o p e r a t i n g expense 1,129,314,652 733,409,558 36,326,000 2,070,606,935 T o t a l equipment maintenance 209,840,354 147,020,250 7,790,225 395,020,061 T o t a l c a r maintenance 84,879,055 52,720,641 2,326,060 152,331,302 F r e i g h t c a r maintenance 63,856,128 47,846,424 IMA NA F r e i g h t c a r maintenance as % o f t o t a l o p e r a t i n g expense 7.52 6.52 IMA NA M a i n t e n a n c e / c a r 662.42 637.23 IMA NA T o t a l c a p i t a l e x p e n d i t u r e 173,176,376 (MA 70,715,332 NA IMeu equipment 51,550,023 NA IMA NA New f r e i g h t c a r s $ 13,735,946 NA # 2,423 IMA IMA NA Sou r c e : R a i l w a y T r a n s p o r t P a r t I I F i n a n c i a l S t a t i s t i c s 1972. S t a t i s t i c s Canada #52-208. NA: not a v a i l a b l e Table 6. 1972 L e a s i n g Expenses. CNR CPR BCR T o t a l Canada T o t a l o p e r a t i n g expense 1,129,314,652 733,409,558 36,326,000 2,070,606,935 Equipment Rent Dr. 49,452,801 34,754,370 3,672,221 102,564,399 Equipment Rent C r . 19,530,607 28,452,922 2,054,160 51,997,775 Equipment Rent Net 30,012,194 6,301,448 1,618,061 50,566,624 S o u r c e : Railujay T r a n s p o r t P a r t I I - F i n a n c i a l s t a t i s t i c s 1972. S t a t i s t i c s Canada #52-208. 19 average number o f f o r e i g n c a r s on l i n e compared w i t h the average number o f i t s awn c a r s on a f o r e i g n l i n e . P r i v a t e f i r m s , because o f u n c e r t a i n t y o f c a r s u p p l y from the r a i l w a y s , sometimes p r e f e r t o l e a s e p r i v a t e c a r s . The c o s t i s h i g h e r , but the s e r v i c e b e t t e r . The l e a s i n g companies spend a g r e a t d e a l o f energy t o keep t h e i r c a r s moving. As t a b l e 7 shows, t h e r e was a decrease i n the number (and t o t a l c a p a c i t y ) o f p r i v a t e c a r s i n s e r v i c e i n 1971. T h i s r e s u l t s from a C.T.C. o r d e r f o r c i n g the r e t i r e -ment o f a l a r g e number o f 8,000 g a l l o n c a p a c i t y tank c a r s over 50 y e a r s o l d . I n 1972 t h e r e was an i m p o r t a n t i n c r e a s e b o t h i n number and t o t a l c a p a c i t y . No numbers are y e t a v a i l a b l e f o r 1973 but f r a c t i o n a l d a t a seems to i n d i c a t e another i m p o r t a n t i n c r e a s e i n number o f c a r s o f t h i s type i n s e r v i c e . 2 - FREIGHT CARS IN SERVICE IN THE FOREST INDUSTRY Both C.N.R. and C. P. R a i l have been d e c e n t r a l i z i n g l e a v i n g more and more room f o r r e g i o n a l i n i t i a t i v e . R a i l w a y s management (and a l s o i n d u s t r i e s ) b e l i e v e t h a t problems i n c a r s u p p l y can be s o l v e d on a r e g i o n a l b a s i s . The r e s u l t f a r the Mountain Region (B. C. and western A l b e r t a ) was the c r e a t i o n o f a f l e e t o f c a r s a s s i g n e d t o the t r a n s p o r t a t i o n o f f o r e s t p r o d u c t s . Table 8 summarizes i n f o r m a t i o n on the t y p e s and numbers Df t h e s e c a r s . I t s h o u l d be noted t h a t many of these c a r s , a l t h o u g h a s s i g n e d t o F o r e s t P r o d u c t s are sometimes used f o r o t h e r commodities. R e l i e f from t h e c a r sh o r t a g e comes s l o w l y as new equipment i s put i n s e r v i c e . T able 9 shows equipment a c q u i s i t i o n s f o r C.N.R., C. P. R a i l and B. C. R a i l w a y s f o r 1973 and 1974. B. C. R a i l w a y s T a b l e 7. P r i v a t e Cars R e g i s t e r e d i n Canada (number and t o t a l c a p a c i t y a v a i l a b l e ) % i n c r e a s e Car Type 1968 1969 197D 1971 1972 or ( d e c r e a s e Auto - - - 33 1,485 33 1,485 0 0 nx c a r s Box c a r s - - - 193 14,248 292 21,600 51.3 51.6 F l a t - - - 45 3,117 45 3,117 0 0 Hopper - - - 687 64,398 2,862" 282,578 316.6 338.8 Gondola - - - 295 29,500 235 23,500 (20.34) (20.34) Tank - - - 14,207 914,572 14,296 1,069,474 .63 17 R e f r i g e r a t o r - - - 100 4,850 311 15,320 211 215.87 T o t a l 15 1,118 ,823 ,421 16,rJ9D 1,164,869 16,211 112055947 15,560 1,032,170 18,074 1,417,074 14.22 26.7 ( 5 y e a r s ) S ource: R a i l w a y T r a n s p o r t P a r t I I I : Equipment, t r a c k and f u e l s t a t i s t i c s 1972. S t a t i s t i c s Canada #52-209. Note: upper number = number o f c a r s r e g i s t e r e d i n the c a t e g o r y lower number = t o t a l c a p a c i t y a v a i l a b l e i n the ca t e g o r y ( t o n s ) a 21 Table 8. Equipment C u r r e n t l y B e i n g Used f o r the T r a n s p o r t a t i o n of F o r e s t P r o d u c t s (June 1973) C.IAI.R. Car Type Assignment IMo. of Cars Bulkhead F l a t P o o l #8120 (CIM) - B l d g . P r o d . 649 P o o l #8115 (DUC) - B l d g . P r o d . 1,780 Box-double door (DLUC) P o o l #8135- Lumber.: 1,711 Other f l a t & box IMot s p e c i f i c a l l y a s s i g n e d 5,000* T o t a l 9,140 C P . R a i l 40 Double Doors* 3,700 50' Double Doors* 1,000 48' Bulkhead F l a t Cars 200 51 Bulkhead F l a t Cars 1,300 T o t a l 6,200 + 66' Bulkhead F l a t Cars a c q u i r e d i n 1973 ( l e a s e d ) 200 B.C R a i l w a y Box c a r s * 1,830 Gondola* 1,033 F l a t * 1,002 T o t a l 3,865 TOTAL 19,405 * Cars not e x c l u s i v e l y used f o r the t r a n s p o r t a t i o n o f f o r e s t p r o d u c t s . Source: T h i s i n f o r m a t i o n was p r o v i d e d d u r i n g i n t e r v i e w s w i t h e x e c u t i v e s from C.N.R., C P . R a i l and B.C.Railways, December 1973. 22 Table 9. A c q u i s i t i o n D f Equipment f o r T r a n s p o r t a t i o n o f F o r e s t P r o d u c t s (June 1973 - December 1974) C. IM.R. Car Type  A c q u i s i t i o n s Bulkhead f l a t - 7 C tons-52'8" Bulkhead f l a t - 7 0 t o n s - 5 2 ' 8 " Bulkhead f l a t Box-70 tons-52'B"-18' comb. pl u g & s l i d i n g doors Uoodchip B D X-50'6"-12' p l u g door M o d i f i c a t i o n s Box-modify e x i s t i n g c a r s by g e n e r a l u p g r a d i n g & w i d e n i n g doors to 12' T o t a l No. o f Cars 400 400 300 300 140 500 660* D e l i v e r y Date May-Sept.1973 ( d e l i v e r e d June 1973-Jan.l974 (160 d e l . as o f Nov.6, 1973) 1974 ( P r e l i m i n a r y ) Feb.-March 1974 Jan.-Feb. 1974 4th q u a r t e r 1974 ( P r e l i m i n a r y ) 1973 (433 d e l i v e r e d as o f Oct.26, 1973) 2,700 C P . R a i l 1974 Program 5 2 , 8 " Double doors 140 40 Double doors - r e b u i l t 400 42'8" double doors ( p r o b a b l e a c q u i s i t i o n ) 100 Gondolas f o r C h i p s - m o d i f i e d 100 66' Bulkheads - t o be l e a s e d i n 1974 200 T o t a l 940 23 Table 9 ( c o n t i n u e d ) B.C. R a i l w a y Car Type No. of Cars Neu 52'8" bu l k h e a d f l a t c a r s on o r d e r 150D - 70 o f the 180 produced have been r e c e i v e d and b a l a n c e of the o r d e r are b e i n g d e l i v e r e d at the r a t e o f 10 c a r s per day Boxcars l e a s e d from Foss Launch & Tug Co. 500 - 100.are nou i n s e r v i c e and b a l a n c e i s s c h e d u l e d f o r d e l i v e r y by May 1974 S h i p p e r s ' l e a s e d c a r s t o be i n s e r v i c e from BCR o r i g i n s 1800 - F i n a l d e l i v e r y by A p r i l , 1974 Note: These 1800 c a r s are made up of 1300 e x i s t i n g s h i p p e r s ' l e a s e d c a r s , p l u s an i n t e n d e d 500 b u l k h e a d f l a t c a r s . Neu uoodchip c a r s t o be i n s e r v i c e by yea r end Neu uoodchip c a r s s c h e d u l e d f o r c o n s t r u c t i o n at BCR Squamish Car B u i l d i n g F a c i l i t i e s i n 1974 100 300 Used c a r s t o be purchased and c o n v e r t e d f o r the h a n d l i n g o f veneer jrjg T o t a l 4300 TOTAL 7 > g 4 Q Source: T h i s i n f o r m a t i o n uas p r o v i d e d d u r i n g i n t e r v i e u s w i t h e x e c u t i v e s from C.N.R., C P . R a i l and B.C. R a i l u a y s , December 1973. I 24 e s p e c i a l l y u i l l be expanding r a p i d l y , more than d o u b l i n g the s i z e , of i t s f l e e t by the end o f 1974. 3 - TOTAL FREIGHT TRAFFIC IN CANADA Canada's major r a i l u a y s u i l l p r o b a b l y r e g i s t e r an a l l time r e c o r d f o r c a r r y i n g f r e i g h t i n 1973, d e s p i t e the summer r a i l u a y s t r i k e . 198,700,000 ton s o f t r a f f i c uere moved i n the f i r s t 10 months of 1973, a 14.1% i n c r e a s e over the same p e r i o d i n 1972.^ F i g u r e 4 shous t h a t the d a i l y average o f t o n s l o a d e d uas much h i g h e r i n 1973 than i n 1972 (except f o r August, months o f the s t r i k e ) . F r e i g h t i s the main source o f income f o r the r a i l u a y s and i t has been g r o u i n g both i n a b s o l u t e v a l u e and i n percentage o f t o t a l o p e r a t i n g income s i n c e 1967 (see t a b l e s 10 and 1 1 ) . Demurrage has been i n c r e a s i n g i n d o l l a r v a l u e , but s t a y e d p r a c t i c a l l y the same as percentage o f o p e r a t i n g income. 4 - FOREST PRODUCTS FREIGHT TRAFFIC Table 12 shous t h a t 13.78% o f the t o t a l c a r l g a d i n g s o f revenue f r e i g h t on Canadian R a i l u a y s c o n s i s t e d o f f o r e s t p r o d u c t s . They occupy the t h i r d rank a f t e r mine p r o d u c t s (30.82%) and uheat and o t h e r g r a i n p r o d u c t s ( 1 4 . 9 2 % ) . The c a r l o a d i n g s o f f o r e s t p r o d u c t s i n Canadian R a i l u a y s have been i n c r e a s i n g over the y e a r s ( f i g u r e 5 p r o v i d e s a monthly comparison betueen 1971, 1972 and 1973) and u i l l c o n t i n u e i n the f u t u r e . A f o r e -c a s t o f B. C. f o r e s t p r o d u c t s shipments t o Canada and the U. S. f o r 1974 i s re p r o d u c e d i n appendix IU. Demand f o r lumber i s ex p e c t e d t o s t a b i l i z e because of a d e c l i n e i n home c o n s t r u c t i o n . Plyuood shipments R a i l u a y C a r l o a d i n g s October 1973. S t a t i s t i c s Canada #52.201 U o l . 50, #10. F i g u r e 4 Tons Loaded - D a i l y Average*, 1972-1973 Thousands o f Tons 750 650 GOO 550 . 500 450. 400 1973 / / / * / / * f \ \ \ % \ "if . / / / / 1972 '"A * ff / / / / / 1 / / / 1 / \ \ \ * * / s * * \ \ \ \ \ \ \ V \ 1 11 ' 1 1 \ \ \ \ t / / t —• \ \ \ >\ \ II " 1 11 1 / / / / / W 1 • ' J a n ' F e b . Mar. Apr. May June J u l y Aug. S e p t . ' Oct. Nov. Dec. * D a i l y average c a l c u l a t e d by d i v i d i n g tons l o a d e d by the number of days i n the month* Source: Railuia v C a r l o a d i n q s October 1973, S t a t i s t i c s Canada #52-201, Vol.50 #10. Table 10. R a i l u a y s Revenue - T o t a l Canada 1967 1968 1969 1970 1971 T o t a l o p e r - 1,519,392,966 1,568,962,071 1,583,801,797 1,679,759,268 1,805,660,746 a t i n g revenue F r e i g h t Revenue $ 1,222,168,443 1,267,364,933 1,331,263,562 1,435,967,153 1,579,704,147 F r e i g h t Revenue % o f t o t a l o p e r . r e v . 80.44- 82.89 84.05 85.49 87.49 Demurrage $ -7 748107572 7,209,795 8,654,931 9,105,506 9,729,335 Demurrage % o f t o t a l • p e r . r e v . 0.51 0.47 0.55 0.54 0.54 Source: hRaih3iii)a.y-s:sTf?aiinsp'0'rt P a r t I I - F i n a n c i a l S t a t i s t i c s 1972 - S t a t i s t i c s Canada #52-208 ro cn Table 11. 1972 R a i l w a y s Revenue C.N.R. C.P.R. B • C • R • T o t a l Canada T o t a l O p e r a t i n g Revenue F r e i g h t Revenue $ F r e i g h t Revenue % of t o t a l o p e r . revenue Demurrage $ Demurrage % of t o t a l o p e r . revenue 1,177,077,258 " 855,053,162 72.64 5,973,163 0 .47 796,406,266 44,671,508 2,195,907,534 638,505,514 42,180,423 1,688,106,880 80.17 3,398,735 0 .43 94.42 137,717 0 .31 76.87 10,654,154 0 .48 Source: R a i l w a y s T r a n s p o r t P a r t I I - F i n a n c i a l s t a t i s t i c s 1972. S t a t i s t i c s Canada #52-208. -o 28 Table 12. F r e i g h t C a r r i e d cm Canadian R a i l w a y s i n 1972 ( p e r c e n t a g e ) Wheat and o t h e r g r a i n p r o d u c t s 14.92 A g r i c u l t u r a l p r o d u c t s 1.22 Animals and t h e i r p r o d u c t s .77 Prepa r e d f o o d 1.72 Mine .Products 3D.82 F o r e s t P r o d u c t s 13.78 S t e e l and m e t a l s 3.09 V e h i c l e s and p a r t s 3.46 Petroleum 5 Chemical 1.78 Paper and paperboards 3.97 Manufactured p r o d u c t s -. m i s c e l l a n e o u s 19.48 Source: Canadian S t a t i s t i c a l Review January 1974. P u b l i c a t i o n #11-DC3, Volume 4G, #1. S t a t i s t i c s Canada 29 Cars (Thousands) 20 15 10 5 t F i g u r e 5 C a r l o a d i n g o f Revenue F r e i g h t on Canadian R a i l u a y s 1971-1973 Lumber and Plyu o o d • / N V „^  ' Paper and paper board A ' \ / \ / \ Other f o r e s t p r o d u c t s ( e x c l u d i n g pulpuood) months J F M A M J J A S O N D 1971 1972 1973 Source: Canadian S t a t i s t i c a l R e v i e u January 1974, S t a t i s t i c s Canada P u b l i c a t i o n #11-003 Vol.49 #1. 1 30 u i l l be s l i g h t l y h i g h e r . The demand f o r pu l p and n e u s p r i n t i s ex-pe c t e d t c g r c u by about 10%. The demand f o r r a i l c a r equipment from the F o r e s t I n d u s t r y u i l l t h e r e f o r e be h i g h e r i n 1974 than i n 1973. The i n f o r m a t i o n on shipments' d e s t i n a t i o n s i s very i n c o m p l e t e and i s rep r o d u c e d i n Table 13. Most o f the s a u m i l l p r o d u c t i o n i s f o r e x p o r t . Three q u a r t e r s o f the produced plyu o o d s t a y s i n Canada u i t h the r e s t m a i n l y e x p o r t e d t o Europe. About 93% D f s h i n g l e s and shakes are e x p o r t e d m a i n l y t o the U. S. ( 9 0 % ) . 5 - PRESENT CAR SHORTAGE The f o l l o u i n g s e c t i o n i s a r e v i e w o f the arguments most o f t e n brought f o r u a r d by r e p r e s e n t a t i v e s o f the r a i l u a y s and o f the F o r e s t I n d u s t r y on the causes o f c a r s h o r t a g e . I t i s not i n t e n d e d t o be a complete s t u d y o f the problem. a) Both s h i p p e r s and c a r r i e r s blame the U. S. f o r the c a r s h o r t a g e . The c h a D t i c s t a t e Df some r a i l r o a d s i n the U. S. have r e -s u l t e d i n a 45 day t u r n around time ( a v e r a g e ) f a r a c a r loa d e d a t a B. C. m i l l and goin g to the U. S. (average speed Df a c a r betueen 3 and 5 m i l e s per h o u r ) . The number o f Canadian c a r s i n the U. S. has been i n c r e a s i n g c o n s t a n t l y s i n c e January 1972 ( 9 1 % i n c r e a s e i n • t u c y e a r s ) ; d u r i n g the same time the number o f U. S. c a r s i n Canada ro s e by 39% (see t a b l e 1 4 ) . T h i s s i t u a t i o n i s v e r y a l a r m i n g and t h e pr o c e s s u i l l be d i f f i c u l t to r e v e r s e . b) The r a i l u a y s blame the s h i p p e r s f o r i n a c c u r a t e f o r e c a s t s . In 1972 the F o r e s t I n d u s t r y p r e d i c t e d a 5% i n c r e a s e i n p r o d u c t i o n i n 1972. Houever demand uas h i g h e r than e x p e c t e d and p r o d u c t i o n r o s e by 17%. s c) The B. C. R a i l u a y s i s o f t e n accused by the s h i p p e r s o f 31 Table 13. D e s t i n a t i o n o f F o r e s t P r o d u c t s S a w m i l l s Plywood S h i n g l e s & Shakes ( m i l l i o n board ( m i l l i o n square (thousand s q u a r e ) f e e t ) f e e t , 3 / 8 " b a s i s ) P r o d u c t i o n 4,265.9 2,006 2,573 Canada 808.7 1,559 166 Expor t 3,457.2 447 2,407 U.S. 2,290 2 2,372 Europe 480.4 440 14 Japan 399.8 1 Others 285 4 23 Source: C o u n c i l o f F o r e s t I n d u s t r i e s , Annual Report 1972. Table 14. Canadian Cars i n U.S. and U.S. Cars i n Canada Date Canadian Cars i n U.S. U.S. Cars i n Canada 1-1-72 28,779 22,892 7-1-72 42,654 28,331 1-1-73 48,318 28,741 6-1-73 51,157 27,028 9-1-73 44,578 32,565 12-1-73 94,935 31,823 Note: U h i l e the f i g u r e s i n c l u d e Canadian c a r s i n Mexico- and Mexican c a r s i n Canada, f e u c a r s i n these c a t e g o r i e s u o u l d a c t u a l l y be i n v o l v e d . Source: L e t t e r from W. H. Van S l y k e , E x e c u t i v e D i r e c t o r and Chairman o f the A s s o c i a t i o n o f American R a i l r o a d s , December 19, 1973. 33 h a v i n g been i r r e s p o n s i b l e i n p r e s s i n g i t s l i n e s northwards t o open new areas f o r development and t o p r o v i d e a c c e s s t o v a s t new t i m b e r s t a n d s and at the same time f a i l i n g t o p r o v i d e the n e c e s s a r y e q u i p -ment to handle the new t r a f f i c . . d) S h i p p e r s blame the government f o r o b l i g i n g C.IM.R. and C. P. R a i l t o p r o v i d e an adequate number o f c a r s t o move g r a i n s , t h e r e f o r e d i v e r t i n g some of t h e i r c a r s from the t r a n s p o r t a t i o n of f o r e s t p r o d u c t s . e) R a i l w a y s blame the s h i p p e r s f o r not l o a d i n g t h e i r c a r s t o f u l l c a p a c i t y . S h i p p e r s admit t h i s f a c t but say i t t a k e s time to c o n v i n c e t h e i r customers t o a c c e p t b i g g e r s h i p m e n t s . f ) Economists accuse r a i l w a y s o f poor management, not knowing i n p r e c i s e terms what poor u t i l i z a t i o n o f a f r e i g h t c a r t r u l y c o s t s , p a r t i c u l a r l y m i s s e d o p p o r t u n i t y c o s t s . Without t h i s knowledge i t i s d i f f i c u l t t o determine areas t o be improved. 6 - EFFECTS OF THE PRESENT CAR SHORTAGE The f o l l o w i n g i s a r e v i e w o f the main e f f e c t s o f r a i l e q u i p -ment sh o r t a g e on the F o r e s t I n d u s t r y , I t s employees and the P r o v i n c i a l Government. No d o l l a r measure o f t h o s e e f f e c t s was a t t e m p t e d . a) P r o d u c t i o n There was a c u r t a i l m e n t of p r o d u c t i o n at s e v e r a l m i l l s . b) Employee incomes The * c u r t a i l m e n t of p r o d u c t i o n r e s u l t e d i n a l o s s of man days o f employment. c) Stumpage revenue L o s t p r o d u c t i o n accounted f o r a r e d u c t i o n o f stumpage revenue to the P r o v i n c i a l Government. 34 d) P o t e n t i a l r a i l shipments Due t o inadequate c a r s u p p l y s e v e r a l companies s h i p p e d l e s s p r o d u c t s by r a i l c a u s i n g l o s s e s o f p o t e n t i a l revenues t o the c a r r i e r . e) A l t e r n a t i v e modes of t r a n s p o r t a t i o n Some s h i p p e r s uere f o r c e d t o t r u c k t h e i r p r o d u c t s e i t h e r d i r e c t l y t o the customer or t o another r a i l r o a d f o r shipment t o the customer and had t o absorb a d d i t i o n a l t r a n s p o r t a t i o n c o s t s . f ) Changes i n market mix Some companies uere f o r c e d t o s e l l t h e i r p r o d u c t s i n a d i f f e r e n t market a t p r i c e s s u b s t a n t i a l l y below those e x i s t i n g i n t h e i r t r a d -i t i o n a l m a r k e t s . g) A d d i t i o n a l i n v e n t o r y c o s t s The s h o r t a g e o f r a i l w a y equipment f o r c e d companies t o c a r r y i n v e n t o r i e s t h a t were s u b s t a n t i a l l y h i g h e r than what they c o n s i d e r t o be t h e i r optimum or s t a n d a r d o p e r a t i n g i n v e n t o r y . h) L a t e shipments Some companies l o s t revenues because they c o u l d not guarantee f i r m d e l i v e r y dates and, t h e r e f o r e , had t o s e l l t h e i r p r o d u c t below the then e x i s t i n g market l e v e l s . i ) I n v e n t o r y d e t e r i o r a t i o n Due t o the f a c t t h a t lumber and woodchip i n v e n t o r i e s were s t o c k -p i l e d f o r l o n g p e r i o d s o f t i m e , and t h e r e f o r e exposed t o i n c l e m e n t weather c o n d i t i o n s , some companies e x p e r i e n c e d a d e c l i n e i n pr o d u c t v a l u e . j ) I n t a n g i b l e c o s t s The most s e r i o u s o f thes e i s the a f f e c t o f the r e p u t a t i o n o f the company as a r e l i a b l e s h i p p e r . There i s the problem o f c l a i m s from customers t h a t are d i s s a t i s f i e d w i t h the t i m e l i n e s s on the pr o d u c t t h a t has d e t e r i o r a t e d . Cfl'APTER I I I RAIL CAR ACTIVITY PATTERNS To p l a c e demurrage i n the p r o p e r p e r s p e c t i v e i t i s i m p o r t a n t t o determine trie e x t e n t o f s h i p p e r / r e c e i v e r r a i l c a r d e t e n t i o n as a p o r t i o n o f the t o t a l l o a d to l o a d c y c l e . The s m a l l e r d e t e n t i o n as percentage o f t o t a l c y c l e , the l e s s i n f l u e n c e o f demurrage on r a i l c a r u t i l i z a t i o n . The i n f o r m a t i o n c o l l e c t e d u i l l n o t o n l y e s t a b l i s h the i n f l u e n c e o f r a i l customers on c a r t u r n around, but i t u i l l a l s o p r o v i d e a base t o a i d i n p r e d i c t i n g the e f f e c t o f f r e e time r e d u c t i o n on c a r u t i l i z a t i o n . The i n f l u e n c e o f r a i l customers on c a r u t i l i z a t i o n i s g r e a t e r than time spent h a n d l i n g the f r e i g h t a t o r i g i n and d e s t i n a t i o n . S h i p p e r s have i n f l u e n c e t h r o u g h t h e i r d e c i s i o n s on d i v e r s i o n s and reconsignments u h i c h take c a r s out o f d i r e c t p a t t e r n movements and i n t r o d u c e s time consuming i n t e r r u p t i o n s . There e x i s t s both i n Canada and the U. S. s e v e r a l h o l d i n g p o i n t s t o u a r d s u h i c h c a r s are d i r e c t e d , u a i t i n g f o r t h e i r f i n a l d e s t i n a t i o n . A l s o r e g u l a r C.N.R. and C. P. R a i l can be r e d i r e c t e d a t any time to any d e s t i n a t i o n i n No r t h America; s p e c i a l marked c a r s (DWC f o r C.N.R. and CPI f o r C. P.- R a i l ) have some r e s t r i c t i o n s r e g a r d i n g reconsignment because they are American b u i l t and must be used o n l y i n i n t e r n a t i o n a l s e r v i c e . A l s o the f a c t t h a t r a i l customers may e l e c t t o l o c a t e m i l l s and warehouses; i n l o u d e n s i t y areas s e r v e d by minimum s e r v i c e branch l i n e s has a d i r e c t e f f e c t on c a r t u r n around. 36 Those added o p e r a t i o n s have an adverse i n f l u e n c e on equipment u t i l i z a t i o n . They a f f e c t c a r t u r n a r o u n d , but they a r e - n o t under the d i r e c t c o n t r o l o f demurrage r u l e s ; t h e r e f o r e t h i s study d i d not t r y to a n a l y z e each o f thes e events nor t o determine t h e i r s p e c i f i c i n f l u e n c e on c a r c y c l e t i m e . The l o a d to l o a d c y c l e o f a c a r i s d e f i n e d as b e i n g the t o t a l time p e r i o d i t t a k e s the car to move from one l o a d i n g t o the n e x t , i n c l u d i n g u n l o a d i n g and empty movement to the p o i n t o f r e l o a d i n g . I t t a k e s many e v e n t s , a t l e a s t n i n e , t o complete one l o a d to l o a d c y c l e (as d e s c r i b e d i n f i g u r e 6 ) . They can be grouped i n t o f o u r c a t e g o r i e s (as done i n f i g u r e 7 ) : o r i g i n (time spent on the s h i p p e r s i d i n g and at the t e r m i n a l ) , l o a d e d l i n e h a u l , d e s t i n a t i o n (time spent on r e c e i v e r s i d i n g and at the t e r m i n a l ) , empty l i n e h a u l . S i n c e i t uas not p o s s i b l e t o o b t a i n the above i n f o r m a t i o n f o r U. S. t r a f f i c , the l o a d to l o a d c y c l e o f a c a r c a r r y i n g p r o d u c t s t o the U. S. uas d i v i d e d as f o l l o u s : o r i g i n , o r i g i n t o the U. S. b o r d e r , time i n U. S., U. S. bor d e r to Canadian d e s t i n a t i o n . rl - SDURCE OF INFORMATION CNR and C. P. R a i l have c o m p u t e r i z e d systems d e s i g n e d to p r o -v i d e d a i l y i n f o r m a t i o n on car l o c a t i o n i f r e q u i r e d . L o c a l e x e c u t i v e s uere very h e l p f u l i n t r y i n g t o o b t a i n c a r r u n n i n g r e c o r d s but en-cou n t e r e d two t y p e s o f problems: ( i ) C. P. R a i l ' s system keeps i n f o r m a t i o n r e g a r d i n g c a r movements o n l y f o r a p p r o x i m a t e l y 40 days and uhen s t u d y i n g c a r c y c l e s , i t i s d i f f i c u l t t o f i n d c a r s u h i c h completed a f u l l c y c l e d u r i n g 40 days (30 days f o r C.N.R.'s system);commun ( i i ) communication betueen d i f f e r e n t departments and r e g i o n s i s not a l u a y s as easy as one u o u l d hope i t to be and i t took s e v e r a l months t o get the r e -q u i r e d i n f o r m a t i o n . • rz h i n CD in 33 • CD' 3 CD 3 cx CD h i CD n ra 33 CD CD C_i • c n r-1 H " < CO C + M CD UD CD -J ro • E DJ h ) CL CD 33 m - b - b CD n c-r < CO o CD 3 C h i h i CD |LD CD cn K CD c+ CD 3 cn o CD -a DJ h i c+ 3 CD 3 c+ • "tl • I—I CD ARRIVE TERMINAL PLACED RELEASED • 33 O m o m 33 cr DEPART TERMINAL ^ . ARR IVE TERMINAL o cn 3 = —i n • ^ PLACED RELEASED DEPART TERMINAL m ~u —I < r -M m n: 33 cr ARRIVE TERMINAL Figure 7 Basic Lead to Load Cycle • j ^ w s w ^ y - SHIPPER (LOAD) CARRIER "(LOADED)" CARRIER "(EMPTY) RECEIVER (UNLOAD)" Source: Reebie Associates, Towards An E f f e c t i v e Demurrage System, U.S. Department Commerce, Jul y 1972. 39 Time c o n s t r a i n t s d i d net a l l D u study o f c a r r e c o r d s from B. C. R a i l -uays uhose c a r i n f o r m a t i o n i s not c o m p u t e r i z e d . However some data on B. C. R a i l w a y c a r s t r a n s f e r r e d on C.N.R. t r a c k s were o b t a i n e d from C.N.R. i n f o r m a t i o n system. The sample o f c a r s s t u d i e d was c a r e f u l l y chosen i n c o o p e r a t i o n w i t h C.N.R. and C. P. R a i l e x e c u t i v e s . The s e l e c t i o n was made so ty p e s o f c a r s , o r i g i n and d e s t i n a t i o n s would be r e p r e s e n t e d i n the same p r o p o r t i o n as they are i n the t r a f f i c o f f o r e s t p r o d u c t s from the Mountain R e g i o n . 2 - RESULTS . D e t a i l e d r e s u l t s from Canadian t r a f f i c and Canada -~U. S. t r a f f i c are p r e s e n t e d s e p a r a t e l y i n t a b l e s 15 and 16 and then combined to o b t a i n average l o a d t o l o a d c y c l e s i n t a b l e 17. The r e s u l t s from t a b l e 17 were o b t a i n e d by a l l o c a t i n g d i f f e r e n t w e i g h t s t o data from' t a b l e s 15 and 16. Those w e i g h t s are a f u n c t i o n o f 1973 share o f t r a f f i c between the t h r e e r a i l r o a d s ( 4 0 % f o r C.N.R., 33% f o r C. P. R a i l , 22% f o r B. C. R a i l w a y , 5% m i s c e l l a n e o u s ) and w i t h i n each r a i l r o a d , the p o r t i o n o f t r a f f i c c a r r i e d by d i f f e r e n t t y p e s o f c a r s (C.N.R.: F l a t 38%, Box 62%; C. P. R a i l : F l a t 27%, Box 73%; B. C. R a i l w a y s : F l a t 35%, Box 6 5 % ) . The l o a d to l o a d c y c l e s found i n the stu d y o f Canadian t r a f f i c were c l o s e l y c e n t e r e d around the mean o f 28.51 days and 43.21 days f o r U. S. t r a f f i c . As seen i n f i g u r e 8 c e r t a i n c a r s e x h i b i t e d c y c l e s as s h o r t as 19 days and l e s s , and o t h e r s as l a r g e as 35 days and more, but over 8 5 % of the c a r s measured demonstrated c y c l e time w i t h i n f i v e days o f the mean (Canadian t r a f f i c ) . T a b l e 15. Lead t o Load C y c l e ( d a y s ) Canadian T r a f f i c O r i g i n Loaded L i n e D e s t i n a t i o n Empty L i n e T o t a l Haul H a u l C y c l e C.N.R. Box B u l k h e a d F l a t 3.1 2.70 5.96 5.98 8.59 7.58 12.1 10.1 29.75 26.36 C P . R a i l B u l k h e a d F l a t 2.73 5.83 8.67 8.19 25.42 S i z e o f sample: C.N.R. Box 100 Bu l k h e a d 50 C P . R a i l B u l k h e a d 50 T a b l e 16. Load t o Load C y c l e ( d a y s ) Canada - U.S. T r a f f i c O r i g i n O r i g i n t o U.S. U.S.Border US Border ' T o t a l t o Canadian C y c l e D e s t i n a t i o n C.N.R. West Route E a s t Route B u l k h e a d F l a t Box B u l k h e a d F l a t Box 2.1 2.7 6.9 6.9 25.2 25.2 2.1 2.7 9.8 9.2 13 15.3 8 8 12 13.8 42.2 42.8 36.9 41 C P . R a i l West Route B u l k h e a d • F l a t 2.68 6.98 28.84 9.55 48.05 B. C R a i l w a y s West Route ( v i a CN) B u l k h e a d F l a t Box 4.7 6.1 6.9 6.9 25.2 25.2 8 a 44.8 46.2 S i z e o f sample - CNR and B.C.R. unknown. The r e s u l t s were p r o v i d e d by CNR and no i n f o r m a t i o n r e g a r d i n g the s i z e o f the sample c o u l d be o b t a i n e d . C P . R a i l - 65 b u l k h e a d f l a t c a r s ( T o t a l p o p u l a t i o n 600 c a r s , h a l f o f them b e i n g i n the U.S. on an average day.) Frequency F i g u r e B Frequency D i s t r i b u t i o n c f C y c l e Times (Canadian t r a f f i c ) ID 7.5 4 19 (-) 20 21 22 23 2k 25 26 27 28 29 3D Load t c l e a d c y c l e time (days) 31 32 33 3k 35 ( + ) 43 Table 17. Average l o a d t o l o a d c y c l e (days) (Cars c a r r y i n g f o r e s t p r o d u c t s ) O r i g i n Loaded L i n e Haul D e s t i n a t i o n Empty L i n e Haul T o t a l Canadian t r a f f i c 2.98 5.94 8.44 11.15 28.51 O r i g i n O r i g i n t o US Border U.S. U.S.Border to Can. d e s t i n a t i o n T o t a l Canada - U.S. t r a f f i c 3.7 7.65 22.2 9.66 43.21 A n a l y s i s o f T a ble 17 r e s u l t s i n d i c a t e s some f a c t s of i n t e r e s t : (i.0 l o a d i n g i s the s m a l l e s t component o f a c a r c y c l e ( 1 0 % f o r Canadian t r a f f i c , 8.8% f o r U-. S. t r a f f i c ) ; ( i i ) u n l o a d i n g i s 2.8 tim e s l o n g e r than l o a d i n g i n the case • o f Canadian t r a f f i c ; ( i i i ) c y c l e o f c a r s a l l o c a t e d t o U. S. t r a f f i c i s 1.5 tim e s l o n g e r than' t h e c y c l e o f c a r s s t a y i n g i n Canada. The time spent at the o r i g i n and d e s t i n a t i o n i n c l u d e time on the customer s i d i n g and t e r m i n a l t i m e . Cars sometimes have t o u a i t f o r s e v e r a l days between the time they a r r i v e at the t e r m i n a l and the time they are p l a c e d . The same happens where a c a r i s r e l e a s e d . T h e r e f o r e the time spent a t the o r i g i n and d e s t i n a t i o n i s g r e a t e r than the time spent f o r - l o a d i n g and u n l o a d i n g . T h i s breakdown o f t i m e s i s v e r y d i f f i c u l t t o o b t a i n from t h e r a i l w a y s ' r e c o r d s . However i t was p o s s i b l e - f o r 50 of the 110 C. P. R a i l c a r s s t u d i e d t o determine the p o r t i o n o f time under s h i p p e r c o n t r o l as a percentage o f time a t o r i g i n . For 'the 50 c a r s 69% o f o r i g i n time was spent on s h i p p e r s i d i n g or 1.9 days out o f 2.73 d a y s ) . I t would be very hazardous t o e x t r o -p o l a t e r e s u l t s from such a s m a l l sample to a l l s h i p p e r s o f f o r e s t p r o d u c t s . Houever i t r e i n f o r c e s the c o n c l u s i o n s from t a b l e 16, 17, and 18, t h a t the o p p o r t u n i t y f o r major improvements i n c a r u t i l i z -a t i o n l i e s i n i m p r o v i n g c a r r i e r o p e r a t i n g p r a c t i c e s and c a r d i s -t r i b u t i o n p r o c e d u r e s . Time spent on the s h i p p e r s i d i n g i s s m a l l compared to the t o t a l c y c l e . I t i s i n t e r e s t i n g t o compare the r e s u l t s from t a b l e s 15, 16 and 17 u i t h the average l o a d t o l o a d c y c l e o f a C.IM.R. c a r (average f o r the t o t a l f l e e t o f c a r s ) . T a ble 18. Load to l o a d c y c l e components (C.N.R. c a r s ) days % o f t o t a l en r o u t e empty 1.24 6.1 en r o u t e l o a d e d 1.51 . 7.4 u n l o a d i n g 2.75 13.5 l o a d i n g 2.75 13.5 s t a n d i n g i n y a r d l o a d e d 5.1 25. s t a n d i n g i n y a r d empty 7.0.3 34.5 T o t a l 20.38 100 Source: John G r a h v i c k , V i c e P r e s i d e n t , Research and Development, C.N.R. Symposium - Centre f o r T r a n s p o r t a t i o n S t u d i e s , U.B.C. Feb. 28, 1974. The l o a d t o l o a d c y c l e of c a r s c a r r y i n g f o r e s t p r o d u c t s i s h i g h e r than average and so are each component o f the c y c l e . Tuo o f the r easons are f u r t h e r d e s t i n a t i o n s and o f t e n l a n g e r u n l o a d i n g . p r o c e s s (compared u i t h u h e a t , c o a l and potash f o r example). k5 CHAPTER IV DEMURRAGE 1 - HISTORY OF DEMURRAGE7 In the l a t e 1800 1s v a r i o u s i n d i v i d u a l r a i l r o a d s i n the U. S. and i n Canada, began to charge demurrage on t h e i r own. A demurrage system uas d i f f i c u l t to e n f o r c e by a s i n g l e c a r r i e r because o f c o m p e t i t i v e p r e s s u r e , and soon, the need f o r a u n i f i e d s e t of de-murrage r u l e s uas r e c o g n i z e d by everybody. In 1906, the Board o f T r a n s p o r t Commissioners f o r Canada, a f t e r a comprehensive s t u d y of the m a t t e r , promulgated a s e t o f r u l e s to be a p p l i e d by a l l r a i l u a y s under t h e i r j u r i s d i c t i o n . Tuo ye a r s l a t e r the American R a i l u a y A s s o c i a t i o n proposed a N a t i o n a l Code o f Demurrage R u l e s . A f t e r a year o f h e a r i n g s , a u n i f o r m code uas adopted i n the U. S. and.became e f f e c t i v e i n 1910. In 1952 the Canadian I n d u s t r i a l T r a f f i c League I n c . s u b m i t t e d an a p p l i c a t i o n t o the Board t o have the demurrage t a r i f f s r e v i e u e d and c o n s o l i d a t e d i n t o a s i n g l e t a r i f f . As a r e s u l t o f t h i s a p p l i c a t i o n , j o i n t meetings uere h e l d betueen the r a i l u a y s . a n d the v a r i o u s s h i p p e r s ' o r g a n i z a t i o n s and agreement uas reached on a number o f m o d i f i c a t i o n s and changes u h i c h uere p u b l i s h e d i n t a r i f f CTC #6 e f f e c t i v e January 1, I960. Canadian I n s t i t u t e o f T r a f f i c and T r a n s p o r t a t i o n . C e r t i f i c a t e  Course 2nd e d i t i o n , Aug. 1967. 46 T h i s t a r i f f forms the b a s i s f o r the demurrage r u l e s e x i s t i n g now, a l t h o u g h d u r i n g the y e a r s , e x c e p t i o n s and m o d i f i c a t i o n s have been i n c l u d e d p r o d u c i n g the more complex v e r s i o n o f t a r i f f CTC #8 e f f e c t i v e January 5, 1972. The r u l e s o f t h i s l a t e s t t a r i f f w i l l be d i s c u s s e d i n s e c t i o n 4 o f t h i s c h a p t e r . 2 - PURPOSE OF DEMURRAGE The Pocket O x f o r d D i c t i o n a r y ( 4 t h e d i t i o n r e v i s e d i n 1966) d e f i n e s the term demurrage as f o l l o w s : " r a t e or amount payable to s h i p ( o r t r u c k o r r a i l w a y ) owner by c h a r t e r e r f o r f a i l u r e ' t o l o a d or d i s c h a r g e s h i p ( o r t r u c k or r a i l c a r ) w i t h i n the time a l l o w e d " . A v e r y i n t e r e s t i n g case was c o n s i d e r e d by the Supreme Court o f Canada i n which the Co u r t d i s c u s s e d the p r i n c i p l e u n d e r l y i n g de-murrage as f o l l o w s : " I t s (Demurrage) a p p r o p r i a t e n e s s to r a i l w a y c a r r i a g e can be assumed to have been r e c o g n i z e d and a c t e d upon both i n England and i n North America c e r t a i n l y from the middle o f the N i n e -t e e n t h c e n t u r y . ~ Delay i n l o a d i n g or u n l o a d i n g c a r l o a d s o f f r e i g h t v i o l a t e s the i m p l i e d u n d e r s t a n d i n g when equipment i s p l a c e d at the d i s p o s a l o f a s h i p p e r o r consignee t h a t no more than r e a s o n -a b l e time s h a l l be t a k e n f o r e i t h e r purpose. The p r o f i t a b l e and e f f i c i e n t use of equipment i s an i m p o r t a n t i t e m o f c o s t s r e f l e c t e d i n the f r e i g h t r a t e s charges and i s an e s s e n t i a l i n good r a i l w a y management. That a r a i l w a y i s to s u p p l y e x p e n s i v e equipment i n o r d e r t o f u r n i s h g r a t i s , a s t o r a g e means f o r s h i p p e r s and c o n s i g n e e s , r e v e a l s , an i t s mere s t a t e m e n t , i t s own a b s u r d i t y . Under the Act ( R a i l w a y A c t ) the Board o f T r a n s p o r t Commissioners f o r Canada, has no j u r i s d i c t i o n i n e f f e c t t o compel a r a i l w a y to g i v e a s e r v i c e o r s u f f e r an economic d e t r i m e n t o f such n a t u r e w i t h o u t a p p r o p r i a t e compensation; and a l t h o u g h t h a t t r i b u n a l may c a n c e l t a r i f f o f r a t e s and t o l l s , i t does so o n l y on the ground t h a t they are u n r e a s o n a b l e , e i t h e r , too h i g h or too low, or are u n j u s t l y d i s c r i m i n a t o r y ; a n d . i f i t does not s u b s t i t u t e r a t e s o f i t s own, the c a r r i e r i s e n t i t l e d to submit o t h e r r a t e s and have them passed upon u n t i l the un r e a s o n a b l e n e s s or u n j u s t d i s c r i m i n a t i o n i s found t o be e l i m i n a t e d . " B Demurrage has been acknowledged as an i m p o r t a n t t o o l i n s t i m -u l a t i n g r a i l c a r u t i l i z a t i o n . By p r o v i d i n g p e n a l t i e s f o r l o n g de-t e n t i o n o f r a i l c a r s i t encourages customers t o r e l e a s e t h i s equipment back t o the c a r r i e r somewhat sooner than they o t h e r w i s e would be i n -c l i n e d t D . B e f o r e the i n s t i t u t i o n o f demurrage c h a r g e s , i t was common p r a c t i c e f o r s h i p p e r s t D r e t a i n c a r s f o r l o a d i n g and u n l o a d i n g j u s t as they p l e a s e d , c r e a t i n g a r t i f i c i a l c a r s h o r t a g e s . U l t i m a t e l y the improvements i n u t i l i z a t i o n which demurrage s t i m u l a t e s s h o u l d work t o the b e n e f i t o f c a r r i e r s and s h i p p e r s a l i k e . T h i s p r i n c i p l e i s a c c e p t e d by both p a r t i e s . However when the r a i l w a y s proposed t o reduce " f r e e t i m e " t o improve r a i l c a r u t i l i z a t i o n , r a i l u s e r s c h a l -l e n g e d t h i s j u s t i f i c a t i o n and demurrage has now become a c o n t r o v e r s i a l s u b j e c t ; v a r i o u s p a r t i e s have q u e s t i o n e d whether the demurrage charge s h o u l d be c o n s i d e r e d as a s t o r a g e charge, a r e n t a l o f equipment, a p e n a l t y f o r d e l a y o r an i n c e n t i v e f o r e a r l y r e l e a s e . Demurrage t o l l s are not made p r i m a r i l y f o r the purpose o f revenue but as a d e t e r r e n t a g a i n s t the d e t e n t i o n o f equipment and t o compensate the r a i l w a y , i n a l i m i t e d way, f o r the use of i t s c a r s . 3 - ADMINISTRATION The Canadian Car Demurrage Bureau has been a p p o i n t e d by the r a i l w a y s as t h e i r i n s t r u m e n t i n h a n d l i n g a l l m a t t e r s r e l a t i n g t o de-murrage. The bureau i s r e s p o n s i b l e f o r p u b l i s h i n g the t a r i f f and Referen c e #347512 North West L i n e E l e v a t o r s Assoc. and U n i t e d G r a i n Growers L t d . vs CPR et a l . , c i t e d i n Canadian I n s t i t u t e o f T r a f f i c & T r a n s p o r t a t i o n , C e r t i f i c a t e Course 2nd e d i t i o n Aug. 1967. e n f o r c i n g i t . The f u n c t i o n o f the bureau i s r e s t r i c t e d to making sure t h a t r a i l r o a d customers are b i l l e d f o r and pay f o r a l l charges t h a t are due. T r a v e l l i n g r e p r e s e n t a t i v e s make p e r i o d i c i n s p e c t i o n at a l l agency s t a t i o n s t o ensure t h a t the r u l e s are a p p l i e d f a i r l y and w i t h o u t u n j u s t d i s c r i m i n a t i o n . k - CANADIAN RULES The r u l e s d i s c u s s e d i n t h i s s e c t i o n are from t a r i f f CTC #8 e f f e c t i v e January 5, 1972. Comparisons w i l l be made w i t h U. S. r u l e s and a l s o those proposed by Reebie's A s s o c i a t e s i n t h e i r study "Toward an E f f e c t i v e Demurrage System". a) S p e c i a l arrangements These are demurrage charges p u b l i s h e d i n t a r i f f s o t h e r than the one mentioned above. Examples are s p e c i a l r e g u l a t i o n s g o v e r n i n g : (a) e x p o r t or import t r a f f i c , (b) u n l o a d i n g excess from o v e r l o a d e d c a r s or o t h e r s p e c i a l arrangements c o n c e r n i n g e x p o r t t r a f f i c at E a s t e r n Canadian p o r t s , ( c ) d e t e n t i o n charges on r e f r i g e r a t o r c a r s , and (d) d e t e n t i o n charges f o r c a r s on the t r a c k s o f the N a t i o n a l Harbours Board a t the p o r t o f M o n t r e a l . b) Rule 1: Cars s u b j e c t t o the r u l e s and e x c e p t i o n s . A l l c a r s h e l d f o r or by c o n s i g n o r s or c o n s i g n e e s e x c e p t : - p r i v a t e c a r s : l o a d e d on t r a c k s o f owner : empty anywhere - r e f u s e d and un c l a i m e d f r e i g h t , s u b s e q u e n t l y s o l d by the r a i l r o a d - f r e i g h t a w a i t i n g water t r a n s p o r t a t i o n - f r e i g h t bound f o r U. S. w h i l e h e l d at s p e c i f i c s t a t i o n s (U. S. t a r i f f a p p l i e s ) . 49 I n s t e a d o f h a v i n g one t a r i f f w i t h many e x c e p t i o n s (as i t i s neu the case i n the U. S. t a r i f f ) , the Reebie's s t u d y proposes t o have most of the e x c e p t i o n s c a n c e l l e d and t o have the r e m a i n i n g pub-l i s h e d i n a d i f f e r e n t t a r i f f . c) Rule 2: N o t i f i c a t i o n IMotice o f a r r i v a l i s sent a f t e r a r r i v a l o f the car at des-t i n a t i o n . The consignee i s h e l d t o have been n o t i f i e d a t 7:00 A.M. of the day f o l l o w i n g t r a n s m i t t a l ( o r date o f m a i l i n g o f n o t i f i c a t i o n ) . For f i r m s w i t h p r i v a t e s i d i n g s , the d e l i v e r y o f a c a r on such s i d i n g -c o n s t i t u t e s n o t i f i c a t i o n o f a r r i v a l . d) Rules 3 and 4: D e l i v e r y o f c a r s f o r l o a d i n g and u n l o a d i n g A f t e r n o t i f i c a t i o n , the c a r r i e r has to s p e c i f y the ex a c t l o c a t i o n o f the c a r . Any d e l a y i n g i v i n g such i n f o r m a t i o n i s added to the f r e e time a l l o w a n c e . A l s o when d e l i v e r y i s d e l a y e d because o f the l a c k o f t e c h n i c a l f a c i l i t i e s a t the r a i l w a y t e r m i n a l (not enough cranes a v a i l a b l e f o r example) the f r e e time s t a r t s from the f i r s t 7:00 A.M.. a f t e r n o t i c e has been sent t h a t the c a r s can be lo a d e d o r unloa d e d . Each consignee i s c o n s i d e r e d to have had u n i n t e r r u p t e d use o f the f a c i l i t y when one or more c a r s are p l a c e d . e) Rule 5: Free time a l l o w a n c e "48 hours f r e e time s h a l l be a l l o w e d f o r l o a d i n g o r u n l o a d i n g a l l commodities."' S a t u r d a y s , Sundays and h o l i d a y s are e x c l u d e d i n f i g u r i n g the f r e e time a l l o w a n c e s . T h i s m o d i f i c a t i o n was added t o t a r i f f CTC #6 e f f e c t i v e January 1, 1960, t o b r i n g t h i s r u l e i n l i n e w i t h the 5 day week a p p l i c a b l e g e n e r a l l y i n i n d u s t r y and by the r a i l -ways' own f r e i g h t o f f i c e s . "Twenty-four h o u r s , i f n e c e s s a r y , s h a l l be a l l o w e d f o r any or a l l o f the f o l l o w i n g p u r p o s e s : 50 - f o r c l e a r i n g customs; - f o r g i v i n g o r d e r s f o r s p e c i a l placement except t h a t c onsignee s e r v e d by another than p u b l i c d e l i v e r y t r a c k or i n d u s t r i a l i n t e r c h a n g e t r a c k s h a l l not be e n t i t l e d t o an a l l o w a n c e f o r t h i s purpose i f d e l i v e r y i s taken on such t r a c k ; - f o r d i v e r s i o n , reconsignment o r reshipment i n the same ca r p r o v i d e d t h a t no such a l l o w a n c e s h a l l be made f o r a reconsignment which does not i n v o l v e the movement of the car t o a p o i n t beyond the same i n d u s t r y o f d e l i v e r y y a r d ; - when c a r s are stopped i n t r a n s i t f o r c o m p l e t i o n o f l o a d i n g , or p a r t i a l u n l o a d i n g ; - i n t h a t part" o f Canada, Thunder Bay and west, o n l y 24 hours f r e e time s h a l l be a l l o w e d f o r l o a d i n g g r a i n d u r i n g the months o f September, October and November...". The f r e e time a l l o w a n c e s are b a s i c a l l y the same i n the U. S. In t h e i r s t u d y , Reebie's A s s o c i a t e s proposed t h a t one of the f o l l o w i n g r u l e s s h o u l d be chosen: ( i ) t o d e f i n e the demurrage day as the time between two s w i t c h e s w i t h a minimum f r e e time of 22 hours and no .extra days; ( i i ) a f r e e time a l l o w a n c e o f 24 hours from placement w i t h S a t u r d a y s , Sundays and h o l i d a y s f r e e when p a r t o f the f r e e t i m e ; ( i i i ) a f r e e ,time a l l o w a n c e o f 24 hours from the f i r s t 7.DD A.M. a f t e r placement and f r e e weekends and h o l i d a y s when p a r t o f f r e e t i m e . 51 f ) Rule 6: Computing time "Time i s computed from the f i r s t 7:00 A.M. a f t e r n o t i c e o f a r r i v a l i s sent or g i v e n t o the c o n s i g n e e . " "Forwarding d i r e c t i o n s f o r a c a r lo a d e d outbound, sent by c o n s i g n o r by m a i l to an agent o f t h i s r a i l u a y u i l l be c o n s i d e r e d as ha v i n g been r e c e i v e d a f t e r 7:00 A.M. of the date r e c e i v e d , when m a i l e d on a p r i o r date p r o v i d e d c a r i s ready f o r f o r u a r d i n g a t t h a t t i m e " . "When a car i s a p p r o p r i a t e d f o r l o a d i n g p r i o r t o 11:00 A.M. time s h a l l be computed from 1:00 A.M. o f the date a p p r o p r i a t e d , p r o v i d e d the car uas i n an a c c e s s i b l e p o s i t i o n at 7:00 A.M. I f the car uas not i n such p o s i t i o n at 7:00 A.M. or i f l o a d i n g i s commenced at or a f t e r 11:00 A.M., time s h a l l be computed from 7:00 A.M. o f the f o l l o u i n g day." Free time a l l o u a n c e i s a l s o extended when bad ueat h e r r e n d e r s l o a d i n g or u n l o a d i n g i m p o s s i b l e d u r i n g b u s i n e s s h o u r s . g) R u l e s 7 and 8: Demurrage charges For the f i r s t f o u r days f o l l o u i n g f r e e time a l l o u a n c e , the charge per day or f r a c t i o n i s $10. T h e r e a f t e r the charge per day or f r a c t i o n i s $20. The o n l y e x c e p t i o n i s f o r c a r s h e l d because of i n d u s t r i a l s t r i k e . In t h e U. S., the charge per day or f r a c t i o n i s $10 f o r the f i r s t k days a f t e r f r e e time a l l o u a n c e e x p i r e d , $20 f o r the tuo f o l l o u i n g days and $30 f o r each day t h e r e a f t e r . Reebie's A s s o c i a t e s proposed t h a t f o r the f i r s t tuo days f o l l o u i n g f r e e t i m e , the charge s h o u l d be e q u a l t o the per diem r a t e o f the car u h i c h uas d e t a i n e d and $20 f o r each day t h e r e a f t e r . h) Rule 9: C l a i m s -• Cla i m s f o r f r o z e n or congea l e d l a d i n g , run-arounds, b u n c h i n g -52 c a r s f a r l o a d i n g or u n l o a d i n g "must be p r e s e n t e d i n w r i t i n g t o the c a r r i e r ' s agent w i t h i n s i x t y days a f t e r the date on which the b i l l f o r demurrage i s r e n d e r e d . " i ) Rule ID: IMon payment " I f payment of demurrage charges p r o p e r l y due Dn c a r s h e l d on p u b l i c d e l i v e r y t r a c k s be r e f u s e d , d e l i v e r y o f o n l y such c a r o r c a r s on which demurrage charges are due may be w i t h h e l d by means of s e a l i n g or l o c k i n g or by p l a c i n g where such c a r s s h a l l not be a c c e s s -i b l e . . " For c a r s on o t h e r than p u b l i c d e l i v e r y t r a c k s " d e l i v e r y may be suspended." 5 - AVERAGE AGREEMENT The average demurrage agreement has been i n e f f e c t i n the U. S. s i n c e 1909, but does not a p p l y i n Canada. I t ' s p r i n c i p l e i s t o p r o v i d e an i n c e n t i v e t o the s h i p p e r t o r e l e a s e c a r s q u i c k l y because by doing so, some of the demurrage expense i s e l i m i n a t e d . C r e d i t s are g r a n t e d f o r each c a r r e l e a s e d i n 2k hours or l e s s and d e b i t s are charged when c a r s are h e l d more than kB h o u r s . At the end o f the month, the customer i s charged o n l y f o r excess d e b i t s accumulated. T h i s reduces the number o f demurrage c l a i m s and l e a d s t o monthly b i l l i n g o f a c c o u n t s . However from the v i e w p o i n t o f the r a i l r o a d s a v e r a g i n g has a s e r i o u s d i s a d v a n t a g e . The Reebie's s t u d y found t h a t " i t r educes the e f f e c t i v e demurrage r a t e t o r o u g h l y h a l f the p u b l i s h e d r a t e . " A l s o companies who have accumulated c r e d i t s d u r i n g the f i r s t p a r t of the month tend t o slow down the r e t u r n o f t h e i r c a r s toward the end o f the month ( c r e d i t s cannot be c a r r i e d f o r w a r d from one month,tri a n o t h e r ) . 53 6 - VARIABLE DEMURRAGE For the most p a r t demurrage i s a p p l i e d u n i f o r m l y to a l l c a r t y p e s , commodities, and months throughout the y e a r . V a r i o u s s h i p p e r o r g a n i z a t i o n s have argued u n f a i r n e s s i s caused when r e l y i n g upon a r a t e w i t h a u n i f o r m a p p l i c a t i o n and suggested the c r e a t i o n o f a v a r i a b l e demurrage system. Under such a system r a t e s would v a r y w i t h c a r t y p e , commodities c a r r i e d and time o f the y e a r . T h i s would r e q u i r e the i d e n t i f i c a t i o n o f the demand p a t t e r n o f d i f f e r e n t c a r t y p e s , the v a l u e o f each c a r , and h a n d l i n g p r a c t i c e s o f each commodity. Problems e x i s t not o n l y w i t h i d e n t i f i c a t i o n o f the v a r i a b l e s , but a l s o w i t h enforcement o f a m u l t i s t r u c t u r e d demurrage p l a n . 7 - DEMURRAGE STATISTICS U n f o r t u n a t e l y v e r y l i t t l e s t a t i s t i c a l d a t a are a v a i l a b l e from the Canadian .Car Demurrage Bureau. Table 19 shows the percentage o f c a r s r e l e a s e d w i t h i n f r e e t i m e . I t shows t h a t t h i s p ercentage has been i n c r e a s i n g s i n c e January 1972, and t h a t the percentage o f c a r s e a r n i n g demurrage i s s l i g h t l y h i g h e r i n E a s t e r n Canada. I t a l s o shows t h a t very few c a r l o a d s are s u b j e c t to demurrage. Between 3% and 1% of c a r s . i n Canada are h e l d beyond f r e e t i m e . However t h i s t a b l e does not show how many c a r s earned ffilD a day and t>2Q a day, nor the number o f c a r s e a r n i n g demurrage at l o a d i n g and u n l o a d i n g . I t would a l s o be most i n s t r u c t i v e to have i n f o r m a t i o n on demurrage charges f o r each type o f commodity at a time when companies ask f o r some k i n d o f v a r i a b l e demurrage. These d a t a c o u l d be c o m p i l e d from the a c c o u n t i n g r e c o r d s o f the Demurrage Bureau i n Winnipeg and M o n t r e a l and be used t o i d e n t i f y u h i c h i n d u s t r i e s are p e n a l i z e d by the p r e s e n t system. 55 Table 19 DEMURRAGE IN CANADA Month No. o f Cars P e r c e n t R e l e a s e d Number of Cars Reported W i t h i n Free Time E a r n i n g De-murrage Western E a s t e r n Western E a s t e r n Western E a s t e r n 1972 January 144,077 193 268 95.79 92.85 5,860 13 803 February 163,952 198 751 96.45 93.12 5,751 " 13 662 March 171,723 . 244 676 96.46 93.34 6,020 16 177 A p r i l 171,918 228 859 97.17 93.52 4,820 14 821 May 206,710 238 660 97.32 93.54 5,562 15 416 June 214,112 248 430 97.33 94.14 5,687 14 562 J u l y 192,144 219 428 96.99 93.10 5,648 15 121 August 191,856 221 414 96.92 93.66 5,970 1^ 031 September. 218,398 240 675 96.41 93.63 7,767 15 329 October 202,078 242 330 96.63 93.92 6,748 14 721 November 192,917 241 953 96.88 93.57 5,791 15 535 December 185,556 215 667 97.47 '92.92 4,637 15 257 1973 ^ January 180,627 232 786 96.78 93.24 5,674 15 736 February 174,076 234 786 96.53 93.19 6,074 15 978 March 189,489 249 031 97.16 93.63 5,392 15 846 A p r i l 197,427 257 ,976 97.27 94.34 5,290 14 579 May 205,524 255 ,452 97.01 93.90 6,113 15 564 June 200,436 245 ,474 97.35 94.17 5,329 14 294 J u l y 176,679 219 ,781 97.33 94.04 4,732 13 077 August 123,645 136 ,997 97.73 93.87 2,796 . 8 393 R e f e r e n c e . - Canadian Car Demurrage Bureau - Western L i n e s - Winnipeg, Manitoba - E a s t e r n L i n e s - M o n t r e a l Quebec CHAPTER V THE CUSTOMER VIEWPOINT The p r e v i o u s c h a p t e r s examined c a r s u p p l y and u t i l i z a t i o n and the importance of demurrage. T h i s s e c t i o n o f the study was performed t o p r o v i d e customer i n p u t ; demurrage cannot be e v a l u a t e d or a n a l y z e d by l o o k i n g o n l y at the r e s u l t s o f c a r movements. To g a i n a complete u n d e r s t a n d i n g o f demurrage one must st u d y the reasons why c a r s are handled the uay they are at the customers' dock or f a c i l i t y . A s u r v e y o f s h i p p e r s and r e c e i v e r s o f f o r e s t p r o d u c t s was undertaken and the r e s u l t s are p r e s e n t e d i n t h i s c h a p t e r . The r e s u l t s , a l t h o u g h thought to be s t a t i s t i c a l l y v a l i d , have to be c o n s i d e r e d w i t h g r e a t p r e c a u t i o n . The q u e s t i o n n a i r e was m a i l e d a t a time of c o n t r o v e r s y w i t h r e g a r d to changes i n demurrage and respondents might have o v e r r e a c t e d to the r a i l w a y ' s p r o p o s a l t o reduce f r e e t i m e . The method chosen t o e v a l u a t e what changes i n demurrage r u l e s might mean i n terms o f c a r u t i l i z a t i o n was to go t o the i n d i v i d u a l s h i p p e r o r r e c e i v e r and ask how he would r e a c t t o such changes. Other methods were a v a i l a b l e , such as t r y i n g t o c o n s t r u c t the demand curve f o r r a i l s e r v i c e , s t u d y i n g demurrage i n f l u e n c e on r a i l c a r u t i l i z a t i o n i n o t h e r c o u n t r i e s , e t c . Many arguments a g a i n s t any method can be e a s i l y found; any recommendations f l o w i n g from e s t i m a t e s D f the demand curve f o r r a i l s e r v i c e are i n v a l i d i n the absence o f o p t i m a l o u t p u t s i n a l l 57 9 the a l t e r n a t i v e s e r v i c e s , i f any. What i s a p p l i c a b l e t o r a i l r a c d s i n o t h e r c o u n t r i e s might not be to the Canadian r a i l r o a d s . Any method r e q u i r e s some s u b j e c t i v e a d j u s t m e n t s . The advantage o f the chosen method uas to p r o v i d e much i n f o r m a t i o n on r a i l customers p r a c t i c e s and a b e t t e r u n d e r s t a n d i n g o f t h e i r b e h a v i o u r . R e s u l t s o f t h i s s u r v e y combined u i t h i n f o r m a t i o n on p r e s e n t c a r u t i l i z a t i o n u i l l p r o v i d e the n e c e s s a r y i n p u t t o measure t o uhat e x t e n t f r e e time r e d u c t i o n would a f f e c t c a r u t i l i z a t i o n i n the F o r e s t I n d u s t r y . 1 - METHDDOLDGY The q u e s t i o n n a i r e ( r e p r o d u c e d i n appendix I I I ) uas m a i l e d to 100 s h i p p e r s and 28 r e c e i v e r s o f f o r e s t p r o d u c t s . To o b t a i n data from r a i l r o a d customers a t a l o c a l l e v e l , i t uas s e n t t o the m i l l or the warehouse uhere a shipment o r i g i n a t e d o r t e r m i n a t e d . I t uas reasoned t h a t t h o s e l o c a l l y r e s p o n s i b l e f o r the h a n d l i n g , l o a d i n g and u n l o a d i n g o f r a i l c a r s u o u l d be most knou l e d g e a b l e about the use of r a i l c a r s , p a r t i c u l a r l y u i t h r e g a r d t o d e t e n t i o n and demurrage. A l e t t e r uas a t t a c h e d t o the q u e s t i o n n a i r e t o s t r e s s t h a t n e i t h e r the i d e n t i t y o f the company nor the l o c a t i o n would be r e v e a l e d . The sample o f s h i p p e r s o f f o r e s t p r o d u c t s s u r v e y e d was c a r e -f u l l y s e l e c t e d i n c o o p e r a t i o n w i t h the t r a n s p o r t a t i o n department o f the C o u n c i l o f F o r e s t I n d u s t r i e s o f B r i t i s h C olumbia. T h e ' s e l e c t i o n was made so t h a t the type o f p r o d u c t s s h i p p e d , s i z e o f the s h i p p e r s and the r a i l w a y c a r r i e r used would be r e p r e s e n t e d i n the sample i n the same p r o p o r t i o n as they are i n the Mountain R e g i o n . Time and f i n a n c i a l c o n s t r a i n t s i n d i c a t e d t h a t s t a t i s t i c a l E. J . Misham, I n t e r p r e t a t i o n o f the B e n e f i t s o f P r i v a t e  T r a n s p o r t s , London S c h o o l o f Economics. 58 r e p r e s e n t a t i v e n e s s c o u l d not be o b t a i n e d i n the survey of r e c e i v e r s of f o r e s t p r o d u c t s because o f the g r e a t number of p l a c e s uhere s h i p -ments t e r m i n a t e . Data from the q u e s t i o n n a i r e m a i l e d t o r e c e i v e r s may not be s t a t i s t i c a l l y r e p r e s e n t a t i v e . F u r t h e r study would be r e q u i r e d t o a s s u r e s t a t i s t i c a l v a l i d i t y . 2 - RESULTS 86% o f the s h i p p e r s and 57% of the r e c e i v e r s c o n t a c t e d r e -t u r n e d the. q u e s t i o n n a i r e answered. The l a r g e number of answers and t h e i r completeness stem from the f a c t t h a t demurrage i s a r e c u r r i n g problem and t h a t f r e e time r e d u c t i o n i s now the s u b j e c t of a g r e a t d e a l o f c o n t r o v e r s y . R e s u l t s from the s h i p p e r and r e c e i v e r s u r v e y s w i l l , be p r e s e n t e d s e p a r a t e l y and r e s u l t s from s h i p p e r s w i l l be p r e s e n t e d f i r s t . D e t a i l e d r e s u l t s , g o i n g through each q u e s t i o n of the survey are p r e s e n t e d i n appendix V. In t h i s c h a p t e r r e s u l t s are grouped under the f o l l o w i n g h e a d i n g s : 1- - s h i p p e r sample d i s t r i b u t i o n , 2 - economics of d e t e n t i o n , 3 - causes of d e t e n t i o n , k - s h i p p e r s ' a t t i t u d e towards demurrage changes, 5 - i n c e n t i v e s , 6 - s h i p p e r s ' p e r c e p t i o n of the car s h o r t a g e , 7 - changes recommended by s h i p p e r s t o improve c a r u t i l i z a t i o n , 8 - s i g n i f i c a n t d i f f e r e n c e s between s h i p p e r s ' and r e c e i v e r s ' p o i n t o f v iew. 1 - S h i p p e r sample d i s t r i b u t i o n The d i s t r i b u t i o n o f answers per type o f p r o d u c t s h i p p e d i s shown i n t a b l e 2D and the d i s t r i b u t i o n per c a r r i e r used i n t a b l e 21. In the case of c a r r i e r used, the CNR i s u n d e r r e p r e s e n t e d ; u n f o r t u n a t e l y many o f the Ik unanswered q u e s t i o n n a i r e s were from CNR customers. However the o r i g i n a l s i z e of the sample was very l a r g e ; the q u e s t i o n -59 . Distribution of answers per type of forest product shipped Woodpulp 9 Lumber 58 Plywood 14 Paper products k Miscellaneous 1 Total 86 Table 21. Distribution of car loaded (monthly) per c a r r i C.IM.R. C P . R a i l B.C. Railways B.C. Hydro Northern Alberta Railway Burlington Northern Miscellaneous 657 3676 1351 438 359 109 469 Average number of cars loaded by 86 companies in 1973 7D59 60 n a i r e uas m a i l e d to s h i p p e r s r e p r e s e n t i n g more than h a l f o f f o r e s t p r o d u c t s s h i p p e d every y e a r . The l o u p e r c e n t a g e o f CIMR customers uho r e t u r n e d the q u e s t i o n n a i r e does not have any e f f e c t on most of the survey answers, except perhaps when comparing each r a i l w a y ' s performance. The diagram i n f i g u r e 9 d i s p l a y s the f r e q u e n c y d i s t r i b u t i o n o f the demurrage payments found i n t h i s s u r v e y . I t demonstrates t h a t 65% D f the s h i p p e r s p a i d some demurrage i n 1973 and t h a t 37% were b i l l e d w i t h l e s s than 50 demurrage days ( 9 3 % of those days were at $10 e a c h ) . 2 - Economics of d e t e n t i o n The f a c t o r h a v i n g the g r e a t e s t impact on the d e c i s i o n to h o l d the car beyond f r e e time i s the D u t - o f - p o c k e t c o s t s u s t a i n e d by the f a c i l i t y . Thus h o l d i n g d e c i s i o n s are g e n e r a l l y - made on the comparison between demurrage c o s t f o r the d e t a i n e d c a r s and the c o s t t o l o a d . The m a j o r i t y D f s h i p p e r s s u r v e y e d i n d i c a t e d an u n w i l l i n g n e s s t o work at o v e r t i m e or premium r a t e s t o reduce d e t e n t i o n . The reason f o r t h i s i s easy t o u n d e r s t a n d . Most l o a d i n g crews work on a'scheduled b a s i s , n o r m a l l y kO hours i n a 5 day week,and i t i s v e r y e x p e n s i v e t o c a l l i n workers f o r an o v e r t i m e s i t u a t i o n . The c o s t i s a v o i d e d by d e t a i n i n g the c a r i n t o the f o l l o w i n g day's work. As e x p e c t e d , s h i p p e r s w i t h more r a i l volume and more f r e q u e n t s w i t c h s e r v i c e tend to have o v e r a l l l e s s c a r d e t e n t i o n . L a r g e r s h i p p e r s have b e t t e r l o a d i n g f a c i l i t i e s ; they r e c e i v e a b e t t e r s e r v i c e from the c a r r i e r . T h i s g i v e s management b e t t e r g u i d e l i n e s f o r s c h e d u l i n g and a s s i g n i n g t h e i r work f o r c e s f o r p r o d u c t i o n and l o a d i n g . T h e r e f o r e l a r g e s h i p p e r s pay l e s s demurrage r e l a t i v e t o the number of c a r s they l o a d . F i g u r e 9 Frequency 25 2D 20 1 ID 15 ID Frequency d i s t r i b u t i o n of demurrage days p a i d by the 86 companies surveyed - 1973 1 1 1 1 days 2D 40 60 80 100 120 140 160 180 200 220 240 260 ( + ) 62 3 - Causes o f d e t e n t i o n The reasons f o r d e t a i n i n g c a r s over 2k hours are summarized i n t h i s s e c t i o n i n o r d e r o f response f r e q u e n c y . a) U n c e r t a i n t y o f car s u p p l y (35%) There are tuo f a c t o r s of u n c e r t a i n t i e s : number of c a r s de-l i v e r e d and time o f d e l i v e r y . I t i s d i f f i c u l t to determine uhat percentage o f c a r s o r d e r e d are d e l i v e r e d , e s p e c i a l l y s i n c e s h i p p e r s tend t o o r d e r more c a r s than needed hoping t o reduce equipment s h o r t a g e . Tuo of the companies s u r v e y e d had conducted s t u d i e s t o e v a l u a t e the r e l i a b i l i t y o f car s u p p l y i n 1973 ( p r i o r t o the summer s t r i k e ) . They found t h a t 93% o f the 14,DDD c a r s o r d e r e d uere s u p p l i e d . A f t e r the s t r i k e c a r s h o r t a g e s became uorse and u o r s e . R a i l u a y customers uere a l s o asked t o e v a l u a t e each r a i l u a y ' s performance p r i o r to the 1973 s t r i k e . The ansuers shou t h a t 5 1 % o f C. P. R a i l customers r e c e i v e d c a r s as expe c t e d (both i n number and time o f d e l i v e r y ) as compared u i t h 42% f o r C.IM.R. and 19% f o r B. C. R a i l u a y s . Poor performance from the c a r r i e r s d i s r u p t s p r o d u c t i o n and thus p l a n n i n g to l o a d c a r s u i t h i n 2k hours becomes e x t r e m e l y d i f f i c u l t . b) D i f f i c u l t y i n s c h e d u l i n g o f l o a d i n g c r e u s (13%) T h i s r e s u l t s d i r e c t l y from the u n c e r t a i n t y o f car s u p p l y . About 7C% o f the s h i p p e r s s u r v e y e d had f u l l time l o a d i n g c r e u s t h a t handled r a i l c a r s o n l y . The r e s t had c r e u s u c r k i n g e i t h e r on l o a d i n g or at the m i l l . In both cases u n c e r t a i n t y i n number of c a r s d e l i v e r e d and time of d e l i v e r y makes i t very d i f f i c u l t t o o r g a n i z e the l a b o r f o r c e . D f t e n t h i s p l a n n i n g i s done a f t e r the car has been d e l i v e r e d . As a r e s u l t the c a r u i l l s t a y empty f o r - s e v e r a l hours a f t e r d e l i v e r y . 63 c) P r o d u c t i o n problems (13%) I n d u s t r i e s t r y t o e l i m i n a t e r e h a n d l i n g and i n v e n t o r y as much as p o s s i b l e . As a r e s u l t , sloudoun or down time means t h a t no m a t e r i a l i s a v a i l a b l e f o r l o a d i n g of outbound c a r s and c a r s o c c a s -i o n a l l y s t a y empty u n t i l p r o d u c t i o n s t a r t s a g a i n . d) Slow l o a d i n g (13%) Many box c a r s are s t i l l l o a d e d by hand s i n c e the w i d t h of the door does not..allow the use o f m e c h a n i c a l l o a d i n g equipment. Sometimes t h i s equipment i s not p r e s e n t anyway. Some m i l l s f i n d t h a t the s m a l l volume they handle does not j u s t i f y the purchase of s o p h i s -t i c a t e d l o a d i n g equipment. e) Lack o f d a i l y ' s w i t c h s e r v i c e (11%) In t h i s c ase, f r e e time r e d u c t i o n , to be e f f e c t i v e , would have to be accompanied by b e t t e r s w i t c h s e r v i c e , at l e a s t 5 days a week, Monday through F r i d a y . f ) M i s c e l l a n e o u s (15%) Causes of d e t e n t i o n 'less o f t e n mentioned were the f o l l o w i n g : c a r s w i t h mixed shipments cannot be l o a d e d i n l e s s than 2k hours (meaning i n f a c t one 8-hour s h i f t d a y ) ; s w i t c h i n g i s done d u r i n g w orking hours and d i s t u r b s l o a d i n g ; bad weather; s t r i k e s , e t c . k - S h i p p e r a t t i t u d e s toward demurrage changes I t i s a human t r a i t t o be opposed to change, p a r t i c u l a r l y i f . one i s not aware o f the t r u e n a t u r e of the change and i t s e f f e c t s . T h i s t r a i t tends to produce a b i a s . S i m i l a r l y . i t i s d i f f i c u l t t o p r o j e c t what one would do i n the case of any event t h a t has not yet been e x p e r i e n c e d . Three p o s s i b l e changes were s u g g e s t e d i n , t h e q u e s t i o n n a i r e : .. 64 a) 24 hours f r e e t i m e , $10.•• per day f o r f i r s t f o u r days and $20.00 per day t h e r e a f t e r , b) 24 hours f r e e t i m e , $20.00 per day f o r f i r s t f o u r days and $40.00 per day t h e r e a f t e r , c) 24 hours f r e e t i m e , $30.00 per day f o r every day t h e r e a f t e r . The answers are summarized i n the f o l l o u i n g t a b l e . T a ble 22. S h i p p e r response on changed f r e e time r a t e s (no s e r v i c e change) Percentage o f c a r s l o a d e d i n l e s s than 24 h r s . betueen 24 h r s . Over 48 h r s . and 48 h r s . 1973 67.13 27.75 5.12 - (a) 68.23 29.15 2..62 (b) . 68.88 28.56 2.62 (c ) 69.27 28.13 2.6 An i n t e r e s t i n g c o n c l u s i o n u h i c h can be draun from the resp o n s e s i s the s m a l l change t h a t u o u l d t a k e p l a c e under neu r u l e s . S h i p p e r s l o a d t h e i r c a r s as q u i c k l y as p o s s i b l e and h i g h e r demurrage r a t e s u o u l d make very l i t t l e d i f f e r e n c e i n most o f the c a s e s , e x c e p t perhaps i n d i m i n i s h i n g the use o f r a i l by s h i p p e r s o f f o r e s t p r o d u c t s . Betueen 13% and .18% o f the s h i p p e r s s u r v e y e d s a i d t h a t they u o u l d make l e s s use o f r a i l i f f r e e time f o r l o a d i n g uas reduced t o 24 hour's. 5 -' I n c e n t i v e s S h i p p e r s uere asked i f they u o u l d accept an arrangement whereby they u o u l d agree t o a maximum 24-hour f r e e l o a d i n g t i m e . 48% u o u l d agree to 24-hour f r e e time i f the r a i l u a y s c o u l d guarantee the number-of c a r s d e l i v e r e d and a d e l i v e r y time b e f o r e 7:00 A.M. 25% c l a i m e d t h a t under no c i r c u m s t a n c e they u o u l d agree t o 24-hour f r e e time as they argue i t i s i m p o s s i b l e t o l o a d t h e i r c a r s d u r i n g an 8-hour work day. 27% d i d not answer t h a t q u e s t i o n . 6 - S h i p p e r s ' p e r c e p t i o n of the car s h o r t a g e S h i p p e r s were asked what they p e r c e i v e d as b e i n g the main re a s o n s f o r the c a r s h o r t a g e i n Canada and t h e i r answers are l i s t e d below i n - o r d e r o f i m p o r t a n c e . a) r a i l w a y i n e f f i c i e n c y (poor t u r n a r o u n d - i n e f f i c i e n t . interchange and y a r d o p e r a t i o n s - poor c o o r d i n a t i o n between r a i l r o a d s ) , b) l a c k of r a i l w a y equipment i n s e r v i c e c ) cars, damaged not b e i n g r e p a i r e d d) poor s i t u a t i o n o f U. S. r a i l r o a d s . e) h i g h e r demand o f f o r e s t prarducts than e x p e c t e d f ) i n s u f f i c i e n t i n c e n t i v e f o r p r i v a t e l y l e a s e d c a r s g) lumber c a r s b e i n g used f o r o t h e r commodities f ) r a i l r o a d s t r i k e s g) c a r s t i e d up at s e a p o r t s . 7 - Changes recommended by s h i p p e r s t o improve c a r u t i l i z a t i o n I t was not p o s s i b l e t o rank answers to t h i s q u e s t i o n a c c o r d i n g t o w e l l d e f i n e d c r i t e r i a , and some of the recommendations most o f t e n p r o v i d e d are l i s t e d below. a) Reducing f r e e time would not improve c a r u t i l i z a t i o n a g r e a t d e a l s i n c e m i l l s a l r e a d y r e t u r n t h e i r c a r s l o a d e d as f a s t as p a s s i b l e . I t would be mare e f f i c i e n t f o r the r a i l r o a d s to reduce t e r m i n a l d e l a y s at. o r i g i n , d e s t i n a t i o n a n d . i n t e r c h a n g e p o i n t s . b) The 48 hour f r e e time s h o u l d be r e t a i n e d but the p e n a l t y f o r the f i r s t c h a r g e a b l e day s h o u l d be g r e a t e r than the o v e r t i m e d i f f e r e n t i a l p l u s o t h e r c o s t s which may be n e c e s s a r y to make up f o r i n e f f i c i e n c i e s which would r e q u i r e a t h i r d day. 66 c ) Delays are o f t e n due to breakdown of r a i l equipment and r a i l r o a d s h o u l d improve maintenance. e) R a i l r o a d s s h o u l d be p e n a l i z e d f o r d e l i v e r i n g c a r s l a t e i n a s i m i l a r manner as the s h i p p e r s who r e t u r n t h e i r c a r s a f t e r 48 h o u r s . 8 - S i g n i f i c a n t d i f f e r e n c e s between s h i p p e r s and r e c e i v e r s p o i n t  of view D e t a i l e d r e s u l t s from the r e c e i v e r s survey are r e p r o d u c e d i n appendix V I . In most cases the p a t t e r n o f answers i s s i m i l a r t o the one o b t a i n e d i n the s h i p p e r s * s u r v e y . There i s a very i m p o r t a n t d i f f e r e n c e however: r e c e i v e r s are more s t r o n g l y apposed t o a r e d u c t i o n of f r e e t i m e . The companies s u r v e y e d r e c e i v e d between 4 and 5 c a r s a month ( a v e r a g e ) and do nat have s p e c i a l i z e d crews working on un-l o a d i n g o p e r a t i o n s . Employees are w o r k i n g both on u n l o a d i n g c a r s and i n the lumber y a r d s e r v i n g customers and they cannot u n l o a d a c a r ( e s p e c i a l l y a box c a r ) w i t h i n an 8 hour day s h i f t . The companies s u r -veyed f e e l they would make l e s s use o f r a i l i n 47% o f the c a s e s , but r e c o g n i z e t h a t r e d u c t i o n i n use o f r a i l i s v e ry d i f f i c u l t t o a c h i e v e . CHAPTER UI SUMMARY AND CONCLUSIONS There i s a g r e a t concern u i t h r a i l car u t i l i z a t i o n by r a i l -r o a d s , the s h i p p i n g p u b l i c and government a g e n c i e s . R e c e n t l y g r e a t e r emphasis has been p l a c e d on r a i l c a r u t i l i z a t i o n , and some p r o g r e s s has been a c c o m p l i s h e d . On J u l y 11, 1973 the tuo major r a i l r o a d s proposed a r e d u c t i o n i n f r e e time to l o a d c a r s , to improve c a r u t i l -i z a t i o n . However they .uere not a b l e t o s u s t a i n t h i s argument and they u i t h d r e u t h e i r p r o p o s a l b e f o r e the p u b l i c h e a r i n g s c h e d u l e d to tak e p l a c e b e f o r e the Canadian T r a n s p o r t Commission s t a r t e d . A f t e r t h i s u n s u c c e s s f u l attempt t o reduce f r e e t i m e , both r a i l u a y s and customers agreed to r e v i e u the uhole demurrage problem. One o b j e c t i v e o f t h i s s tudy uas t o develop a methodology u h i c h c o u l d be used to approach the problem o f demurrage and r a i l c a r u t i l i z a t i o n . A f t e r c o l l e c t i n g i n f o r m a t i o n from r a i l u a y s 1 customers ( t h r o u g h q u e s t i o n -n a i r e s and i n t e r v i e u s ) .and from r a i l r o a d s r e g a r d i n g the l o a d t o l o a d c y c l e o f t h e i r c a r s ( s t u d y i n g a v a i l a b l e c a r r u n n i n g r e c o r d s ) t h i s c h a p t e r w i l l t r y t o determine to what e x t e n t f r e e time r e d u c t i o n would a f f e c t c a r u t i l i z a t i o n i n the f o r e s t i n d u s t r y . 67 68 1 - MEASUREMENT DF IMPACTS OF DEMURRAGE CHANGES ON RAIL CAR UTILIZATION Impact o f demurrage changes can be measured i n at l e a s t two ways. One i s to assume t h a t a l l c a r time s a v i n g s can be t u r n e d i n t o reduced f l e e t r e q u i r e m e n t s and t o p r o j e c t c a p i t a l s a v i n g s . T h i s method r e q u i r e s a p r o j e c t i o n o f the s i z e o f the f l e e t u i t h and u i t h o u t changes i n demurrage. S i n c e no l o n g term e s t i m a t e s o f c a r r e q u i r e m e n t s c o u l d be o b t a i n e d from the r a i l w a y s , t h i s method had t o be abandoned. The o t h e r uay of measuring the impact o f f r e e time r e d u c t i o n i s to assume t h a t some of the c a r time s a v i n g s can be t u r n e d i n t o neu revenue l o a d s . T h i s second method uas chosen i n t h i s s tudy a l t h o u g h i t i s d i f f i c u l t to know to what e x t e n t i n c r e a s e d a v a i l a b i l i t y o f equipment u i l l r e s u l t i n b e t t e r u t i l i z a t i o n . R e d u c t i o n o f f r e e time means some time s a v i n g s i n the l o a d t o l o a d c y c l e and i n c r e a s e s c a r a v a i l a b i l i t y . S i n c e i t i s not p o s s i b l e t o measure u i t h c e r t a i n t y uhat the time s a v i n g s might be i f f r e e time uas r e d u c e d , the study t r i e d t o determine an upper and l o u e r l i m i t . Maximum time s a v i n g s u o u l d be o b t a i n e d i f a l l customers r e l e a s e d at l e a s t 95% of t h e i r c a r s u i t h i n the f r e e time a l l o u a n c e as they do nou. T h i s i s the upper l i m i t s i n c e i t i s very u n l i k e l y t h a t o n l y 5% of the c a r s u o u l d be charged u i t h demurrage i f f r e e time uas reduced to 2k h o u r s . Minimum time s a v i n g s u o u l d be o b t a i n e d i f changes i n l o a d i n g time uere t a k i n g p l a c e as suggested by the customer response on changing f r e e time i n the q u e s t i o n n a i r e . T h i s i s the l o u e r l i m i t , the one upon u h i c h customers agree. S i n c e ' i t i s a human t r a i t to be opposed to change, t h i s t r a i t tends to produce a b i a s and i t i s r e a s o n a b l e t o assume t h a t the percentage o f c a r s l o a d e d i n l e s s than 2k hours u o u l d be g r e a t e r than the percentage o b t a i n e d from the q u e s t i o n n a i r e . 69 The o n l y impacts measured i n t h i s study uere u i t h r e g a r d to b e n e f i t s from r e d u c t i o n i n l o a d to l o a d c y c l e . I t s h o u l d be remembered t h a t a l t h o u g h f r e e time r e d u c t i o n might c o n f e r a b e n e f i t by i m p r o v i n g c a r t u r n a r o u n d , t h e r e are c o s t s a s s o c i a t e d u i t h i t both f o r the r a i l r o a d s ( c o s t o f i n c r e a s e d s u i t c h i n g s e r v i c e t o take the maximum advantage of e x t r a c a r a v a i l a b i l i t y ) and f o r the F o r e s t I n d u s t r y ( l a b o u r c o s t s o f e x t r a l o a d i n g c r e u s , i n c r e a s e d demurrage payments). Houever the o b j e c t i v e of t h i s study uas o n l y to determine t o uhat e x t e n t f r e e time r e d u c t i o n f o r l o a d i n g and u n l o a d i n g r a i l c a r s u o u l d a f f e c t c a r u t i l i z a t i o n . 2 - RESULTS Canadian t e r m i n a t e d t r a f f i c i s s e p a r a t e d from the U. S. term-i n a t e d one and f o r each type o f t r a f f i c , minimum,-and maximum s a v i n g s are c a l c u l a t e d . a) Neu c y c l e : l o u e r l i m i t A l l the r e c e i v e r s o f f o r e s t p r o d u c t s s u r v e y e d i n d i c a t e d t h a t they c o u l d not reduce t h e i r u n l o a d i n g time to Zh h o u r s . T h e r e f o r e the minimum r e d u c t i o n o f the neu c y c l e u i l l be the same f o r both t y p e s of t r a f f i c s i n c e o n l y s h i p p e r s i n d i c a t e d a p o t e n t i a l r e d u c t i o n i n t h e i r l o a d i n g t i m e . Houever most l i k e l y r e c e i v e r s u o u l d reduce t h e i r u n l o a d i n g t i m e , even- to a s m a l l e x t e n t and the l o u e r l i m i t c a l c u l a t e d u i l l be too l a u . The r e d u c t i o n i n the c y c l e uas c a l c u l a t e d by d e t e r m i n i n g f o r each company su r v e y e d ( s h i p p e r s ) the s a v i n g s they u o u l d a c h i e v e . The r e s u l t s uere u e i g h t e d p r o p o r t i o n a l l y to the s i z e o f the s h i p p e r s ( i n terms o f car l o a d e d per month) and e x t r a p o l a t e d to a l l s h i p p e r s . I t uas found t h a t the average c y c l e f o r both t y p e s o f t r a f f i c u o u l d be 70 reduced by 0.19 days. b) New c y c l e : upper l i m i t ( i ) Canadian t e r m i n a t e d t r a f f i c : s h i p p e r s The upper l i m i t i s o b t a i n e d by assuming t h a t 95% of the c a r s would be r e l e a s e d w i t h i n 24 hours ( t h e r e are now 95% r e l e a s e d w i t h i n kB h o u r s , and 67% w i t h i n 2k h o u r s ) . T h e r e f o r e i t i s assumed t h a t 28% more c a r s would be r e l e a s e d w i t h i n 2k h o u r s . S i n c e t h e r e was no e v idence t h a t customers were t r y i n g to get t h e i r c a r s on Wednesdays a f t e r 7:00 A.M. (such a c a r does not pay demurrage u n t i l the. f o l l o w i n g Monday 7:00 A.M.), i t was assumed t h a t the p a t t e r n of c a r d e l i v e r y would s t a y the same. In any case s h i p p e r s have very l i t t l e c o n t r o l upon the day o f d e l i v e r y (and r e c e i v e r s even l e s s ) . L e t x = time at o r i g i n f o r c a r s r e l e a s e d w i t h i n 2k hours y = time a t o r i g i n a f o r c a r s r e l e a s e d w i t h i n AS hours z = time at o r i g i n f o r c a r s r e l e a s e d a f t e r k8 hours (1) 0.67x + 0.2By + 0.05z = 2.98 days ( a c t u a l o r i g i n t i m e ) a f t e r improvement, (2) 0.67x +0.28x + 0.05z = A days (new o r i g i n t i m e ) S u b t r a c t i n g (2) from ( 1 ) , we f i n d 0.2S(.y-x) = 2.98 - A But y - x = 1 day ( a v e r a g e ) T h e r e f o r e A = 2.98 - 0.28 = 2.7 days T h i s assumes t h a t the number of c a r s r e l e a s e d a f t e r kB hours would s t a y the same which i s most l i k e l y u n t r u e . The c a l c u l a t i o n i s b i a s e d (trie upper l i m i t s l i g h t l y too h i g h ) . ( i i ) Canadian t e r m i n a t e d t r a f f i c : r e c e i v e r 34% o f the c a r s are now r e l e a s e d w i t h i n 2k h o u r s , 61% w i t h i n 48 hours and 5% a f t e r 48 h o u r s . 71 Let x = time a t d e s t i n a t i o n f o r c a r s r e l e a s e d w i t h i n 24 hours y = time a t d e s t i n a t i o n f o r c a r s r e l e a s e d u i t h i n kB hours z = time a t d e s t i n a t i o n f o r c a r s r e l e a s e d a f t e r kB hours (1) 0.34x + D.61y + 0.05z = B.kk ( a c t u a l d e s t i n a t i o n t i m e ) a f t e r improvement, (2) 0.34x + 0.61x + 0.05z = B (neu d e s t i n a t i o n t i m e ) S u b t r a c t i n g (2) from (1) ue f i n d : • •.61(y-x) = B.kk - B But y - x = 1 day (aver a g e ) T h e r e f o r e B = B.kk - 0.61 = 7.83 days Again the c a l c u l a t i o n has a s m a l l b i a s as p r e v i o u s l y ex-p l a i n e d . The c y c l e o f a Canadian t e r m i n a t e d c a r u o u l d be reduced by (2.98 - 2.7) + (8.44-7.83) = 0.28 + 0 . 6 1 = 0.89 days and the neu c y c l e be 28.51 - 0.89 = 27.62 days. ( i i i ) U. S. t e r m i n a t e d t r a f f i c : s h i p p e r Same r e s u l t s as Canada t e r m i n a t e d t r a f f i c . ( i v ) U. S. t e r m i n a t e d t r a f f i c : r e c e i v e r The s a v i n g s are e q u a l t o zero s i n c e those r e c e i v e r s are o u t -s i d e Canadian j u r i s d i c t i o n . The c y c l e o f a-U. S. t e r m i n a t e d c a r would be reduced by 2.98 - 2.7 = 0.28 days and the neu c y c l e be 43.21 - 0.28 = 42.93 days. The number o f e x t r a c a r l o a d s t h a t might have been made a v a i l a b l e be-tueen January and October 1973 i f f r e e time f o r l o a d i n g and unloa'ding had been reduced t o 24 hours on January 1, 1973, i s o b t a i n e d by u s i n g the f o l l o u i n g f o r m u l a : r 72 # of e x t r a c a r l o a d s (ID months) = (# c a r l o a d s Jan-Oct 1 9 7 3 ) x ( 1 9 7 3 C y c l e - l ) \ neu c y c l e ) The above r e s u l t s are summarized i n t a b l e 23. Table 23. P o t e n t i a l s a v i n g s from a r e d u c t i o n i n f r e e time ( f o r e s t p r o d u c t s t r a f f i c ) 1973 ca r c y c l e Minimum p o t e n t i a l s a v i n g s Maximum p o t e n t i a l s a v i n g s E x t r a IMeu c a r l o a d s c y c l e (Jan-Oct 73) E x t r a IMeu c a r l o a d s c y c l e (Jan-Oct 73) Canadian t r a f f i c 28.51 28.32 1,227 27.62 5,892 Canada-U.S. t r a f f i c 43.21 43.02 1,211 42.93 1,789 T o t a l 2,438 7,681 3 - CONCLUSIONS The r e s u l t s from t a b l e 23 shou t h a t betueen 2500 and 7700 e x t r a c a r l o a d s o f f o r e s t p r o d u c t s might have been c a r r i e d f o r the f i r s t 10 months o f 1973 i f t h e r e had been o n l y 24 hour f r e e time a l l o u a n c e . T h i s p o s s i b i l i t y i s based on tuo assu m p t i o n s . F i r s t , r e -d u c t i o n s i n the amount o f time c a r s are h e l d by r a i l customers u o u l d a l u a y s l e a d to r e d u c t i o n i n the t o t a l c a r c y c l e (houever c a r a v a i l -a b i l i t y i s q u i t e d i f f e r e n t from c a r u t i l i z a t i o n ) . Second, empty c a r s r e l e a s e d u o u l d be used f o r the t r a n s p o r t a t i o n o f f o r e s t p r o d u c t s ( i t i s not knaun uhat percentage o f c a r s a l l o c a t e d to f o r e s t p r o d u c t s are a l s o used f o r o t h e r commodities and t o uhat e x t e n t ; houever t h i s 73 might be compensated by c a r s a l l o c a t e d tD o t h e r commodities and sometimes used f o r f o r e s t p r o d u c t s 1 . The p o t e n t i a l impact of f r e e time r e d u c t i o n i s very s m a l l , betueen 0.5% and 1.68% o f e x t r a c a r l o a d s might have been c a r r i e d , the main reason b e i n g t h a t time spent under customer c o n t r o l i s v e r y s m a l l . The p o t e n t i a l f o r improvements i n c a r r i e r t e r m i n a l t i m e , i n t e r c h a n g e betueen c a r r i e r s seems t o be much g r e a t e r than the b e n e f i t s from r e -d u c i n g f r e e t i m e . In -order t o improve c a r u t i l i z a t i o n , C.N.R. and C. P. R a i l need i n f o r m a t i o n i n a form uhich. does not seem to be a v a i l a b l e nou e i t h e r from M o n t r e a l head o f f i c e s , o r from the r e g i o n a l o f f i c e s . Very s i m p l y , c a r r u n n i n g r e c o r d s c o u l d be kept f o r a l o n g enough p e r i o d and i n f o r m a t i o n r e g a r d i n g each component of a c y c l e (per type of c a r , per commodity c a r r i e d , per r e g i o n , e t c . ) c o u l d be o b t a i n e d by means Df a very s i m p l e computer program. The same i n f o r m -a t i o n c o u l d be o b t a i n e d from B. C. R a i l u a y s . The p r o c e s s u o u l d be more time consuming s i n c e c a r r u n n i n g r e c o r d s are not a v a i l a b l e 'from a computer. Houever, i f p r o v i d e d u i t h c a r numbers ( e a s i l y o b t a i n e d from the c u s t o m e r s ) , the o f f i c e o f the s u p e r i n t e n d e n t Df t r a f f i c u i l l g a t h e r the i n f o r m a t i o n from t h e i r r e c o r d s . B e t t e r knouledge from t h e i r o p e r a t i o n s s h o u l d h o p e f u l l y h e l p the r a i l r o a d s i n d e c i d i n g on areas to be improved f i r s t . R e d u c t i o n of f r e e time i s a s m a l l p a r t of a much l a r g e r problem: changes i n demurrage r u l e s and t h e i r e f f e c t : . o n r a i l c a r u t i l i z a t i o n . A d e t a i l e d study o f t h i s problem s h o u l d r e v i e u the c u r r e n t p r a c t i c e s , observe t h e i r e f f e c t s i n terms o f car u t i l i z a t i o n and compare t h e s e . r e s u l t s u i t h r a i l c a r r i e r and customer c a p a b i l i t i e s and needs. Based upon a q u a n t i f i c a t i o n o f r e l e v a n t f a c t s , the ob-j e c t i v e o f such a study u o u l d be t o recommend a p p r o p r i a t e demurrage r u l e s and c h a r g e s . 75 BIBLIOGRAPHY B. C. Lumberman Magazine, Dec. 1973 i s s u e . B. C. R a i l u a y s Annual Report 1971, 1972. Canadian I n s t i t u t e o f T r a f f i c and T r a n s p o r t a t i o n - C e r t i f i c a t e Course 2nd e d i t i o n , Aug. 1967. Canadian N a t i o n a l R a i l u a y s - Annual Report 1971, 1972. Canadian P a c i f i c R a i l u a y s , - Annual Report 1971, 1972. Canadian S t a t i s t i c a l R e v i e u , January 1974, S t a t i s t i c s Canada, P u b l i c a t i o n #11-003, Volume 46, #1. C o u n c i l o f F o r e s t I n d u s t r i e s o f B r i t i s h Columbia, Annual Report 1972. R a i l u a y T r a n s p o r t P a r t I I : F i n a n c i a l S t a t i s t i c s 1972, S t a t i s t i c s Canada #52-208. R a i l u a y T r a n s p o r t P a r t I I I : Equipment, t r a c k and f u e l s t a t i s t i c s 1972, S t a t i s t i c s Canada #52-209. Reebie A s s o c i a t e s , Touards An E f f e c t i v e Demurrage System, (J. S. Depart-ment o f Commerce, J u l y 1972. T r a f f i c N otes, Issue #4685, Nov. 13, 1973. A P P E N D I X I 76 77 APPENDIX I The f o l l o w i n g i s a l e t t e r s e n t t o Mr. J . C. G a r d i n e r , and Mr. A. F. J o p l i n , V i c e - P r e s i d e n t s o f M a r k e t i n g and S a l e s f o r C.N.R. and C. P. R a i l r e s p e c t i v e l y , by the P r e s i d e n t of the Canadian I n d u s t r i a l T r a f f i c League. T h i s l e t t e r uas re p r o d u c e d i n T r a f f i c  Notes Issue #4669, J u l y 27, 1973. " I r e f e r you t o your j o i n t l e t t e r o f J u l y 11th l a s t as i t concerns the s u b j e c t o f the r e d u c t i o n i n ' f r e e t i m e 1 f o r l o a d i n g , u h i c h i s s c h e d u l e d t o t a k e e f f e c t on August 1 s t n e x t . Lde o f the League are g i v i n g thought t o the f o r m a t i o n o f a " j o i n t i n d u s t r y - r a i l u a y t a s k f o r c e " t o r e v i e u the e n t i r e q u e s t i o n o f demurrage p r i o r to December 3 1 s t , 1973. Lde s h a l l be u r i t i n g to you f u r t h e r as i t concerns t h i s s u b j e c t , at a l a t e r d a t e , so t h a t a meeting can be arranged c o n c e r n i n g same. Houever, gentlemen ue are f a s t a p p r o a c h i n g your proposed e f f e c t i v e date o f August 1, 1973 f o r the r e d u c t i o n o f " f r e e t i m e " f o r l o a d i n g from 4B t o 24 h o u r s . Although ue u n d e r s t a n d t h a t d u r i n g the p a s t 3D days you have been r e v i e w i n g a l l s u b m i s s i o n s from i n d u s t r y con-c e r n i n g t h i s m a t t e r , no meetings betueen y o u r s e l v e s and i n d u s t r y r e p r e s e n t a t i v e s t o r e s o l v e o u t s t a n d i n g d i f f e r e n c e s o f o p i n i o n , have been h e l d , t o our knouledge, u i t h the e x c e p t i o n o f the Canadian F e r t i l i z e r I n s t i t u t e . T h i s , to say the l e a s t i s most d i s a p p o i n t i n g . Lde do f e e l t h a t such a meeting i s v i t a l i f the atmosphere o f t r u s t and c o r d i a l i t y , u h i c h has e x i s t e d i n the p a s t betueen r a i l s e r v i c e s u p p l i e r s and p u r c h a s e r s , i s t o c o n t i n u e i n the f u t u r e . In t h i s r e s p e c t , the r a i l u a y s must ansuer, as a minimum r e j o i n d e r , i n d u s t r y ' s s t a t e m e n t s t h a t the proposed r e d u c t i o n i n " f r e e t i m e " f o r l o a d i n g can not be j u s t i f i e d on the grounds o f need, nor on the grounds o f e f f e c t . P l e a s e a l l o u me t o e l a b o r a t e b r i e f l y on the s e tuo p o i n t s . The Canadian r a i l u a y s j u s t i f y t h e i r proposed r e d u c t i o n i n " f r e e t i m e " f o r l o a d i n g by s t a t i n g t h a t i ) t h e r e i s a severe r a i l c a r s h o r t a g e i n Canada, and i i ) t h a t t h e i r proposed " f r e e t i m e " r e d u c t i o n u i l l a m e l i o r a t e the s i t u a t i o n . I n d u s t r y i n Canada does not t o t a l l y a ccept e i t h e r p r e m i s e . F i r s t , ue f e e l t h a t any apparent r a i l c a r s h o r t a g e t h a t may p r e s e n t l y e x i s t i n Canada, i s temporary i n n a t u r e , and i s the r e s u l t i n p a r t o f the r a i l u a y s f a i l u r e to r e p a t r i a t e the v a s t number of Canadian c a r s u h i c h are p r e s e n t l y b e i n g employed i n the U n i t e d S t a t e s . 78 We b e l i e v e t h a t the Honourable Jean Marchand, F e d e r a l M i n i s t e r D f T r a n s p o r t , c o n c u r s , i n p a r t , u i t h our e v a l u a t i o n of the s i t u a t i o n . In r e s p o n d i n g , on June 8 t h , t o a q u e s t i o n i n the House of Commons r e l a t e d to the apparent box c a r s h o r t a g e i n B r i t i s h Columbia, he r e p l i e d t h a t " d i s c u s s i o n s are b e i n g c a r r i e d out not m a i n l y u i t h the government of B r i t i s h Columbia, but u i t h the Americans. T h i s i s uhere our box c a r s are and the CNR and the CPR are t r y i n g t o get back as many c a r s as they can". Houever, ue of the League, d i f f e r u i t h the o p i n i o n e x p r e s s e d i n the second sentence o f Mr. Marchand's s t a t e m e n t . uJe b e l i e v e t h a t he u o u l d not and i n d e e d c o u l d not have e x p r e s s e d such a v i e u i f he had been auare t h a t on June 4 t h , at the r e q u e s t o f the Canadian r a i l u a y s , the A s s o c i a t i o n of American R a i l r o a d s r e s c i n d e d Car R e l o c a t i o n D i r e c t i v e No. 47. The purpose of D i r e c t i v e No. 47 uas to encourage the prompt r e t u r n of Canadian r a i l c a r s used i n the t r a n s - b o r d e r t r a d e . T h i s a c t i o n by the Canadian r a i l u a y s s u g g e s t s t o us t h a t e i t h e r the r a i l c a r s h o r t a g e i n Canada has been e l i m i n a t e d , or t h a t the Canadian r a i l u a y s are d e l i b e r a t e l y a c t i n g i n an i r r e s p o n s i b l e manner, t o the d e t r i m e n t o f Canadian i n d u s t r y . T h i s s u b j e c t o f Canadian r a i l c a r s i n the U.S.A. uas o u t -l i n e d t o you both i n my l e t t e r o f June 8 t h l a s t and has been com-p l e t e l y i g n o r e d up t o t h i s time by you. S e c o n d l y , the premise t h a t the proposed " f r e e t i m e " r e d u c t i o n u i l l a m e l i o r a t e our p r e s e n t "severe r a i l c a r s h o r t a g e " has been t o t a l l y u n s u b s t a n t i a t e d i n any uay by the r a i l u a y s , except i n t h a t i t i s t h e i r " o p i n i o n " t h a t i t u i l l do s o . We f e e l t h a t t h i s o p i n i o n i s t o t a l l y unfounded, b a s i n g our b e l i e f , i n p a r t , on the r e s u l t s D f a study made by Reebie A s s o c i a t e s f o r the American Department o f T r a n s p o r t a t i o n i n J u l y 1972, e n t i t l e d "Touard An E f f e c t i v e Demurrage  System". Having s t u d i e d the movement of 1200 randomly s e l e c t e d c a r s , the r e p o r t s t a t e d not o n l y the "time s p e c i f i c a t i o n s i n the demurrage t a r i f f . . . h a v e a minimum i n f l u e n c e on r a i l customer a c t i o n s " , but a l s o t h a t "the improvements i n c a r a v a i l a b i l i t y u h i c h c o u l d r e s u l t from r e d u c t i o n s i n c a r r i e r l i n e h a u l and t e r m i n a l time are p r o b a b l y t h r e e or f o u r times g r e a t e r than the b e n e f i t s u h i c h p o t e n t i a l l y c o u l d be a c h i e v e d through changes i n demurrage". In c o n c l u s i o n , i t s h o u l d be o b v i o u s t o you t h a t any i m p l e m e n t a t i o n of your proposed " f r e e t i m e " r e d u c t i o n , p r i o r to s a t i s f a c t o r i l y answering the a f o r e m e n t i o n e d s t a t e m e n t , u o u l d be viewed by i n d u s t r y as u n j u s t , u n i l a t e r a l a c t i o n on your p a r t . T h e r e f o r e , we f e e l t h a t a f u r t h e r d e l a y i n the i m p l e m e n t a t i o n of the proposed " f r e e t i m e " r e d u c t i o n i s a p p r o p r i a t e , i n o r d e r t h a t t h i s s u b j e c t can be f u l l y d i s c u s s e d between y o u r s e l v e s and i n d u s t r y groups." A P P E N D I X I I 79 80 APPENDIX I I The f o l l o w i n g i s a r e p o r t o f the p r o g r e s s o f the R a i l Demurrage Task Force p r i n t e d i n T r a f f i c Notes, I s s u e A9685, November 13, 1973. We (CITL) have j u s t r e c e i v e d a l e t t e r from the CN & CP c o n f i r m i n g t h e i r d e s i r e f o r CITL to c o o r d i n a t e the f o r m a t i o n of an I n d u s t r y S t e e r i n g Committee to c o n s i s t o f those i n d u s t r y a s s o c i a t i o n s who have shown an i n t e r e s t i n the r a i l c a r demurrage q u e s t i o n and r e l a t e d problems. The R a i l w a y s w i l l a l s o form a R a i l w a y S t e e r i n g Committee. The two s t e e r i n g committees w i l l nominate members t o a s m a l l e r - j o i n t I n d u s t r y / R a i l Task Force which w i l l be C h a i r e d by Harvey Levy o f the Canadian Car Demurrage Bureau and who w i l l have an i n d u s t r y r e p r e s e n t a t i v e as a Vi c e - C h a i r m a n . The whale demurrage q u e s t i o n w i l l be r e v i e w e d , the u l t i m a t e g o a l b e i n g improved r a i l c a r u t i l i z a t i o n . The Task Force o f 3 r a i l r e p s . , 3 i n d u s t r y r e p s . , p l u s The Chairman and Vice-Chairman w i l l have the duty t o come up w i t h f i r m p r o p o s a l s as i t concerns the whole q u e s t i o n of demurrage ( l o a d i n g , u n l o a d i n g , e t c . ) a f t e r i t has c o n s i d e r e d a l l problem areas r e l a t e d t o i t from the f i e l d . As t o t i m i n g , you w i l l r e a l i z e t h a t i t w i l l t a ke some time beyond December 3 1 st next to a c c o m p l i s h t h i s t a s k , however, we are l e d to b e l i e v e t h a t the Canadian R a i l w a y s do a p p r e c i a t e t h i s and w i l l not change p r e s e n t r u l e s u n t i l the Task Force has s u b m i t t e d i t s f i n a l r e p o r t . A P P E N D I X I I I 81 APPENDIX I I I The f o l l o w i n g q u e s t i o n n a i r e was sent to members of the Lumber and B u i l d i n g M a t e r i a l s A s s o c i a t i o n of O n t a r i o . A s i m i l a r q u e s t i o n n a i r e was sent t o members o f the C o u n c i l o f F o r e s t I n d u s t r i e s o f B r i t i s h Columbia. The two q u e s t i o n n a i r e s are b a s i c -a l l y the same except f o r some changes i n the wording to make them more a p p r o p r i a t e to the n a t u r e o f the r e c e i v e r ( e i t h e r s h i p p e r or r e c e i v e r o f f o r e s t p r o d u c t s ) . A t t a c h e d to the q u e s t i o n n a i r e was a c o v e r i n g l e t t e r which i s i n c l u d e d a t the end of t h i s a p p endix. 83 Q U E S T I O N N A I R E . REVIS IONS TO CANADIAN CAR DEMURRAGE RULES COMPANY: L O C A T I O N : T Y P E ( S ) OF FOREST PRODUCTS R E C E I V E D : RESPONDENT: PHONE: Bk 1. How many r a i l c a r s were unleaded? (Monthly Average) i n 1972: i n 1973: 2. I s t h e r e a s e a s o n a l r e c e i v i n g p a t t e r n ? Yes No I f yes, how many c a r s were unloaded d u r i n g the peak month? NUMBER MDNTH i n 1972: i n 1973: 3. Firm l o c a t i o n i s l o c a l to what c a r r i e r , and w i t h i n s w i t c h i n g l i m i t s o f what o t h e r c a r r i e r (check D f f one and/or both columns, i f a p p l i c a b l e ) ? wITHIN CARRIER LDCAL TO SWITCHING LIMITS C.N.R. C P . RAIL OTHER(S) (SPECIFY) k. I f you use o n l y one r a i l w a y , do you c o n s i d e r another r a i l w a y as bei n g a f e a s i b l e a l t e r n a t i v e ? Yes No 85 5 ( a ) How o f t e n i s your o p e r a t i o n supposed to r e c e i v e a s w i t c h ? a) D a i l y - 7 days a week b) D a i l y - Monday through S a t u r d a y c) D a i l y - Monday through F r i d a y d) Every tuo days •e) Other ( s p e c i f y ) : 5(b) Hou o f t e n does your o p e r a t i o n r e c e i v e a s w i t c h (based on p a s t e x p e r i e n c e - not what the c a r r i e r i s e x p e c t e d to p e r f o r m ) ? % of Times a) D a i l y - 7 days a week b) D a i l y - Monday through S a t u r d a y c) D a i l y - Monday through F r i d a y d) Every two days e) Other ( s p e c i f y ) : 6. At what time does the s w i t c h u s u a l l y o c c u r ? a) 7 a.m. t o 11 a.m. b) 11 a.m. t o 5 p.m. c) 5 p.m. t o 7 a.m. d) S w i t c h i s on c a l l When? 7. Who u s u a l l y unloads your c a r ? a) Crew wo r k i n g o n l y on u n l o a d i n g o p e r a t i o n s b) Crew working e i t h e r on u n l o a d i n g or i n lumber y a r d 86 8. What percentage D f c a r s are unloaded and ready t D be r e l e a s e d ? a) i n l e s s than 2k hours % b) betueen 2k and kB hours % c) i n more than kB hours % T o t a l 10.0. % 9 ( a ) What are the main reasons to keep c a r s more than 2k hours? a) S w i t c h i n g not a v a i l a b l e d a i l y b) Long u n l o a d i n g p r o c e s s because of e x i s t i n g u n l o a d i n g f a c i l i t i e s c) U n c e r t a i n t y o f c a r s u p p l y d) D i f f i c u l t y i n the s c h e d u l i n g o f u n l o a d i n g crews e) Others ( s p e c i f y ) : 9(b) D e s c r i b e u n l o a d i n g f a c i l i t i e s and type o f u n l o a d i n g at lumber y a r d : I D . How many d e m u r r a g e d a y s u a s y o u r o p e r a t i o n b i l l e d f o r ? 8 7 i n 1 9 7 2 i n 1 9 7 3 1 1 . What p e r c e n t a g e o f t h o s e d a y s w e r e a t $ 1 0 . • • e a c h ? i n 1 9 7 2 i n 1 9 7 3 1 2 . I s d e m u r r a g e a b u d g e t e d i t e m ? Y e s IMo 1 3 ( a ) D u r i n g t h e p e r i o d p r i o r t o t h e 1 9 7 3 n a t i o n a l c a r r i e r s t r i k e , w h a t p e r c e n t a g e o f c a r s o r d e r e d w e r e d e l i v e r e d o n t i m e ? C . N . R . • % C P . R a i l % O t h e r % 1 3 ( b ) H a v e y o u e v e r c o n d u c t e d a s u r v e y t o e v a l u a t e t h e r e l i a b i l i t y o f c a r s u p p l y ? Y e s No I f y e s , w h a t w e r e y o u r f i n d i n g s ? 13(b) C o n t i n u e d -88 14. I f the p r e s e n t f r e e time r u l e and e x i s t i n g demurrage r a t e s ( b a s i c a l l y , 48 hours f r e e t i m e , then. $10.CO per day f o r the f i r s t f o u r days and $20.00 per day t h e r e a f t e r ) uere changed to one of the f o l l o u i n g : a) 24 hours f r e e t i m e , $10.00 per day f o r f i r s t 4 days and $20.00 per day t h e r e a f t e r b) 24 hours f r e e t i m e , $20.00 per day f o r f i r s t 4 days and $40.00 per day t h e r e a f t e r c) 24 hours f r e e t i m e , $30.00 per day f o r every day a f t e r i ) Uhat u n l o a d i n g time u o u l d you expect to a c h i e v e under  one o f the above neu r u l e s ? % UNLOADED IN LESS % UNLOADED BETUEEN % UNLOADED IN V K THAN 24 HOURS 24 AND 48 HOURS MORE THAN 68 HOURS TOTAL a) 100% b) 100% c) - 100% i i ) Would the change i n r u l e s a f f e c t the amount o f r a i l  t r a f f i c d e l i v e r e d t o your f i r m ? LESS USE OF RAIL SAME a) b) c) 15. 89 What would you c o n s i d e r to be an a c c e p t a b l e o p e r a t i n g a r r a n g e -ment, whereby you c o u l d agree t o a maximum 24-hour f r e e u n l o a d i n g t i m e ? 16. What do you c o n s i d e r to be the main re a s o n s f o r the p r e s e n t c a r s h o r t a g e ? D -2) 3) 17. What changes do you recommend t o the p r e s e n t demurrage t a r i f f , t h a t you f e e l w i l l r e s u l t i n improved r a i l equipment u t i l i z a t i o n ? 90 January 16, 1974 Dear Mr. As you know the C.IM.R. and C P . R a i l , i n c o n j u n c t i o n u i t h a Canada-wide i n d u s t r y t a s k f o r c e , have formed a Committee t o e v a l u a t e the p r e s e n t demurrage t a r i f f , and to recommend changes to t h i s t a r i f f t h a t u i l l r e s u l t i n improved c a r u t i l i z a t i o n . In p r e p a r a t i o n f o r t h i s r a t h e r i n t e n s i v e r e v i e w of the demur-rage t a r i f f , the C o u n c i l o f F o r e s t I n d u s t r i e s i n Vancouver, and m y s e l f have p r e p a r e d a q u e s t i o n n a i r e . T h i s w i l l p r o v i d e the g u i d e -l i n e s and answers t h a t are needed t o i d e n t i f y a r e a s f o r change, what can or cannot be done, and the p o t e n t i a l b e n e f i t s and c o s t s t h a t can o c c u r w i t h c e r t a i n changes. The s u r v e y w i l l be a p a r t of my graduate t h e s i s . To determine the f u l l impact o f changes i n demurrage on r a i l c a r u t i l i z a t i o n , i t i s a b s o l u t e l y n e c e s s a r y t o a n a l y z e the s i t u a t i o n o f r e c e i v e r s of f o r e s t p r o d u c t s . On the recommendation o f the C o u n c i l of F o r e s t I n d u s t r i e s , I c o n t a c t e d the Lumber and B u i l d i n g M a t e r i a l A s s o c i a t i o n of O n t a r i o and Mr. Tucker, i t s S u p e r v i s o r o f A d m i n i s t r a t i o n and Member S e r v i c e s , p r o v i d e d me w i t h a l i s t o f t h i r t y members r e p r e s e n t a t i n g a f a i r c r o s s s e c t i o n of the A s s o c i a t i o n . I e a r n e s t l y s o l i c i t your a s s i s t a n c e , f o r w i t h o u t i t I cannot complete the s t u d y . T h i s s t u d y s h o u l d p r o v i d e a good b a s i s f o r s h i p p e r s and r e c e i v e r s of f o r e s t p r o d u c t s to d i s c u s s changes i n demurrage w i t h the r a i l w a y s . I would be very g r a t e f u l i f you c o u l d complete the a t t a c h e d q u e s t i o n n a i r e and r e t u r n i t t o me no l a t e r than February 22, 1974. The i n f o r m a t i o n t h a t I r e c e i v e w i l l be kept i n the s t r i c t e s t o f c o n f i d e n c e , and w i l l be combined w i t h t h a t r e c e i v e d from a l l o t h e r r e s p o n d e n t s , so t h a t the i n d i v i d u a l company i n f o r m a t i o n w i l l not be d i v u l g e d . I would l i k e to thank you very much f o r your time and t r o u b l e t o answer t h i s q u e s t i o n n a i r e . I hope t o hear from you soon. Yours very t r u l y , J . P. G a b i l l e Graduate Student T r a n s p o r t a t i o n D i v i s i o n F a c u l t y of Commerce and B u s i n e s s A d m i n i s t r a t i o n APPENDIX IU \ 91 APPENDIX IV BRITISH COLUMBIA FORECAST SHIPMENT OF FOREST PRODUCTS ESTIMATED PLYWOOD SHIPMENTS TO POINTS  IN CANADA  1974 ( M i l l i o n Square F e e t , 3/8" B a s i s ) D e s t i n a t i o n B r i t i s h Columbia A l b e r t a Saskatchewan Manitoba O n t a r i o Quebec M a r i t i m e s TOTAL CANADA Volume 475 230 105 105 620 415 125 2,075 Source: T r a n s p o r t a t i o n Department, COFI, October, 1973. 93 ESTIMATED WOOD PULP SHIPMENTS TP  CANADA AND THE UNITED STATES  1974 (Thousand A i r Dry Tans) D e s t i n a t i o n Volume Canada U n i t e d S t a t e s N o r t h e a s t N o r t h C e n t r a l South A t l a n t i c South West T o t a l U n i t e d S t a t e s R a i l 120 240 410 95 65 240 1,050 Cargo SO 170 250 T o t a l Canada and U n i t e d S t a t e s 1,170 250 Source: T r a n s p o r t a t i o n Department, C o u n c i l o f F o r e s t I n d u s t r i e s o f B.C. October, 1973. ESTIMATED NEWSPRINT SHIPMENTS TP  CANADA AND THE UNITED STATES 1974 D e s t i n a t i o n Volume Canada 135 U n i t e d S t a t e s N o r t h e a s t 10 Nor t h C e n t r a l 10 South A t l a n t i c 5 South IP West 1,280* T o t a l U n i t e d S t a t e s 1,315 T o t a l Canada and U n i t e d S t a t e s 1,450 * A p p r o x i m a t e l y 800,000 Tons by Water. A l l o t h e r volumes by r a i l . S o urce: T r a n s p o r t a t i o n Department, C o u n c i l o f F o r e s t I n d u s t r i e s o f B.C. October, 1973. ESTIMATED SHIPMENTS OF LUMBER TJD  CANADA AND UNITED STATES  1974 ( M i l l i o n Board F e e t ) Canada B.C., Yukon, Northwest T e r r i t o r i e s 93 P r a i r i e s 390 • n t a r i o 325 Quebec 102 M a r i t i m e s 20 T o t a l Canada 930* U n i t e d S t a t e s R a i l Cargo T o t a l N o r t h e a s t 530 1,080 1,610 North C e n t r a l 2,740 - 2,740 South A t l a n t i c 380 840 1,220 South 670 - 670 Uest 480 80 560 T o t a l U n i t e d S t a t e s 4,800 2,000 6,800 T o t a l Canada and U n i t e d S t a t e s 5,730 2,000 7,730 * R a i l ( B a l a n c e o f One B i l l i o n FBM by T r u c k ) Source: T r a n s p o r t a t i o n Department, C0FI, October, 1973. A P P E N D I X V 96 9.7 APPENDIX RESULTS FROM THE SHIPPERS SURVEY C?86 REPLIES) 1. T o t a l number o f c a r s l e a d e d (monthly average) 1972 - 7373 1973 - 7059 2. S e a s o n a l s h i p p i n g p a t t e r n Yes - 21 No - 61 No Answer - 4 T o t a l 86 3. T o t a l number o f c a r s loaded (monthly average) per c a r r i e r i n 1973 C.N.R. 657 C P . R a i l 3676 B.C. R a i l w a y s 1351 B.C. Hydro 438 No r t h e r n A l b e r t a R a i l w a y 359 B u r l i n g t o n N o r t h e r n 109 M i s c e l l a n e o u s 469 T o t a l 7059 4. E x i s t e n c e o f an a l t e r n a t i v e to c a r r i e r ( s ) p r e s e n t l y used Yes 30 No - 52 No Answer - 4 T o t a l 86 5.a) S w i t c h s e r v i c e (as i t i s supposed t o be) No. o f answers a. d a i l y - 7 days a week 8 b. d a i l y - Monday thr o u g h Saturday 15 c. d a i l y - Monday through F r i d a y 35 d. every two days 5 e. o t h e r 22 No answer 1 T o t a l 86 98 5. b) Percentage of time where a s w i t c h i s performed as i t i s supposed t o be. No. o f answers 50 - 60% 1 60 - 70% 1 70 - 80% 1 BO - 30% 2 30 - 100% 62 No answer 33 T o t a l 86 6. Time at which a s w i t c h u s u a l l y o c c u r s No. of answers 7 a.m. - 11 a.m. 12 11 a.m. - 5 p.m. 3D 5 p.m. - 7 a.m. 31 S w i t c h on c a l l ID No answer 3 T o t a l 86 7. Loading of c a r s No. of answers a. Crew wo r k i n g o n l y on l o a d i n g o p e r a t i o n s 6D b. Crew working e i t h e r on l o a d i n g or i n m i l l 19 c. Other 7 T o t a l 86 8. Loading time Average percentage of c a r s l o a d e d and ready t o be r e l e a s e d -a. i n l e s s than 24 hours 67.3% b. between 24 and 48 hours 27.75% c. i n more than 48 hours 4.12% 1DD % 9. Main reasons t o keep c a r s more than 24 hours No. o f times mentioned a. s w i t c h i n g not a v a i l a b l e d a i l y 15 b. l o n g l o a d i n g p r o c e s s because of e x i s t i n g f a c i l i t i e s 10 c. u n c e r t a i n t y o f c a r s u p p l y 52 d. d i f f i c u l t y i n the s c h e d u l i n g o f l o a d i n g c r e u s 17 e. 1) s w i t c h i n g done d u r i n g l o a d i n g 2) i m p o s s i b l e to l o a d c a r w i t h mix 2 shipment i n 8 hours 8 3) breakdown of machinery 18 4) weather 3 10-11. T o t a l demurrage days T o t a l At $10 1973 2635 $2,440 12. Demurrage as a budgeted i t e m Yes 10 No 70 No answer 6 T o t a l ~86~" 13. C a r r i e r s performance 20- 30- 40- 50- 60- •70.- 80- 90- T o t a l 30% 40% 50% 60% 70% 80% 90% 100% C.N.R. 10.52 15.79 15.79 15.79 42.11 100% C P . R a i l 9.76 9.76 17.07 17.07 51.22 100% B . C R a i l w a y s 9.09 9.09 18.18 9.09 9.09 18.18 9.09 18.18 100% B.C.Hydro 12.5 25 25 37.5 100% Key: ex. 1: 10.52% of CNR customers r e c e i v e d c a r s .as o r d e r e d between 50 and 60% of the time i n 1973 ex. 2: 42.11% of CNR customers r e c e i v e d c a r s as o r d e r e d between 90 and 100% of the time i n 1973. 1QQ 14. S h i p p e r a t t i t u d e s t o u a r d s demurrage changes, ( i ) 3 p r o p o s a l s a) 2k hours f r e e t i m e , $10.DD per day f o r f i r s t f o u r days and $20.00 per day t h e r e a f t e r b) 2k hours f r e e t i m e , $20.00 per day f o r f i r s t f o u r days and $40.00 per day t h e r e a f t e r c) 2k hours f r e e t i m e , $30.00 per day f o r every day a f t e r i f a) i f b) i f c) Percentage o f c a r s l o a d e d i n l e s s than 2k hours betueen 2k and 48 hours i f a) i f "b) i f c) 68.23% 68.88% 69.27% ( i i ) changes i n use of r a i l 29.15% 28.56% 28.13% Less use o f r a i l 12.98% 18.7% 18.7 % i n more than 48 hours 2.62% 2.62% 2.60% same 76.62% 70.67% 70.67% 15. A c c e p t a b l e o p e r a t i n g arrangement uhere a s h i p p e r u o u l d agree to a maximum 24 hour f r e e l o a d i n g time No. of t i m e s mentioned N o t h i n g a c c e p t a b l e Guarantee s e r v i c e D a i l y s u i t c h i n g B e f o r e 7 a.m. s u i t c h Spot c a r s as r e q u e s t e d Keep ueek as f r e e time 17 32 9 5 4 1 Main reasons f o r the caE"shortage IMo. o f tim e s mentioned R a i l u a y s i n e f f i c i e n c y kk Lack o f equipment 29 Cars not b e i n g r e p a i r e d 17 Poor s i t u a t i o n o f r a i l r o a d s i n U.S. In-High e r than e x p e c t e d demand f o r lumber In-I n s u f f i c i e n t i n c e n t i v e s f o r p r i v a t e l y l e a s e d c a r s G Lumber c a r s b e i n g used f o r o t h e r commodities k S t r i k e s 2 C.N.R. not c l e a r i n g c a r s t o N.A.R. i n Edmonton 2 Cars h e l d i n t r a n s i t 1 Cars t i e d up at s e a p o r t s 1 C P . R a i l c a r s u a i t i n g i n C a l g a r y t o be u e i g h t e d over a ueek 2 A P P E N D I X V I 10 3 APPENDIX UI RESULTS FROM THE RECEIVERS SURVEY (15 REPLIES) T o t a l number o f c a r s unloaded (monthly average) 1972 - 58 1973 - 70 S e a s o n a l r e c e i v i n g p a t t e r n Yes 5 No 9 No answer 1 T o t a l 15 T o t a l number o f c a r s unloaded (monthly average) per c a r r i e r i n 1973 C.N.R. 5k C P . R a i l 15 M i s c e l l a n e o u s 1 T o t a l 70 E x i s t e n c e of an a l t e r n a t i v e t o c a r r i e r ( s ) p r e s e n t l y used Yes 9 No 5 No answer 1 T o t a l 15 S w i t c h s e r v i c e (as i t i s supposed t o be) No. o f answers a. d a i l y - 7 days a week 0 b. d a i l y - Monday through Saturday 1 c. d a i l y - Monday through F r i d a y 8 d. every two days 0 e. o t h e r " 2 No answer k T o t a l 15 Percentage o f time where a s w i t c h i s performed as i t i s supposed to be 70 - 80% 1 80 - 90% 1 90 - 100% 9 No answer k T o t a l 15 10% 6. Time at u h i c h a s u i t c h u s u a l l y o c c u r s 7 a.m. - 11 a.m. 5 11 a.m. - 5 p.m. 5 5 p.m. - 7 a.m. . D U n p r e d i c t a b l e 2 No ansuer 3 T o t a l 15 7. U n l o a d i n g of c a r s No. of ansuers a) c r e u u o r k i n g o n l y on u n l o a d i n g o p e r a t i o n s 0 b) c r e u u o r k i n g e i t h e r on u n l o a d i n g or i n lumber y a r d 11 c) o t h e r s ( c o n t r a c t e d u n l o a d i n g ) k T o t a l 15 8. U n l o a d i n g time Average percentage of c a r s unloaded a) i n l e s s than 2k hours 33.f b) betueen 2k and kB hours 53.77% c) i n more than kB hours 12.59% 100 % 9. Main reasons t o keep c a r s more than 2k hours No. o f times mentioned a) s u i t c h i n g not a v a i l a b l e d a i l y 1 b) l o n g u n l o a d i n g p r o c e s s because of e x i s t i n g f a c i l i t i e s 5 c ) u n c e r t a i n t y o f c a r s u p p l y 3 d) d i f f i c u l t y i n o r g a n i z i n g u n l o a d i n g by c r e u s k e) (1) i m p o s s i b l e t o u n l o a d c a r u i t h mix shipment i n 8 hours 2 (2) c a r s l o a d e d very p o o r l y 2 (3) u e a t h e r 3 10-11. T o t a l demurrage days T o t a l at $10 1972 119 109 1973 129 112 ID 5 12. Demurrage as a budgeted i t e m Yes 2 IMo 8 IMo answer 5 T o t a l 15 13. C a r r i e r performance 50-60% 60-70% 60-80% 80-90% 90-100% T o t a l C.N.R. 20 10 40 20 10 100 C P . R a i l 28.57 57.14 14.29 100 Key: ex. 1: 28.57% o f C P . R a i l customers r e c e i v e d c a r s as o r d e r e d between 50 and 60% o f the time i n 1973 ex. 2: 57.14% o f C P . R a i l customers r e c e i v e d c a r s as o r d e r e d between 60 and 80% o f the time i n 1973 14. R e c e i v e r a t t i t u d e s towards demurrage changes ( i ) T h i s q u e s t i o n was v e r y p o o r l y answered and i t was not p o s s i b l e t o r e a c h any m e a n i n g f u l l c o n c l u s i o n ( i i ) ' In a l l cases 47% o f the r e c e i v e r s would make l e s s use of r a i l i f demurrage r u l e s were changed as proposed i n q u e s t i o n 1 4 ( i ) . 53% would use r a i l as much as they do now. 15. A c c e p t a b l e o p e r a t i n g arrangement where a r e c e i v e r would agree t o a maximum 24 hour f r e e u n l o a d i n g time IMo. of t i m e s mentioned N o t h i n g a c c e p t a b l e 9 Cars more s u i t a b l e t o t r a n s p o r t of f o r e s t p r o d u c t s 4 16. Main r e a s o n s f o r c a r s h o r t a g e IMo. o f t i m e s mentioned R a i l w a y i n e f f i c i e n c y 6 Lack o f equipment 4 H i g h e r than e x p e c t e d demand f o r l i m b e r 3 Long u n l o a d i n g p r o c e s s 3 Slow custom c l e a r a n c e 1 

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