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Analysis of freight transportation in the Yukon economy Freybe, Henning Carl Albert 1968

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AH ANALYSIS OF FREIGHT TRANSPORTATION IN THE YUKON ECONOMY  by Harming Carl Albert Preybe B.A., University of British. Columbia, 1965  A THESIS SUBMITTED IN PARTIAL FULFILLMENT OP THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION in the Department of the FACULTY OF COMMERCE AND BUSINESS ADMINISTRATION  We accept this thesis as conforming to the required standard  THE UNIVERSITY OF BRITISH COLUMBIA April, 1968  In presenting this thesis in partial fulfilment of the  requirements  for an advanced degree at the U n i v e r s i t y of British C o l u m b i a , I a g r e e  that the Library shall m a k e it f r e e l y availab 1e for reference and • -  Study.  I further agree that permission for e x t e n s i v e copying of this  thesis for scholarly purposes m a y be granted by the Head of m y  Department or by h.i's r e p r e s e n t a t i v e s .  It is understood that copying  or publication of this thesis for financial gain shall not be allowed  w i t h o u t m y written  permission.  /^Lam*,  Department of The University of British V a n c o u v e r 8 , Canada  Columbia  Pat.  /  M  f  a  ^ L ^ ^ / s ^ A ' t ^  Abstract Transportation- has always been of.vital, importance in the Yukon because of the small population, the harsh climate, and the remoteness from large markets.  It has imported almost  all of its industrial and consumer goods, supported by the export of a limited tonnage of high value mineral concentrates. Little growth has occurred in the past fifteen years in the value of mineral production, as it has remained fairly constantly at about $14 million. At present, though, the Yukon is in a stage of transition as many ore bodies are being brought into production. The effect on the Yukon economy will be substantial, as one estimate sees the dollar value of production increasing more than three-fold by 1975. The objective of this thesis is to determine the impact of this economic change on the total transport system.  It is  thus necessary to establish a measurement of the present level of freight services (the year chosen is 1964) and to establish a forecast of freight services for 1975.  The measurement and  forecast are then used to determine in what way the economic change may influence transport rates and services. The main sources of information for this paper were the various transportation and mining companies that are engaged in Yukon activities.  Considerable use was made of the 1966  Stanford Research Institute study that concerned itself with  11  the economics of paving the Alaska Highway.  While many other  sources were also consulted, they were generally of lesser importance. The growth rate of goods going north into the Yukon is forecast to be a moderate  per annum.  The growth in the  amount of ore concentrates going out of the Yukon should be considerably larger.  For every ton moving north into the Yukon  in 1964, 1.5 tons of freight moved out of the area, while by 1975 the ratio should increase to 6.5 tons for every northbound ton. As the present and planned mining developments are principally in the area north and northeast of Whitehorse where the White Pass and Yukon Route has the competitive advantage, most of the direct increase in freight traffic should benefit the White Pass and Yukon Route.  Other transport companies should  benefit also, but more due to indirect effects of the mining developments on freight traffic«> The increase in the level of freight should make possible a higher utilization of present facilities and lower average costs.  It appears that especially for the "White Pass and Yukon  Route the potential for reductions in freight rates should increaseo  iii  TABLE OF CONTENTS Chapter I.  II.  Page  INTRODUCTION Problem and Importance of Paper  1  Organization of Remainder of the Thesis  3  Procedure and Sources  ij.  Limitations and Considerations  I4.  A YUKON INVENTORY Physical Characteristics  III.  1  7 7  Economy of the Yukon  10  Transportation Streams of the Yukon  20  The White Pass and Yukon Route Stream  20  The Trucking Stream  20  The Air Stream  21  MEASUREMENT OF FREIGHT SERVICES  22  Freight Measurement in General  22  Importance of Measurement  22  Unit of Measurement  23  Techniques and Examples of Measurement  2I4.  Case Study on the Yukon Freight Tonnages per Transport Stream  28 29  Actual tonnages  29  Types of products  29  Cost per Transport Stream Service L evel per Transport Stream  37 I4.3  iv Chapter  Page  IV. FORECASTING FREIGHT  ij.8  Freight Forecasting In General  I4.8  Introduction  I4.8  Techniques for Forecasting  $0  Examples of Forecasts  52  Case Study on the Yukon  59  Problems and Considerations  59  The Actual Freight Forecast  59  V. FORECAST IMPLICATIONS .  VI.  68  Size of Economic Base  68 .  Geographic Areas of Influence  70  Product Groups per Transport Stream  73  Level of Competition  76  CONCLUSION  BIBLIOGRAPHY  82 .  87  APPENDIX A  90  APPENDIX B  97  V  LIST OF TABLES Table  Page  '. I. Snow, average depth. (inches) on ground  9  II.  9  III. IV.  V.  Population of Yukon Territory^ I93I-I96I Total mineral production in the Yukon. 1951-1965 Net value of c o m m o d i t y p r o d u c t i o n b y i n d u s t r i e s , Y u k o n and N o r t h w e s t T e r r i t o r i e s , 19 61-1.9 63  Value of mineral production in the Yukon, 1960-1965  VI.  'VII.  VIII.  IX. X.  XI.  XII.  XIII.  "XIV.  12  Uf  ($'000)  Labour Force in the Yukon and in British Columbia, 1961 Trucking Stream: All freight going into and out of the Yukon by general commodity groupint, 1961}. Whits Pass and Yukon Route Stream: all freight going into and out of the Yukon, by general commodity grouping, 1961}. Air Stream: all freight going into and out of the Yukon, 1961}. Comparison of air freight commodities on British Columbia-Yukon Route and ..on domestic Canadian routes  15  18 30  31 32  35  Comparison of weight distributions for shipments on British Columbia-intoYukon flights and on British European Airways flights  36  Comparison of freight rates (in dollars) for the three transportation streams into the Yukon (per c.w.t.), 1967  39  Revenue per ton-mile ranges for the three transportation streams from Vancouver into the Yukon, 1967  1+2  Time in-traa sit for the three transportation streams from Vancouver-to Yukon points, 1967  1+5  vi  Table XV.  Page, Colombia: productions of gross product generated In freight transport, 1953-65  53  Correlation of G.N.P. at constant (191+9; dollar) prices with Canadian domestic revenue (goods) ton-miles  55  XVII. Yukon: projection of freight, 1967-1975  61}.  XVI.  XVIII.  Projection of concentrates leaving the Yukon per transport stream, 1967-1975  XIX. Yukon;  65  distribution of product groups  among transport streams, 19 61+-19 75  75  A-I  Northbound petroleum, 1961+  91  A-II  Northbound house trailers, 1961].  91  A-III Destination of northbound general freight. 19 61}.  93  A-IV  Destination of Northbound general freight trips, 1961+  9^  B-I  Correlation of G.N.P. at constant (191+9 dollar) prices with total Canadian ton-miles  97  Correlation of total northbound freight (on the W.P. and Y.R.) and G.N.P. at constant (191+9 dollar), prices  98  B-II  CHAPTER I INTRODUCTION 1, Problem and Importance of Paper The purpose of this paper is to analyze the transportation of freight into and out of the Yukon, as well as to consider the impact of the present large scale mining development boom in the Yukon on the transportation system. This necessarily includes an evaluation of the present freight services and freight volume, a forecast of freight traffic for the 1967 to 1975 period, and an estimation of the type of changes that may result in Yukon freight transportation due to the predicted increase in traffic. Within the economic region of the Yukon, with its small population, its harsh and unfavourable climate, and its remoteness from large markets, transportation has always been of vital importance.  This was especially so in the Yukon's  first period of great change, that of the Klondike Gold.Rush. Occurring at the turn of the century some seventy years ago, it also brought with it the need to transport into the Yukon vast amounts of food and general supplies.  While a ship  connection from Skagway, Alaska, just below the southern Yukon border, had already existed for some time with Van-  couver and Seattle a b o u t a thousand miles to the south, there had been only a small difficult trail connecting Skagway and the Yukon.  It was the gold rush that brought about the con- .  struction of a permanent means of transportation from Skagway across the 2900 foot high White Pass to the Plateau that makes up the Yukon. . The 110 mile long White Pass and Yukon Route railroad began regular service in August of 1900, and since then has been the main artery of Yukon transportation. The second major period of change in the Yukon was World War II, and the. building of the first land access to southern Canada:  the Alaska Highway.  Truck transport in-  creased greatly, while at the same time the first airports were built.  New mining interest resulted in the increase of silver,  lead and zinc production, the value of which soon bypassed the value of gold production. Th<? third major period of change in the Yukon economy is taking place at the present time.  Thus until the Second  World War, production of the precious metals gold and silver was in the order of two million dollars a year.  During the  post -war period the Yukon mineral output increased to about twelve million dollars.  While this level of output has re-  mained up until the present, a reassessment of the Yukon's mineral potential has occurred in recent years.  C. J. Brow^thus  1. C. J. Brown, "Yukon Mineral Resources and Transportation," paper presented to the Alaska Centennial Conference, Fairbanks, Alaska, 1967, p. 5".  - 3 -  ••  states that "the results of this reassessment... indicate that Yukon's mineral output should rise to 30 million dollars by 1970 and by 1975 production could exceed $0 million dollars." To be able to appreciate the impact of this substantially increased level of mining activities on the total transportation system, it is necessary to look at the present system and to analyze how it is presently being utilized.  It  will then be possible to arrive at general conclusions regarding the impact of increased mineral production on Yukon freight services and the tatal transportation system. 2. Organization of Remainder of the Thesis The .geographic,, demographic and economic characteristics of the Yukon are reviewed in Chapter II, in an attempt to present the uniqueness of the market for transportation services. Chapter III first looks at problems and examples of freight measurement, and then presents a measurement of Yukon freight services including the volume of actual movement, the cost of transport and the level of service by transporta2 tion stream. Problems and examples of freight forecasting are reviewed in Chapter IV, followed by a presentation of freight forecasting for 1975. Chapter V discusses the implications of the freight 2. The three transportation streams are White Pass and Yukon Route Stream, the Trucking Stream, and the Air Stream. The use of the word "stream" is explained in Chapter II.  forecast,  including  the d i s t r i b u t i o n o f f r e i g h t  effect o f  the b i g g e r e c o n o m i c b a s e ,  the l e v e l of c o m p e t i t i o n b e t w e e n  and  the p o s s i b l e  the t r a n s p o r t a t i o n  The summary and conclusions  3* P r o c e d u r e a n d  customers,  the  effect  on  streams.  are g i v e n i n C h a p t e r  VI.  Sources  The p r o c e d u r e f o l l o w e d w a s r i e s of m e a s u r i n g  and f o r e c a s t i n g  to o u t l i n e g e n e r a l  transportation  services,  t h e n to i n t r o d u c e d a t a o b t a i n e d f r o m  transportation  operating  While  into the Y u k o n T e r r i t o r y .  one  and  companies  significant  source w a s the 1 9 6 6 S t a n f o r d R e s e a r c h I n s t i t u t e economic benefits of paving  theo-  study on  the  the A l a s k a H i g h w a y , m u c h  informa-  t i o n w a s g a i n e d from the W h i t e P a s s and Y u k o n R o u t e ,  Canadian  Freightways  Limited,  p o r t a t i o n and m i n i n g Limitations One export have  ana  Canadian Pacific Airlines,  Considerations  l i m i t a t i o n of the p a p e r is that the Y u k o n is  considerable  changes  air f r e i g h t  volume of  a very  the i n t r o d u c t i o n o f the B o e i n g  737  and  It w o u l d h a v e b e e n d e s i r a b l e  i n late  to h a v e  o f the T r u c k i n g S t r e a m d i v i d e d  the  changes  after  1968.  Vancouver-  into a) a l l  3. T h e o t h e r p r i n c i p a l p a r t is E d m o n t o n Yukon.  may  Yukon  strong p o s s i b i l i t y jet p l a n e  an  exports.  on possible rate  and f o r the W h i t e P a s s  Route, w i t h the former being  3  in market prices  e f f e c t s o n the f o r e c a s t  S i m i l a r l y no i n f o r m a t i o n is a v a i l a b l e  Y u k o n part  trans-  companies.  e c o n o m y and s u b s t a n t i a l  for s c h e d u l e d  and other  trucking,  (and C a l g a r y )  -  and b ) a combination of Pacific Great E a s t e r n from Vancouver Yukon.  to D a w s o n C r e e k a n d  This information,  particular Trucking  companies,  to  the  though, w a s n o t o b t a i n a b l e f r o m  the  and e v e r y t h i n g  from there  is i n c l u d e d w i t h i n  l i m i t a t i o n arising  out o f the p a p e r  to w h i c h the S t a n f o r d R e s e a r c h I n s t i t u t e  Alaska Highway  is u s a b l e .  M u c h of  Thus the study  the u n p a v e d p o r t i o n of the A l a s k a H i g h w a y ,  d a t a about  average freight  This m e a n s  loads p e r  the  the  their i n f o r m a t i o n c o u l d  is c o n c e r n e d w i t h t r a f f i c u s i n g  80 just n o r t h of P o r t S t . J o h n .  is  study on  be applied w i t h further substantiation from private  of  the  stress. A further  extent  trucking  Railway'freight  only  companies.  the f u l l starting  that m o s t  length at m i l e  of  t r u c k are l i m i t e d  their  in  usefulness. Two o t h e r c o n s i d e r a t i o n s here.  O n the one h a n d ,  freight  s h o u l d also be  the f r e i g h t  companies travelling  from  the  s t r a i g h t t h r o u g h to A l a s k a w a s n o t larly,  the s p e c i a l i z e d p e t r o l e u m  products  traffic  carried by  the o p e r a t i o n s  considered. at C a s s i a r ,  the Y u k o n b o r d e r ,  On B.C.,  included  petroleum  it w a s f e l t  just s o u t h of W a t s o n L a k e  as w e l l as the o p e r a t i o n s  from their operations measurements.  Simi-  St. J o h n to  che o t h e r h a n d ,  at T u n g s t e n ,  Territories border,  w o v e n i n so m u c h w i t h t h e Y u k o n e c o n o m y that  the Y u k o n f r e i g h t  States  i n the p a p e r .  carriers t a k i n g  e a s t e r n side of the Y u k o n - N o r t h w e s t  ties r e s u l t i n g  American  continental United  from T a y l o r F i e l d R e f i n e r y n e a r F o r t  A l a s k a w e r e not  mentioned  the f r e i g h t  should be  included  that and  o n the were activiwith  - 6 Finally,  it s h o u l d b e m e n t i o n e d  that  the  freight  t r a f f i c g r o w t h r a t e s u s e d i n the f o r e c a s t m a y n o t r e f l e c t secondary  effects o f t h e m i n i n g b o o m v e r y w e l l , b u t  the b e s t f i g u r e s  that  are a v a i l a b l e f o r this  they  purpose.  the are  CHAPTER II A YUKON INVENTORY The Yukon Territory as a region and as an economy is unique in many respects.  An analysis of its transportation  system and of the modal relationships can thus be best appreciated when based on a description of the physical and economic characteristics of the region. I.  PHYSICAL CHARACTERISTICS  The "Western Highlands," four-fifths of which makes up the Yukon Territory, consists mainly of "an up-thrust, roughly triangular block of ancient, folded mountains amounting to a quarter of a million square miles of peaks, plateaus, glaciers, canyons, tundra plains and broad-mountain-guarded river valleys."'1'  Its whole southern part is made up of the  Yukon Plateau, separated from the northern Peel Plateau and Porcupine Plain by the Ogilvie Mountains. The Yukon Plateau is bordered on the west by Alaska and is cut off from the Pacific Ocean by the massive St. Elias Mountains, and from British Columbia to the south by the northern buttresses of the Cassiar and Coastal Ranges. 2  1. Farley Mowat, Canada North (Toronto: McClelland and Stewart Ltd., 1967), p. 111. 2. Ibid., p. 112.  - 8 The ice sheet that left most of the Canadian North bare and exposed, spared most of the rivers and lands of the Yukon area.  Thus .while soil and sediments have been swept  away in most of Canada's North, they cover the Yukon Plateaus so thickly "that one can fly many hundreds of miles over thera 3 and see no rock, not even on the highest hills." While the plateaus are very fertile, and between "two hundred and fifty thousand and five hundred thousand acres of arable land exist in the Yukon, only a few thousand acres have so far been put to agricultural use."^  Similarly forests  of commercial timber extend much farther north than anywhere else in Canada, although their commercial value is low due to large distance from markets. One of the reasons for the limited use of the fertile land is the severity and length of the Yukon winter.  On  the average, snow covers the ground from November to March (TABLE I) and it is normally only from June to August that precipitation falls in the form of rain.^ While winter temperatures may fall as low as the temperature during an average January night falls to "only" -29°, and rises to -16° during the warmest part of the 6day. In the short summer the temperature may rise up to 90°. 3. Ibid.. p. 113. 1}.. Ibid. 5. Kendrew, W.G. and D. Kerr, The Climate of British Columbia and the Yukon Territory (Ottawa, 19551), p. 192. 6. Battelle Memorial Institute, Transportation Requirements for the Growth of Northwest North~America (Washington. United States Government Printing Office, 1961), p.III-10.  TABLEXII(cont'd) SNOW,  Toxm  AVERAGE D E P T H (INCHES) O N G R O U N D  Nov.  Teslin D a w s o n City Mayo Watson Lake  Source::  Dec.  8  12 7 10 16  rf  6 '6  Jan.  Feb.  Mar.  Apr.  17  18 6 20 30  13 6 12  3  IV  k  lb, 17 25  K e n d r e w , W . G . arid B . K e r r , The C l i m a t e of B r i t i s h . C o l u m b i a a n d the Y u k o n T e r r i t o r y . O t t a w a . 1 9 5 5 . n . 1 9 2 .  Length and severity the b r e v i t y  of  of the Y u k o n w i n t e r  the s u m m e r h a v e b e e n among  the l i m i t e d p o p u l a t i o n i n the Y u k o n . passes mass,  as w e l l  the m a i n r e a s o n s  While  2 0 5 , 0 0 0 s q u a r e m i l e s , w h i c h Is  its  area  total population.  7  TABLE  of C a n a d a ' s  .03% of of  II TERRITORY  Population  1931 191+1 1951 1961  Source:  land  Thus the p o p u l a t i o n d e n s i t y  POPULATION OP YUKON 1931-1961 Year  for  encom-  its 1 9 6 1 p o p u l a t i o n o f lit.,628 ( T A B L E II) is o n l y  Canada's  as  V 230 V 9 1 V 9,096 11)., 628 Canada  Yearbook  7. S t a n f o r d R e s e a r c h I n s t i t u t e , I m p r o v e m e n t P r o g r a m for the A l a s k a H i g h w a y ; A n Analysis of Economic Benefits, prepared for t h e D e p a r t m e n t of N o r t h e r n A f f a i r s a n d N a t i o n a l R e s o u r c e s G o v e r n m e n t of C a n a d a (Ottax-ra: Q u e e n ' s P r i n t e r and C o n t r o l l e r ' of S t a t i o n e r y , 1966), p . I V - 5 2 .  - 10 persons per square mile is .07, while that of Canada as a whole is 5.12.  8  The Yukon population increase during the most recent  9  decade averages out to about Ij.. 9% per annum.  The biggest city in the Yukon, and also the nerve center of transportation activities, is Whitehorse.  Its popu-  lation was 5031 in 1961, almost double the 1951 figure of 2591]-.  The other major communities are Watson Lake, Dawson,  and Mayo. II.  ECONOMY OF THE YUKON  Economic development of the Yukon Territory has been faced with considerable handicaps, including "geographic isolation, inaccessibility to important export markets, vulnerability to uncontrollable external factors, and high cost 4-  „10  4-  structures.  It has centered primarily around the produc-  tion and export of staple products, especially gold, silver, and other metal concentrates.  While mining has been the Yukon's  major industry, some contribution to the economy has also been made by forest products and in recent years oil and gas exploration. It was the Yukon's escape from the glacial ice sheet that made possible the first great influx of population. 9.. Surprisingly enough, the 1966 Census data, as listed by the Dominion Bureau of Statistics 1967 Population booklet, shows^the Yukon population as having decreased to 1 4 , 3 8 2 . This is quite unexpected, and not enough is known for evaluating possible implications. 10. Ibid.  ••  - 11 -  About eighty thousand people"'""'" are estimated to have come from all corners of the earth to search for the elusive gold that over the ages had sunk to the bottom of Yukon rivers and streams.  If an ice sheet had moved across the Yukon, as it  did over the rest of Canada's north, "the protecting upper layers of sand and gravel would have been stripped away and the  12 placer gold with them." While the majority of these fortune-seekers did not remain in the Yukon for long, some aid decide to make their permanent home there.. For many years gold mining was the only major industry and source of income.  Not until the post World  War II period did the significance of gold mining in the Yukon economy undergo any major change. During World War II the Alaska Highway was built as an overland link between Alaska and the continental United States.  Not only did the highway provide the Yukon with a new  industry, tourism, but also made it easier for mining exploration and development to be carried out. The major mining operation in the Yukon, United Keno Hill Mines Ltd., started Its silver-lead-zinc operations in the late forties, and have since then accounted for the bulk of mineral production in the Yukon.  During 1963 they accounted  for 69/£ of the total value of Yukon mineral output.1-*  TABLE  III indicates the total mineral production of the Yukon for the 11. Mowat, o£. cit., p. HI4.. 12. Ibid., p. 113.  13. Stanford Research Institute, o£. cit., IV-56.  •• - 12 -  TABLE III TOTAL MINERAL PRODUCTION IN THE YUKON, 1951-1965  Year  Amount ('000,000)  Year  1951 1952 1953 195£ 1955 1956 1957 1958  $9.8  1959 I960 1961 1962 1963  ll.il-  11^.7 16.6 1^7 15.7 li+.l 12.3  196I4.  1965  Amount ('000,000) $12.6 13.3 12.8 13.1 II4..J4. 15.2 13-2  Source: Department of Mines and Technical Surveys, Canadian Minerals Yearbook, Ottawa: Statistics Section, Mineral. Resources Division, Queen's Printer and Controller of Stationery.  •• - 13 last fifteen years. The importance of mining production as a part of total commodity production in the Yukon can be shown statiscally only through aggregation with the Northwest Territories (TABLE IV).  While the totals do not divide equally between  the two economic regions, the table still gives a relatively good indication.  Thus for the total net value of commodity  production for 1963, 76.6% is accounted for by mining. 1 ^ Among the various metals mined in the Yukon, gold had been the major one until the Second World War.  While it  is still important, it has in recent years been passed by silver in dollar value of total production.  The other major  metals mined are lead and zinc (TABLE V). There are four general mining districts within the Yukon.  The Mayo Mining District has been the most productive  one since the early fifties due to the presence of United Keno Hill Mines Ltd.  While the Whitehorse Mining District  and the Dawson Mining District have not been very productive in recent years, the present development work by Anvil Mining Corporation in the Ross River area, by Cassiar Asbestos at Clinton Creek, by New Imperial Mines Ltd. near Whitehorse, and by several smaller mining companies is a strong indicator of rising production in these districts in the near future. The Watson Lake Mining District has little production activity  111.. Dominion Bureau of Statistics, National Accounts and Balance of Payments Division, Industrial Output Section, Survey of Production. 1963.(Ottawa; Queen's Printer*and Controlli? of Stationery, 1963).  - ii+ -  TABLE IT  BET VALUE OF COMMODITY PRODUCTION BY II© US TRIES, YUKON AID NORTHWEST TERRITORIES, 1961-1963  Commodity  1961  '000  Agriculture ct  1962  >fo  '000  -  Forestry  $  -  201  0.1%  Fishing  675  Trapping  -  570  1.9%  2.2  859  1,1+25-  1+.7  23, 951+  78.6  3,1+87  11.1+  3, 611+  Manufacturing  738  2.1+  1,206  Construction  _  Mining Electric Power  $30,1+79  —. .  100$  $  '000  1963  _ 562  1.9%  2.9  796  2.6  1,01k  3.1+  931+  3.1  22,201  75.1+  22,968  76.6  12.3  3,260  10.9  l+.l  1,1+80  1+.9  '  $29,1+61+ 100%  $  wm  $30,000  100%  Source: Dominion Bureau of Statistics, National Accounts and Balance of Payment Division, Industrial Output Section. Survey of Production, 1963. Ottawa. a  Included with British Columbia total, and thus not available.  •• - 15 -  TABLE V  VALUE OF MINERAL PRODUCTION IN THE YUKON, 1960-1965 ($* 000)  Mineral  I960  1961  1962  $6,10-7  $6,539  $7,552  Gold  2,652  2,371  2,050  2,081).  Lead  2,167  1,712  1, 6l6  1,868  Zinc  1, 789  1,528  1,14-39  1,515  2, 025  Silver  1963  1961).  1965  $7,891).  $6, 289  1,671  2,182 2, 637 2, 111).  Cadmium  207  228  231  326  1+28  423  Copper  -  257  13k  -  -  -  Hi}.  H5  121).  Coal  97  98  88  Source: Department of Mines and Technical Surveys, Canadian Minerals Yearbook, Ottawa: Statistics Section, Mineral Resources Division, Queen's Printer and Controller of Stationery.  •• - 16 -  within the Yukon boundaries, even though just south of the B.C.-Yukon border is the Cassiar Asbestos Mine at Cassiar, while the Canada Tungsten operation is just east of the YukonNorthwest Territories border. The three other basic industries in the Yukon are forest products, agriculture, and the petroleum industry. While substantial forest resources exist, the production has been limited to local consumption.  Thus 1963 production was  under $250,000 while, as a comparison, mineral production •.••';...  • 15  during the same year was $11}..ij. million.  The situation of  supplying only local markets is not likely to change much during the next ten years.  Agricultural production similarly is  only for local consumption, 1 L with total cash income being between $85,000 to $ll}.0,000  per year*  The petroleum industry, even though no oil or gas has been produced commercially, is making itself felt in the Yukon economy, through expenditures on exploration.  During  1956 and 1957 expenditures averaged $1 million annually, rose to about $2 million per year through 1961, and increased further to about $3.5 million per year for 1962 and 1963.^  It  is felt though that even if sizeable oil and gas reserves are found in the northern Yukon area, their economic development before 1975 is seriously hampered due to (a) lack of large domestic market; (b) existence of a high-cost structure; and 15. Stanford Research Institute, op. cit., p. IV-58.. 16. Ibid., p. IV-59. 17. Ibid., p. IV-60.  - 10 .(c) r e m o t e n e s s f r o m p o t e n t i a l e x p o r t  markets.  This g e n e r a l r e v i e w of e c o n o m i c Yukon Territory labour f o r c e . divisions ment  m  ay  l8  activities  in  be c o n c l u d e d w i t h a b r i e f l o o k at  T A B L E VI c o m p a r e s  the l a b o u r f o r c e  the  for  various  o f the Y u k o n w i t h that of B r i t i s h C o l u m b i a .  i n the t r a n s p o r t a t i o n f o r c e  h i g h e r f o r the Y u k o n , w h i l e about i+O% h i g h e r .  is p r o p o r t i o n a t e l y  Employ-  about  export-oriented  force o n the o t h e r h a n d is about  the c l a i m that economy.  less for the Y u k o n  direct m i n i n g  activity  i n the Y u k o n ,  company purchasing  sales than  the  as w e l l as by  from f i r m s o u t s i d e t h e  is  the  The  for B . C . , w h i c h c a n to a l a r g e e x t e n t b e e x p l a i n e d b y reduced wholesaling  60%  e m p l o y m e n t i n the p r i m a r y f o r c e  This w o u l d s u b s t a n t i a t e  Y u k o n is a r e s o u r c e - b a s e d ,  the  much the  Terri-  tory.  II.  TRANSPORTATION STREAMS OP THE Y U K O N  A resource-based, supported by an efficient because  exports have  export-oriented  transportation system,  to b e t r a n s p o r t e d  a cost t h a t the p r o d u c t  is s t i l l able  also to p r o v i d e r e a s o n a b l y - p r i c e d factory  e c o n o m y h a s to only  to their m a r k e t at  such  to c o m p e t e i n p r i c e ,  but  transportation for  inputs, m a n u f a c t u r e d g o o d s ,  food products,  necessary materials.  If the  exorbitant,  in a n e x t r e m e l y h i g h - c o s t  resulting  not  be  incoming  and  cost to i m p o r t m a t e r i a l s  other were  structure,  the e x p o r t p r o d u c t i o n of the e c o n o m y could b e p r i c e d out of  17. Ibid.  then the  •• - 18 -  TABLE VI LABOUR FORCE IN THE YUKON AND IN BRITISH COLUMBIA, 196l  Area  Yukon No. of Jo of People Total  B. C. % of No.; of People Total  Managerial  501  8.0$  57,023  9.9$  Professional & Technical  501  8.0;  56,661+  9.8  Clerical  626  10.0  73,683  12.7  Sales  161  2.6  .1+2,175  7.3  Service & Recreation 1,153  .18.4  78,199  13.6  Transportation & Communic.  661  10.6  37, 651  6.5  Primary  722  11.6  I4.6,959  8.1  1, 320  21.1  139,1+08  21+. 1  Craftsmen Labourers  31a  5.6  28,699  5.0  Not stated  256  l+.l  17.187-  3.0  6, 21+2 100$  Source:  577,61+8  100$  The Financial Post, Survey of Markets and Business Year Book, 1967-68, Toronto: Maclean-Hunter Publishing Company Ltd.  1Q  inter national, market.  Since the turn of the century the Tukon has bsen connected to the outside world by the White Pass and Yukon Route, which is made up of rail service for the 110 miles from Whitehorse to tidewater at Skagway, and ship service from there  20 to southern B.C.  Up to World War II local transportation  consisted mainly of boat service, and at one time as many as sixty-five sternwheelers plyed the waters of the Yukon Biver between Whitehorse and Dawson City. The second World War brought with it the building of  the Alaska Highway, and. not only did the transport of materials within the Yukon turn from shipping to trucking, but also was there a significant increase I n the amount of materials trucked overland to the Yukon. At the same time the building of airports fostered the growth of commercial air transport between the Yukon and the rest of Canada. By the middle fifties the White Pass and Yukon Route had established an integrated transportation system. 22  This  considerably increased the efficiency of their system, as hitherto goods leaving the Yukon first had to be put on trucks for shipment to Whitehorse, then transferred to the railroad to 19. As it is, the present high-cost structure of the Yukon S9COndar local"lemSd. ^ ^ manufacturing, although only for 20. Brown, 0£. cit., p. 2. 21. Mowat, o£. cit.. p. 116. 22. Brown, 0£. cit., p.  •• - 20 go to Skagway, and finally put on the boat to be shipped south. Through integrated facilities the time involved for these intermodal transfers was very much reduced, as now the same container could be put from the ship onto the train and then onto the trucks, and vice versa. The facilities of the White Pass and Yukon Route were further improved in 1965.  Over 8.5 million dollars were  spent to upgrade the container concept and to construct a new container ship (the Prank H. Brown), capable of handling up to 6500 short tons of combined freight and petroleum products.2"5 The ship has facilities to carry vented, heated, dry and refrigerated container units.  While the. frequency of sailings  is still only every two weeks, the freight capacity and handling faciliti es have been improved considerably. The, Yukon Territory may at present be considered as being served by three transportation streams : 2i+ 1* The . White Pass and Yukon Route ; (W.P. and Y.R.) Stream.  It entails ship service between Vancouver and Skagway;  railway transportation from Skagway to Whitehorse; and truck transport from Whitehorse to other points in the Yukon area and northern B.C. (mainly Cassiar). 2  * The Trucking Stream.  It entails either truck  transport between B.C.f Alberta, and Prairie cities and the Yukon', or rail transportation from Vancouver or Edmonton to the Dawson Creek area, and truck transport between there and 23. Ibid. 2i(.. The term "stream" was felt to be the most appropriate one m the context of this paper. *  •• - 21 -  the Yukon.  For local shipments in the Yukon, trucking assumes  the major responsibility although a small share of goods is carried by air. 3. The Air Stream.  It involves scheduled air freight  services via Canadian Pacific Airlines (C.P.A.) between Vancouver and the Yukon, and between Edmonton and the Yukon. The abo ve three transportation streams will be used in the remaining chapters of this paper.  While important roles  are played by unscheduled aircrafts, chartered helicopters, private small-truck operators (owning one truck, less than 10 tons) they are not significant from the point of view of interprovincial freight transportation and are therefore excluded. The three transportation streams are an important part of the small, resources-oriented Yukon economy.  The  population is very small, and almost all consumer and industry products are imported from outside the area, mainly southern British Columbia and Alberta.  It will now be desirable to  look more closely at the transportation freight services for the Yukon as provided by these three streams.  CHAPTER III MEASUREMENT OF;. FREIGHT SERVICES I.  FREIGHT MEASUREMENT IN GENERAL,  Importance of Measurement The importance of freight measurement arises not simply out of a comparison of actual tonnages moving within and between economic regions by different modes (or transporta tion streams).  It Is just as Important to include with these  tonnages a more detailed analysis of the relationship existing between the modal freight services.  This analysis includes  principally the main types of products that move along different modal routes, the main origin and destination patterns for the different modal routes, the cost of transport for different modes, the types of customers encountered by different modes, and the level of service offered by each mode. An understanding of these relationships can be of some significance at the governmental level not only in assist ing with the possible adjustment of regional transport policy and in the decision-making concerning the extent to which additional transport facilities requiring public expenditure may be needed.  It may also be of value in the formation of  policy regarding economic development of regions.  Finally,  this understanding is necessary for the formulation of freight - 22 -  •• - 23 forecasts and to facilitate the comprehension of forecast implications at the government and at the Industry level. Unit of Measurement Before looking at specific techniques of freight measurement It is necessary to decide on a unit of freight tonnage measurement.  While the choice of available units  ranges from tons, carloads, ton-miles, and carload-miles to dollar revenue, the usual choice is ton-miles. given by Wilson utility".  The explanation  is that transportation firms create "place  Thus while they move things from points where  their economic value is more, they produce a product which is bound up with weight and distance. The usage of  1  ton-miles? may, on the other hand,  result in an underestimation of the contribution of some modes as these may offer more services than others, thereby making their function more valuable.  Thus ton-miles Would under-  estimate the contribution of inter-city trucking (in comparison to railway ton-miles) because truck transport normally carries more of the higher valued traffic and usually includes pickup and delivery services.  2  Dollar revenue might thus be a better estimation of the 1. George W. Wilson, "On the Output Unit of Transportation, Land Economics (Madison, Wisconsin: University of Wisconsin, Aug. 1959), p. 268. 2. D.W. Garr and Associates, "Truck and Rail Competition m Canada, Royal Commission on Transportation. Vol. II (Ottawa* Queen's Printer and Controller of Stationery, July 1962) p 7  -  2k  -  contribution that each, mode makes to transport.  The diffi-  culty. that arises is one of obtaining meaningful revenue data, as it is only intercity transport revenue that is desirable for modal comparison, and company records would show revenue from other transport functions as well.  Furthermore, it is question-  able whether the resulting comparison would be a worthwhile tool for providing usable results.  As previously indicated, the  unit that is thus used by most transport studies is 'ton-miles'. For the measurement of tonnage into and out of the Yukon, though, the unit "tons" is used.  Part of the reason is  the difficulty of finding complete ton-mile data.  Also, most  of the northbound general freight originates in two areas., Vancouver and Edmonton, which are approximately equidistant to the Yukon.  Thus when tonnages are changed to ton-miles, the  relationship between the amount of freight, originating in Vancouver and Edmonton is still about the same.  The unit "tons"  then is used to compare the tonnage of freight travelling along the three transportation streams. Techniques and Examples of Measurement It is desirable to examine the approach of other studies to the problem of freight measurement before attempting a measurement of freight services for the Yukon area. For most countries it is possible to base an analysis of freight transportation on governmental data.  A problem  arises for developing countries that have not established freight data collection, as well as for the case where national data is  - 25 available but where a regional area is of prime interest. An extreme case involving the former is an economic •survey of Western Africa"^ which, when faced with the absence of data for the volume of road, transport, looked at two very indirect indicators.  The first one, the number of vehicles in  use in each country, was inadequate in its reflection of road traffic growth because no increase in average load per truck nor intensity of utilization could be seen.  This inadequacy  was then partially accounted for by statistics of motor fuel imports.  For instance, in the period 1952 to 1962 Ghana exper-  ienced an increase in gasoline imports from 111.6 to 196.1|. thousand metric tons, while its diesel oil imports grex^r from 105.7 to 2I+I4-.O thousand metric tons.  While this data did not  suffice by Itself, It did present some indication of the level of truck transport. In another area a problem arose when it was found desirable to evaluate the truck usage of the newly built Gochabamba to Santa Gruz Highway In Bolivia. As data were not directly available, field traffic sampling had to be carried * out to reach an estimate of truck traffic.  Of the several  studies made, one reached its estimate by taking a 214. hour count of traffic leaving Santa Cruz.^  For ten months it found  the destination, main type of cargo, and average weight of all 3. United Nations, Economic Survey of Africa. Vol. I (Ethiopia, 1966). 1+. Ibid., p. 61].. 5. G.W. Wilson et al, The Impact of Highway Investment on Development (N.W.Washington, D.C.: The Brookings Institution, 1966), p. 33.  ••  - 26 -  vehicles leaving the city.  These data were then extrapolated  forward to arrive at the number of trucks using the highway for the year, as well, as the average weight of these trucks. Another study of the same highway section, reached a considerably larger traffic estimate by basing it on divided /  highway segments. • The study used a daily 10 hour sample to arrive at a daily traffic density for different highway segments, and carried these densities forward to achieve an estimate, of yearly truck traffic for the total,highway. The discrepancy between the two estimates arose mainly because the.larger one recognized the truck traffic which left Cochabamba but did not travel as far as Santa Cruz. study did not do this.  The first  Thus .the decision made by the first  study to stage its traffic count at Santa Cruz rather than at Cochabamba caused its estimate to miss a considerable portion of truck traffic. The Stanford Research Institute Study of the Alaska Highway based its estimate for the most part on data received through Interviews with the main trucking firms" (of which fortunately there were not very many).  These data were then sub-  stantiated by a 3 week, 21}.. hour, traffic sample taken at Watson 7 Lake.  Through this sample the remaining small truck traffic  was accounted for.  This remaining portion actually made up only  about 20 percent of all truck vehicle miles travelled on the highway. 6. Ibid.. p. 31+. 7. Stanford Research Institute, ojd. cit., p. A-19.  ••  - 27 The techniques for the Bolivian study and the  Alaska Highway study were basically the same in that they were both depending on actual traffic counts, even though a shorter time period was used for the latter.  The Alaska High-  way study was in the advantageous position that the number of trucking firms was relatively small, in contrast to the large number of small operators using the Cochabamba-Santa Cruz Highway.  Prime importance was therefore put on information  gained directly from transport companies, with traffic count information being used more as a check and for rounding out the picture.  ,  Thus while the technique of measurement is normally an actual count and survey of traffic passing a certain point, there are certain variables that may be adjusted to suit the regional area.  These variables Include the number of hours  per day and the number of weeks in general taken for the field count, the point along the route at which the count is taking place, and the emphasis put on other sources'of information. The danger with a traffic count is that unless the  count is continued for the full year, its results are subject to a wide variation of interpretations.  This is especially  so as little information is available on seasonality of traffic and possible changes in the size of specific commodity flows. More generally, it may be concluded that a regional case study is much closer to reality in contrast to an aggregation of many regions which arises out of national data. Hirschman thus claims that "generalizations involving large  A.  aggregates of the economic system have somehow seemed to be lacking in ready applicability to the specific problems that g  confront the practical planner."  The Yukon can be looked  upon as a region where conclusions reached have more practical applicability. . II. CASE STUDY ON THE YUKON While the above samples have shown some of the variations that occur in actual freight measurements, It will be desirable to use the Yukon Territory as an example of an economy for which only limited useful data is available, and to develop for it a measurement of freight services.  This measure-  ment has to a limited extent been based on the recent Stanford Research Institute study of the Alaska Highway.  Even though  the study used "vehicle-miles" as the basic output unit, much of its data were still applicable. Most of the gaps that still occurred were filled by information gained from transportation company sources. As the Stanford study used 1961+ transportation data, the same year will be used for the purpose of this paper for determining tonnage measurements.  Other comparisons  such as cost and service comparisons, will be on the basis of 1967 company information. The freight measurement will first deal with the actual tonnages and the types of products travelling via each transportation stream, and will then consider the cost of transport and the service level existing psr transportation stream. 8. Wilson et al, 0£. cit.. p. 162.  •• - 29 -  1. Freight Tonnages per Transport Stream Actual tonnages.  The first transportation stream to  be considered Includes all freight going by truck or by railway to the Dawson Greek area, and from then by truck into the Yukon.  The tonnages, by commodity grouping, are shown as  going north into the Yukon and going south out of the Yukon. (TABLE VII). ' •, • . The White Pass and Yukon Route Stream, is made up of all freight utilizing the White Pass and Yukon Route ship and rail facilities, with distribution in the Yukon being conducted by trucking.  The results are listed in TABLE VIII.  The third transportation stream includes all general freight and mail going by scheduled airline operations into and out of the Yukon (TABLE IX). Types of products.  The different types of products  that travel along the first two transportation streams are quite similar with respect to specific commodity groups, although predictably the products travelling-by airfreight are of a different type as well as generally of much lesser weight. The northbound truck commodities include meat and packinghouse products, fresh and frozen produce, miscellaneous manufactured items, building products and cement, and small quantities of beer and lumber.9  Special carrier trucks,  transport bulk petroleum and refined petroleum products, house trailers (for commercial, industrial or private use) 9. Stanford Research Institute, 0£. ext., p. V-19.  •• - 30 -  TABLE ¥11 TRUCKING STREAM: ALL FREIGHT GOING INTO AND OUT OF THE YUKON, BY GENERAL. COMMODITY GROUPING, 196]+  Into the Yukon:  Out of the Yukon:  General Freight  13,900 tons  Petroleum  11,720 tons  Household Effects  230 tons  House Trailers  IOI4. tons  General Freight Asbestos8" Household Effects  2,000 tons 10, 2l}£> tons 730 tons  Source: Appendix A, except for asbestos. a  Tonnage obtained from Pacific Great Eastern Railway Company.  b  While these were the best estimates available (calculations in Appendix A), they are still relatively unreliable and should be viewed with caution.  •• - 31 -  TABLE VIII WHITE PASS AND YUKON ROUTE STREAM: ALL FREIGHT GOING INTO AND OUT OF THE YUKON, BY GENERAL COMMODITY GROUPING, 1961+  Into the Yukon:  Out of the Yukon:  Source:  General Freight3-  25,000 tons  Petroleum prod.  16,500 tons  General Freight8"  2,000 tons  Ore concentrates  31,700 tons  Asbestos concentrates  56, 000 tons  White Pass and Yukon Route, and various other companies.  amIhis does not include freight carried along the Trucking Stream b y Loiselle Transport Limited, a subsidiary of the White Pass and Yukon Company.  - 32 TABLE IX AIR STREAM: ALL FREIGHT GOING INTO AND OUT OF THE YUKON, 1961+  Into the Yukon:  Out of the Yukon:  Source:  General Freight  207 tons  Air Mail  31+ tons  General Freight  53 tons  Air Mail  31 tons  Canadian Pacific Airlines and Post Office estimates.  ••  - 33 -  and household effects.  In addition there are culvert and  drilling pipe, heavy machinery and oilfield equipment commodities, delivered mainly in the Fort Nelson-Watson Lake area. All the other commodities are delivered to communities all along the highway. The main southbound truck commodity is asbestos fiber going to the P.G.3. railhead at Fort St. John.  Others  include used machinery and equipment, empty beer bottles, used pipe, household effects and, to a lesser degree, tourist automobiles. The northbound. White Pass and Yukon Route Stream commodities, as indicated before, are very similar to those in the Trucking Stream, although the proportions are very: different.  While specific figures are not available, the emphasis  is much more on building materials and machinery.  The com-  modity groups in general include perishable and packaged groceries, building materials, liquor, machinery, general 11  merchandise:, and petroleum products.  The main southbound  commodities were of a much different type, though, as ore concentrates and asbestos fiber accounted for 98%' of the southbound tonnage.^ The commodities travelling along the northward Air Stream were of a generally different nature.  Similar to air-  freight in other Canadian regions, these commodities x*jere either emergency items, goods of high value, or of a highly 10. Ibid. 11. White Pass and Yukon Route. 12. Ibid.  - 31+ perishable nature.  Table X lists these commodities, and com-  pares them to the ten largest commodity groups carried on Canadian domestic routes.  For the Yukon the five most common  items, making up more than 80% of total shipments, are general merchandise, machinery and parts, automobile and truck parts, newspapers and magazines, and films and video tapes. Looking even further at the sizes of shipments travelling by air freight to the Yukon, TABLE XI compares them to air freight data found by a 1962 British traffic distribution study.  Thus for freight shipments to the Yukon, 9i$ of all  the shipments (weighing between 1 and 50 pounds each) accounted for 71$ of total weight carried.  For the shipments on B.E.A.  routes, however, using approximately the same weight range of from 1 pound to 72.5 pounds, 71+% of all shipments accounted for only 12% of total weight.  Thus British European Airways carried  26% of all their shipments m th a weight of more than 72.5 pounds, accounting for 88% of all the freight tonnage transported by the company.  Of the freight going into the Yukon, though,  only 8% of shipments were over 50 pounds, and. "this represented only about 10% of total weight carried into the Yukon. This difference in the size of shipments can be partially explained by the size of the Yukon economy, in that there are fewer customers for the goods shipped by air.  An-  other possible reason is that for shipments under thirty pounds, Air Stream rates are very competitive with rates for the other transportation streams (TABLE XII).  Over fifty pounds no rate  incentives exist to encourage larger air shipments (unlike inter-  •• - 35 -  TABLE X COMPARISON OP AIRFREIGHT COMMODITIES ON BRITISH COLUMBTA-INTO-YUKON ROUTE .AND ON DOMESTIC CANADIAN ROUTES  B.c.-Yukon Route Commodity  Domestic Canadian Routes  % of total Commodity shipments8:  • . -  Rank -,.  General Merchandise  22.8%  Machinery part's & equip..  '1  Machinery, parts  22.0  Cut flowers  2  Automobile,truck parts  15-3  Electrical products  3  Newspapers,magazines  13.2  Wearing apparel  k  Films, video tapes  8.1  Magazines, books  5  Food parcels  2.3  Auto parts,accessories  6  Flowers  2.1  Aircraft parts  7  Unknown items  6.7  General hardware  8  Miscellaneous  7-5  Advertis ing,displays  9  100.0^  Source:  a  Photographic film  10  For B.C.-Yukon Route: Canadian Pacific Airlines. For Domestic Canadian Routes: Morton Stern, "Air Freight takes off," Canadian Business. June 1967, p. ' ~  These shipments include all the shipments during four -sample weeks, in 1967.  •• - 36 -  TABLE XI COMPARISON OP WEIGHT DISTRIBUTIONS FOR  SHIPMENTS ON BRITISH COLUMBIA-TO-YUKON PLIGHTS AND ON BRITISH EUROPEAN AIRWAYS PLIGHTS  B.C. to Yukon Plights Weight  B.E.A. Plights  % of total i of total shipments3- weight  1-10 lbs.  31$  1%  Weightb % of total shipments 1-10.9 lbs.- 37%  % of total weight 2fo  11-20  26  18  11-21.9  12  21-50  37  1+9  22-72.5  21+  8  51-100  6  16  72.6-109.9  6  5  101-200  1  3  110-219.9  9  11  201-[p0  1  7  220-1+39.9  6  11+  1+1+0 & over  6  58  Sources  a b  Por B.C. to Yukon Plights: Canadian Pacific Airlines. Por B.E.A. Plights: D.G. Little, "Air Freighting," The Journal of the Institute of Transport, London: Sept. 1962, p. 373.  Includes all shipments during four sample weeks, 1967.  The B.E.A. weight groupings have been transformed from kilograms to pounds.  Note:  The percentages may not add due to rounding.  •• - 37 -  national routes where incentives do exist), and except for emergency shipments the Air Stream may be far too expensive  compared to the other streams.  If this were the case, specific  rate decreases for larger shipments provide a potential for increasing total freight for Air Stream. Of the southbound Air Stream commodities, 27% of the shipment packages contained film and video tapes, and furs, while the remaining 7jfo of packages involved a large number of commodity groupings, each of which consisted of only a small 13 percentage of total shipments.  The general freight volume  Itself was only a quarter of the northbound Air Stream volume. 2, Cost per Transport Stream Having looked at the type of commodities travelling along the three transportation streams, it will now be desirable to indicate the chief origins of freight volume going into the Yukon.  The origin-destination path with the largest  traffic, Vancouver to Yukon, can then be conveniently used to outline a cost, or rate, comparison for all three transportation streams into the Yukon, Approximately 80^ of the: general freight trucking volume into the Yukon is carried by two firms, Canadian Freightways Ltd. and Loiselle Transport Ltd.1^" TfiThile Loiselle has about bfifo of its traffic originating in Edmonton and 60%' in, Dawson Creek, Canadian Freightways has about 30% of its 13. Canadian Pacific Airlines. Ik. Canadian Freightways Ltd.;  Loiselle Transport Ltd.  •• - 38 traffic Creek,  and Lj.0% f r o m V a n c o u v e r .  Creek freight coming  E v e n t h o u g h m u c h o f the  came up b y P . G . E . f r o m V a n c o u v e r ,  directly from Vancouver by  for rate  Dawson  it is t h e k.0%  t r u c k that is of  interest  comparison. The s c h e d u l e d  about  Calgary, 2 0 % f r o m D a w s o n  coming f r o m E d m o n t o n and  7:0% o r i g i n a t i n g  Whitehorse,  airline freight  in Vancouver  2 0 % for W a t s o n L a k e ) ,  coming f r o m E d m o n t o n  into the Y u k o n has  (75% of this d e s t i n e d and  for  almost all o f the balance  ( 7 0 % of this t o W h i t e h o r s e ,  15%to  Watson  Lake, and 10% to Dawson). 1 ^ V a n c o u v e r is the s o u t h e r n t e r m i n a l of the W h i t e and Y u k o n R o u t e S t r e a m , f r o m the V a n c o u v e r  area bound for  The r a t e s for three  and it is the o n l y o r i g i n f o r  TABLE XII.  While  Company  and one air f r e i g h t due to the m a n y Yukon  travelling  along  to the Y u k o n are c o m p a r e d  rate,  different  sent to the Y u k o n ,  similarly has only  for  and. C a n a d i a n  one air  express  a p r o b l e m for c o m p a r i s o n does rates  the  in  Canadian Preightways has only one rate  m o r e t h a n 90% o f the g o o d s Pacific Airlines  freight  the Y u k o n .  g e n e r a r freight  transportation streams  Pass  arise  e x i s t i n g o n the W h i t e P a s s  and  Route. The s a m p l e r a t e s •that are u s e d for the W h i t e "Pass'  and Y u k o n Route Stream therefore  are a l o w  (Item 55),  (Item 25).  and a h i g h l e v e l rate  Item 80 includes machinery. ceries  I t e m 5 5 exists  s u c h as v e g e t a b l e s , h a r d y f r u i t s ,  (packaged,  d r y or I n g l a s s ) , w h i l e  (Item 80), a m e d i u m More  specifically,  of p a c k a g e d  and h o u s e h o l d  Item 2 5 i n c l u d e s  a  grosundries  large  39  TABLE XII  COMPARISON OP FREIGHT RATES (IN DOLLARS) FOR THE THREE TRANSPORTATION STREAMS INTO THE YUKON (per C.W.T.2), 1967  A. Vancouver to Watson Lake Minimum Weight (lbs) 10 50 100  500 1M 10M 36M  White Pass and Yukon Route Item 80 5.50 5.50  5.50 1+. 30 3.96 3.51 2.95  Item 5.5o  5«  5o  5.5o  5.10 l+.5i 1+.16  Truck  Item 25 6.30 6.30 6.30  6.30 5.71  1+.96  i^.25  Air Freightb Express  7.81  7.81 •7.81 7.60 7.29  6.60  11.85 19.35 18.50  1J-.30 21.50 1+3.00  l+3« 00  5.95 1+.00  B. Vancouver to Whitehorse 10  50  100  500  10M 36M  4.50 1+.50 i)-.5o 3.5o 3.25  2.75  2.50  4.5o ii-.5o  4.50  k - 30 3.80  3.1+0 3.10  5.50 5.50 5.50 5.50 5.00  1+.20  3.80  8.23 8.23 8.23 8.07  7.81  6.60  11.85  19.35  18.50  6,38  5.15  1+.90  21+. 50  1+9.00 1+9.00 -35-  to  continued 'next page a  When the minimum weight is less than 100 pounds the given dollar rate is the actual rate for the weight listed.  -  k-0  -  TABLE XII (cont'd)  .COMPARISON. OF FREIGHT RATES (IN DOLLARS) FOR THE THREE TRANSPORTATION STREAMS INTO THE YUKON (per C.W.T.a), 1967  C. Vancouver to Mayo Minimum Weight (lbs.) 10 50 100 500 1M 10M 36M  White Pass and Yukon Route ~~ ' Item 80 Item Item 25 5.00 5.00  5.00  5.00  U.70: ••3.8.0 3 . 30  5.80  5.80  5.80 5.80  5.25 •3.90  7.00 7.00 7.00 7.00  6.45 5.25 4 . 60  Truck  10.83 10.83 10.83 10.32 10.06 7.88  Air Freight  Express  8.35 15..35 24.95 2ij..lp  31.00 62.00 62.00  9.10 16.85 27.75 26.90  7.20 36.00 72.00 72.00  6.20  6.65  P. Vancouver to Dawson City 10 50 100 500  1M 10M 36M  Source:  5.60  5.60 5.60  5.60  5.25' 4.25 3.60  6.40 6. lj.0. 6.40 6.I4.0  5.80  4.90  4- 20  7.60  7.60 7.60  7. 60  7.00  5.70 4.90  11.25 11.25 11.25 10.57 10.31  8.13 6.90  •Vi"  Published rates of White Pass and Yukon Route; Canadian Freightways Ltd.• and Canadian Pacific Airlines.  In order to have the rates on an equal service basis, the air freight includes a charge for pickup and delivery, a minimum of $1.35, or 50jzf per 100 pounds. c  The truck rates to Mayo and Dawson are made up of the Canadian Freightways rate to Whitehorse, plus an additional charge for further shipment by another company. A s ingle air shipment of this size is extremely unlikely due to plane limitations. (Note: a company shipment of 2 crates in the case of air cargo regarded as two shipments.  number of goods ranging from adding machines, carpets, furniture, and refrigerators to sailboats.16 The truck rates can be considered price competitive only to the high level rates of the White Pass and Yukon Route. TABLE XII shows that this competitiveness is strongest for the Vancouver to Watson Lake route.  Except for the full truck-  load (36,000 pounds) rate where trucking is less expensive, the truck rate is on the average about 20$ higher than the high White Pass and Yukon Route rate.  For the Vancouver to  Whitehorse route, though, the truck rate is about £0$ higher than the high level White Pass and Yukon Route rate. ' This rate difference of $0% is continued for Vancouver to Dawson and Mayo routes. The Air Stream rates can be considered price competitive for shipments under 50 pounds.  Shipments of 10 pounds  or less, sent via Air Stream, are even as cheap as, or cheaper than shipments sent along the two other streams.• The Air Stream is thus in an excellent competitive position for small shipments.  For larger shipments the price competitiveness of  the Air Stream decreases greatly.  Depending on the destina-  tion and the shipment size, the Air Stream rate may be from to 250$ higher than corresponding rates on the other streams. A concluding comparison can be made, regarding the cost of transport per transportation stream, when relating the revenue of shipping a ton of goods to the actual miles travelled 16. White Pass and Yukon Route.  ••  -  (TABLE XIII).  2 -  These revenue per ton-mile figures show that the  truck rate, when considered per ton-mile, is almost the same as the White Pass and Yukon Route rate.  This is even though the  latter is based on an 8$0 nautical mile 17 (980 land mile) ocean trip; normally ocean ton-mile costs are considerably lower than truck ton-mile costs. TABLE XIII REVENUE PER TQN-MILE RANGES FOR THE THREE TRANSPORTATION STREAMS TOM VANCOUVER INTO THE YUKON, 196?  Transport Stream  Origin and Destination  Truck  Van.to W.Lake  11+70  $l+.oo- 7.81  5.J+/-10.6/  W.P.& Y.R. Van.to W.Lake  1370  $2.95- 6.30  I+.1+/- 9.2/  Truck  Van.to Whitehors e  1750  $5.15- 8.23  5.9/- 9.1+/  W.P.& Y.R. Van.to Whitehors e  1090  $2.50- 5.50  1+. 6/-10.1/  900  $1S.50-L[.9.00  Air  Distance (in miles)  Van.to W.Lake and Whitehorse  Sourcej  Rate Range  Revenue per ton-mile ranee 1 11 1  1+1.2/-108.9/ '  previous rate tables.  Looking at similar data for the total United States, average revenue per ton-mile of domestic freight for  196J4.  was  1.3/ for rail, 6.5/ for motor carriers, 0.3/ for inland waterways, and 21.7/ for domestic trunk airlines.18  While this is  17. Brown, op. cit., p. J4.. 18. M.D. Dawson, "A, Technique of Air Cargo Market Research " Papers - Sixth Annual.Meeting, Transportation Research Forum ' (Oxford, Indiana: Richard a. Cross Co., 1965), p. 289.  •• -  3 -  not a valid comparison, it does to a small extent provide a frame of reference for comparison.  This is especially so for  southbound ores. The rates for southbound ore concentrates and asbestos fibers, shipped almost exclusively on the White Pass and Yukon Route,, are much lower than northbound general freight rates.  Thus the rate from Whitehorse to Vancouver is $17.00  per ton for ore concentrates and $16.00 per ton for asbestos.19 This comes to about 1.56/ and l.lj.7^ revenue per ton-mile respectively, a fairly low rate when considering the United States ton-mile data above. 3« Service Level per Transport Stream The distribution strategy that makes firms elect certain transportation streams involves more, though, than just the published cost of transport.  A recent survey was conducted  by "Traffic Management" magazine in the U.S. "to determine what  factors led to the selection of a carrier."  20  They concluded  that time in-transit was the most important, followed by on-time performance, shipment tracing and, in fourth place, freight 21 charges.  The final measurement and comparison of freight  services will therefore be concerned with time in-transit for transport to the Yukon. 19. White Pass and Yukon Route. 20. G.C. Watson, "Railways' Big Role in Total PD Concept," Canadian Transportation, April 1967, p. 3i+. 21. Ibid.  - w The advantages that arise to the user of different transport systems due to shorter time in-transit occur mainly in six categories.  These are interest on capital invested in  shipments on route; storage warehousing costs; size of inventories needed; obsolescence; flexibility in adapting to changing marketing demands; and, lastly, better service and greater 22 customer satisfaction. The significance of these factors varies, of course, for the various transport users and the different products transported. The number of days for time in-transit for the three transportation streams from Vancouver into the Yukon is shown in TABLE XIV.  In each case in-transit time is shown to have a  minimum and a maximum number of days.  The minimum is achieved  in the most optimum case when, as in the White Pass and Yukon Route example, perishables are delivered to the ship the day before it sails north. in Whitehorse.  Five days later these start arriving  The maximum time in-transit is arrived at -when  the day furthest from a departure date is chosen as day 1 with the maximum being the last day when a shipment may arrive at its destination. ; The minimum time in-transit for the White Pass and Yukon Route is achieved only with perishables.  Normal ship-  ments to Whitehorse take on the average almost twice as long when the shipment is sent to the ship just before departure time, and may at the most take as long as 28 days. 22. A.D0 Groenewege, "A Key to Profits," Canadian Transportation. Sept. 1966, p. 27. ' ': —  -  u$ -  TABLE XIV TIME IN-TRANSIT POR THE THREE TRANSPORTATION STREAMS PROM VANCOUVER TO YUKON POINTS, 1967  Transportation Stream  Time InTransit  Destination Whitehorse Watson Lake Mayo  White Pass & Yukon  Route:  Trucking:  Air;  Minimum  (days)  5  7  8  Maximum  (days)  29  28  29  Minimum  (days)  Maximum  (days)  9  15  12  Minimum  (days)  1  1  1  Maximum  (days)a  2  2  2  6  Source:  W h i t e Pass and Y u k o n Routej Canadian Freightways Canadian Pacific Airlines.  Maximum  days  for A i r are f o r s u m m e r s c h e d u l e  only.  Ltd;  - 46 While the minimum times in-transit in TABLE XI? are about the same for-, the Trucking and the mite Pass and Yukon Route Streams, a very significant difference exists for the maximum times..  Thus the White Pass and Yukon Route times in-  transit, when compared to the Trucking Stream, may be as much as three times as great to Whitehorse, and twice as great to Watson Lake, Dawson,; and Mayo.  The Watson Lake maximum is  large as only one truck makes the weekly trip from Dawson Greek north to Watson Lake.  In the case that the truck is  completely full -(which is not a common occurrence), a shipment will have to wait until the following week for the next departure. The time in-transit advantage of the Trucking Stream also becomes apparent in another way.  It is thus possible for  almost all Trucking Stream shipments to approach the minimum time in-transit.  For the White Pass and Yukon Route Stream  only perishables can approach this minimum level.  It may be  said that for general shipments, the White Pass and Yukon Route Stream minimum time in-transit is almost twice that of the Trucking Stream. The times in-transit for;the Air Stream are valid for the "summer season" only, that is from April until September. over.  This period includes the spring breakup and fall freezeAt other times of the year, the minimum/maximum times  in-transit for Mayo increase to 2/4 days.  There is thus a  considerable time in-transit improvement for the summer season.  - 1+7 While the Trucking Stream has the competitive edge over the White Pass and Yukon Route Stream for time in-transit, the latter offers better services when temperature controls are an important factor.  The White Pass and Yukon Route thus  is capable of supplying heated and vented containers, as well as cooler and freezer services.  The Trucking Stream can supply  refrigerated trailers only if one customer wants to send a truckload of goods.  An example of this is when truckloads of  meat are sent from Alberta to the Yukon. The measurement of freight services into the Yukon has thus shown the leading role that the White Pass and Yukon Route has.  A prime reason for its dominance seems to be the  generally lower rates compared to the White Pass and Yukon Route Stream.  The Trucking Stream has a time in-transit advan-  tage although its rates are slightly higher.  The Air Stream  is by far the fastest means of shipping to the Yukon, and for shipments under $0 pounds it is also very price compe titive. For larger shipments the cost of shipping by Air Stream is so much more, though, that very few indeed find it advantageous to ship by air.  CHAPTER IV I.  FREIGHT FORECASTING IN GENERAL  Introduction Once the freight services of a country have been measured for a one-year period, this measurement can be used as a basis for forecasting freight for some future period.  It  Is normal to take data for a succession of years, and. to mathematically project this data forward to arrive at a forecast. Very often though, especially for less developed countries, the lack of data collection makes freight forecasting difficult This difficulty may even be compounded by characteristics of the economy itself.  In other cases few difficulties arise and  good forecasts can be achieved from nationally collected data. For Canada it is possible to arrive at excellent correlations between say air freight revenue (goods) ton-miles, or total intercity transport ton-miles, and the Gross National Product economic indicator.  This correlation can then be used  to provide a good freight forecast for at least the next five years. problem.  In other countries a forecast presents a much larger This is not only due to the insufficiency of data,  but also because these countries often have the export side of their economy depend on a few main staple products.  World  market prices for these products may easily experience un-  - 1+8 -  •:  • -1+9 - , •  predictable changes and thereby cause significant increases1 or decreases in exports as well as in the level of freight travel. While these uncertainties do exist, an understanding and forecasting of freight movement, and thus an understanding of the potential deficiencies of the existing transport system, can be of some significance to a country's economy. Thus forecasts may "detect developing trends in industry, and assist firms in predicting business conditions and potential sales."  They may show where new investments are  necessary, or where government pressure is deemed desirable to encourage extension or enlargement of the transportation network in a nationally more optimum direction.  Forecasts may  also give encouragement to possible rate adjustments. A freight forecast, especially a national one, should always be looked at with caution.  While It may in total pre-  sent a relatively accurate forecast, it may on the other hand hide important internal variations.  While estimates of total  traffic demand may thus provide a rough measure of future transport requirements, they must be supplemented by studies of the transport system as a whole, along with detailed analyses of planned industrial projects and a consideration of. other planned developments.  2  To arrive at specific physical requirements for transport and to determine financial needs, it is essential to 1. Eldon, "Transportation Statistics," Royal Commission on Transportation Vol. 3 (Ottawa: Queen's Printer and Controller of Stationery, 1962), p. 1+11. 2. Wilfred. Owen, Strategy for Mobility, Transport Research Program, (Washington, D.C.: The Brookings Institution, 1961+), P- 52.  - 5o -  j  depart from total estimates of freight and build these estimates from the ground up. Such a build-up is based on a knowledge of the "existing regional transport plant" and its current utilization, as well as an estimate of the additional transport demands resulting from "regional economic and social goals." A case in point is Owen's example of India's Second Plan.11" The provision of sufficient railway facilities was to a large extent based on a forecast of rail freight. While the forecast was quite accurate, shortages still developed because of the uneven distribution of the traffic burden. Overall figures concealed actual conditions of transport supply and demand for specific routes. Failure to determine new plant locations and to estimate important geographic factors in advance meant that traffic flows could not be anticipated. The result was that serious congestion developed in certain parts of the rail system. Techniques for Forecasting For the development of a freight forecast itself, several general approaches are availableJ 5 (1) a freehand line of trend drawn through the annual data for total freight in ton-miles and extrapolated forward for x number of years j 3. Ibid. I).. Ibid., p. 66. 5. J.D. Murphy, Airline Passenger Forecasts and Forecasting Methodology (unpublished Master's thesis, The University of British Columbia, Vancouver, 1965).  - 5i j  _  -  (2) a least-squares trend line fitted mathematically to f o r w a r d t 0 t a l f r e i S h t i n ton-miles, and carried (3) a correlation of total freight ton-miles with an economic indicator such as gross national product or disposaole income connecting future freight increases with rises m the national economy; (k) marketing surveys; * t f t V m i n & t i ° n o f " M o t o r s that cause freight move? o " e b ? a S o r s ? e r t a i n lQVelj eights The first two approaches might provide an adequate forecast for a developed economy (along with minor adjustment due to consideration of the other four approaches).  Por a  developing economy though, due to the lack of data as well as the significance of a few primary industries, a forecast would have to revolve around the fifth approach.  Thus a later fore-  cast example will show how even though past figures may be available for a trend projection into the near future, a substantial deviation from these projected figures may result due to the change in magnitude of some determining factors. "The heart of the forecasting problem.then is really three problems;  first, to identify the factors which determine  the future level of freight; secondly, to develop weights to be assigned to each of the causal factors; and. thirdly, to decide upon the most likely future magnitude of the determining factors."6  -  Aeronautics Board, Forecasts of Passenger Traffic  Service, 196b-75, (Washington, P.O.: . Hesearch and Statistics" Division, Bureau of Accounts and Statistics, 1965).  - 52 J  .  Examples of Forecasts It may be desirable at this stage to look at several sample forecasts, showing an application of the above approaches, after which the Yukon will be used as a case study for freight forecasting in a developing region. A United Nations study on the Economic development in 7 Colombia  also includes an analysis of the 1953 state of the  transportation system, as well as a 10 year forecast for passenger and freight traffic.  Taking figures from 1925 to  1953, the study uses a logarithmic scale to show the relationship that exists between the gross product generated by freight and the annual quantum of agricultural, industrial and mining production, of building activities, and of imports and exports of goods. This relationship is then quantified, so that "every 1-per-cent increment in the value (at constant prices) of production, building activities and foreign trade in goods was linked to a 1.7-per-cent increment in the gross product gen-  „ 8  erated by freight".  -  This relationship (designated as an  elasticity coefficient "for convenience sake") is then used as a criterion on which growth estimates of gross product of transport can be based.  The study also assumes that there  will be some lowering of transport costs (due to improvement of transport facilities) and thus arbitrarily sets the ratio, 7* United Nations, Department of Economic and Social Affairs, Analysis and Projections of Economic Development, III The Economic Development of Colombia (Geneva: United Nations Publications, 1957). 8. Ibid., p. 371  - 53 j  and thus the elasticity coefficient, to be only l.Ij.. ' Having already decided, through an anlysis of present and future prospects, on two possible rates of growth for the production, construction and trade industries,9 the study then combines these figures to arrive at a forecast for the gross product generated in the transport sector (TABLE XV). TABLE XV COLOMBIA: PRODUCTIONS OP GROSS PRODUCT GENERATED IN FREIGHT TRANSPORT, 1953-65 10 1965  1953  Hypothesis A  Rate of Growth of production, construction and trade . . . .  —  6.5  1+.9  Elasticity-coefficient of transport . . . .  1.7  l.Ij.  l.Ij.  Rate of Growth of gross product from transport  —  9.0  7.0  Gross product  336  960  . . . .  -  Hypothesis B  755  Millions of pesos at 1950 prices. In addition to the total freight correlation and freight forecast the Colombia study also establishes correlations between individual transport modes and economic indicators.  More than likely, a forecast per mode is of more value  for the formation of government transport policy and for private agencies than a total freight forecast.  In some cases,  9.The Study has a more optimistic annual growth rate of 6.$% and a less optimistic one of l±m9%. 10. United Nations, Department of Economic and Social Affairs, op. cit., p. 372.  -  5k -  though, it may be possible that both, correlations and resulting forecasts, are of little value due to concealment of valuable regional data. The Colombia freight forecast is an excellent example of how a causal relationship can be established between an economic indicator, (in this case production, construction, and trade), and a freight transport indicator (in this case the product generated by freight transport, in peso currency), and how this, correlation along with an estimation of the probable growth rate of the economic indicator can be used to establish a freight forecast.  A necessary prerequisite was of course  the availability of data.  The following example uses ton-,  miles to establish a similar.relationship. A recent unpublished paper on the correlation of economic indicators with revenue (goods) ton-miles for Canadian domestic air freight found an extremely high correlation for  11 various indicators.  Thus the correlation factor between the  Canadian Gross National Product at 19)4.9 prices and the domestic revenue ton-miles was found to be a high .9865 (TABLE XVI). A similarly good, correlation was found between the annual wholesale trade in Canada and domestic revenue (goods) ton-miles. Both correlations suggest of course that increases for economic indicators will to a very high degree be the explanation for 11, I.L. Proctor, "The Correlation of Economic Indicators with Canadian Domestic,.Revenue (Goods) Ton-Miles" (unpublished paper, The University of British Columbia, 1967). .  - 55 -  table XVI CORRELATION OP G.N.P. AT CONSTANT (194-9 DOLLAR) PRICES WITH CANADIAN DOMESTIC REVENUE (GOODS) TON-MILES  Year  1958 1959 1960 1961 1962 1963 J 1965  In millions^ Revenue Ton-Miles (Millions)  2k,397 25,22+2 25 8^9 26 515 28 275 29 7kD 31,663. 33,770  26.0 29.2 31 5 3k k 39 1 pis" J 2 .0 61+. 3  Correlation factor I4. = .9865  Sourcet  I.L. Proctor, "The Correlation of Economic Indicators with Canadian Domestic.Revenue (Goods) Ton-Miles" (unpublished paper, The University of British Columbia, 1967), Appendix, p. 2.  - 56 similar percentage increases in air freight ton-miles.12 When looking at the total Canadian freight system, and the ton-miles performed per mode, the correlation to the Gross National Product (at 191+9 Dollar prices) is also very good.  For the set of data shown in TABLE B-I in Appendix B,  the correlation was found to be .9726.  It should be noted  though that while this correlation with the G.N.P. would provide a good basis for a total ton-miles forecast, it is not implied that the total ton-miles forecast arrived at will be used without careful evaluation. If a value can be established, then a freight forecast for a developed economy can be obtained by using the correlation with economic indicators such as the G.N.P. as a basis.  This basis could then be enlarged upon by a graphic  trend analysis. A graph plotting G.N.P. at 1949 Dollar prices against time and. total ton-miles against time would show that ton-miles were experiencing larger increases in the last two years. This may be a. significant change which is hot apparent when looking only at the correlation.  The freight forecast there-  fore should incorporate this new trend as well. For a developing economy such as the Yukon, a past history approach to forecasting, even if complete data on economic indicators were available, would not be too valuable. 12. It should be noted here that while the correlation for the 11 years is very high, the increase in ton-miles for 1961l and 1965 is rather large. Thus if the G.^.P. and air tonmiles correlation were used as a basis for an air freight forecast this factor, which may be partially due to lower rates, should be given additional weighting.  - 57 A.correlation would not present a proper account of the impact of present exploration and development activities. A company forecast by Canadian Pacific Airlines for air freight into the Yukon substantiates how a historical trend analysis, if used as the only basis for forecasting, can provide a very misleading picture.  A trend line fitted to the  196J+ to 1957 yearly data would suggest freight increases averaging about 10$. per annum for the 1968 to 1972 period.  The  actual forecast by C.P.A. for 1969 and the following three .. ^ 13 years predicts yearly increases of 29%. It may therefore be assumed that the forecast incorporates an outside factor which will influence the freight level, but which cannot be found from historical data.  Most probably this outside factor is  the introduction of Boeing 737 jet planes on British ColumbiaYukon routes, as well as possibly a decrease in certain freight rates.  There is also the possibility that this forecast is  overly optimistic. The final forecast example that will be looked at here is the Alaska Highway paving study.^  One of its objec-  tives is to forecast the amount of traffic that will exist on different sections of the highway in the next twenty years. As the unit of measurement for truck traffic is the number of commercial trucks using only the Alaska Highway itself, the 13. Canadian Pacific Airline company sources. li|. Stanford Research Institute, Improvement Program for the Alaska Highway. Prepared for the Department of Northern Affairs and National Resources (Ottawa: Queen's Printer and Controller of Stationery, 1966).  - 58 results are of limited significance for a forecast of freight in the total Yukon economy. The study suggests that truck traffic from Southern B.C. and Alberta to Watson Lake and Whitehorse will experience an annual growth rate of 5 per cent.15  While this represents  only changes in yearly truck vehicle-miles, It does at least to some extent suggest what actual tonnage increases may be. The study also expects an annual growth rate of 6$ for the section from Whitehorse to Dawson and Mayo, while only 2$ growth rates are forecast for traffic between a) Port St. John and Watson Lake, and b) Watson Lake and Whitehorse.16 While the Stanford Research Institute made an estimation, through questionnaires and actual field sampling, of truck traffic for 1961+, it arrived at its forecast figures mainly through an evaluation of the effect which various factors might have on the growth of the economy and thus the growth of truck traffic.  The Yukon being a resources-oriented  economy, the main factor is of course min&ral and petroleum exploration and development. Concluding then, a freight forecast should have two major considerations.  First, a general economic indica-  tor such as Gross National Product, along with an indicator of the yearly transport product will, if available, be of variable value as a basis for prediction.  Secondly, a detailed  surveillance of explorational and developmental changes in resource and secondary industries Is necessary, as complement 15. Ibid.. p. VI-16. 16. Ibid.  - 59 to include the impact of planned activities on the transportation industry.  While more difficult, it may also be desirable  to find out if market price and demand fluctuations for these resources may have much effect on transportation requirements for these industries.17 II.  CASE STUDY ON THE YUKON  1. Problems and Considerations There are two basic difficulties that prevent a sophisticated approach to a forecast of freight in the Yukon economy.  Not only is there a critical lack of past data for  the region.  (An economic indicators are published together  with those of the Northwest Territories or with British Columbia, and not for the Yukon alone).  There are also at present  developmental changes occurring that will substantially alter the Yukon's economy.  Thus, in a recent paper given at the  1967 Alaska Centennial Conference, Mr. C. j. Brown said that while recent mineral output in the Yukon has been about $12 million, this should rise to about $30 million by 1970, and could exceed $50 million by 1975.18 Due to the present surge of development activity, the correlation technique, based on the relation between freight and time, is of little help.  One could for example  compare the total northbound freight of the White Pass and 17. For the Yukon, an example of this is tungsten. When the price of tungsten dropped in 1963, Canada Tungsten on the Yukon-Northwest Territories border closed down its operations for part of the year. 18. Brown, ibid., p. 5«  - 60 Yukon Railway with the Canadian Gross National Product (TABLE B-II, Appendix B).  The correlation coefficient is r = .8368,  which seems reasonably good.  A graphic representation of this  data would suggest that for every lper cent Increase in the G.N.P., there would be a 2 per cent increase in the tons of freight transported.  Assuming that the G.N. P. continues grow-  ing at the level of the past 5 years, it shouM increase from the estimated 1967 level of $37.2 billion (191+9 dollars) to $51.6 billion by 1975 (yearly increments of $1.8 billion).  This  39$ increase in G.N.P.WOuld mean a 78$ increase during the same period for northbound freight through the relationship established above.  This in turn would mean approximately a 7.5$  yearly increase, which is an.unrealistically high conclusion not recognizing what has actually occurred in the Yukon in recent years. It does not account for the fact that there was almost no change in the level of W.P. and Y.R. freight for the four years up to 1965.  The level of freight then increased by about  50$ by 1967, mainly due to the construction for Cassiar Asbestos at Clinton Creek, for the New Imperial Mine near Whitehorse, for Anvil Mines at Ross River and for several small operations. On the basis of this historical analysis it is not possible to assume that mining operations will continue to keep growing at this high rate. The technique used to establish a freight forecast will therefore be based not on a correlation with economic indicators, but on a sector analysis.  The northbound freight will be based  - 61 " on the different transportation streams that exist, namely (a) the White Pass and Yukon Route Stream (with ship from Vancouver to Skagway, by railway from Skagway to Whitehorse, and by truck to various points in the Yukon); (b) the Trucking Stream (from various Alberta and British Columbia points (including Dawson Creek, which is the end terminal for the Pacific Great Eastern railway from Vancouver) to the Yukon); and (c) the Air Stream (from Vancouver, Edmonton, and intermediate points via Canadian Pacific Airlines to the Yukon). For southbound freight, which consists mainly of ore concentrates and other mineral products, the analysis looks mainly at the users of the above streams, that is,the presently existing and the planned mining developments in the Yukon area. To achieve the forecast, the 1964 freight measurement of the previous chapter was updated through mining and transportation company sources to obtain a measurement for 19 the year 1967. The time period used for the forecast is 20 1967 to 1975.  Beyond this point there are just too many  uncertainties. 19. As much of the tonnage information received was of a confidential nature, it was necessary to base the forecast on an index system. The pertinent growth information is still apparent.' 20. 197il- is the year that all the presently considered serious mining developments should-with some certainty have been brought into the production stage, so that by 1975 a reasonable stability should have returned to the economy.  Wit]a  respect to annual growth.pates, several assump-  tions were made.  The Stanford Research Institute rate of $%  for vehicle-miles growth 21 ( which  rerers to  traffic between the  Yukon and Canadian regions other than Canadian Alaska Highway communities) was" adopted for the growth In general freight 22  truck traffic, both north and southbound.  Lj.0% of the north-  bound truck freight and 36% of the northbound W.P. & Y.R. freight were fuel, oil and gas, and again a 5% annual growth rate was used.  The 1967 level of northbound general freight on the  W.P. and Y.R. Stream was felt to be very high (as it was about 50% more than In 1961+).- For that reason the traffic was broken down into that:going to Whitehorse, and that going on further to Watson Lake area, Dawson-and Mayo area, and New Central Yukon area.  Parenthetically, the New Central Yukon area is  situated north and northeast of Whitehorse, and is meant to include all those mining developments that are presently being opened up; it includes, among others, Anvil Mines, New Imperial Mines, and Cassiar Asbestos Clinton Creek, but not the established towns of Dawson and Mayo which are in the same area. The different W.P. and Y.R. freight destinations are looked at separately in determining freight growth rates.  A  21. Stanford Research Institute, og_. cit., p. vi-16. 22. While the Stanford study on the one hand does not incorporate the extraordinary mining activities in the late sixties (especially the Anvil Mines development),, there was on the other hand the recent decrease in Yukon population. I-t thus seems that a growth rate is the most realistic one before better economic figures are available.  - 63 ~ Wo growth rate is assumed for Whitehorse, while the Dawson and Mayo rate is assumed to be a little lower, and the Watson Lake area (including Cassiar, B.C.) should have a low growth ^  rate of about 2$.  22  No rate, however, can be assumed for the  growth of the New Central Yukon area.  Rather, all develop-  ments are considered separately and, mainly through company estimates, an estimate is made for their future general freight volumes. Finally, the previously mentioned Canadian Pacific Airlines company forecast growth rate of 29$ per annum for 1968 to 1972 was adopted for airfreight, while a slightly lower rate of 20$ was chosen for the last years up to 1975. 2. The Actual Freight Forecast TABLE XVII then shows the results for the forecast of freight, including general freight and petroleum products, into and out of the Yukon.  While an index comparison is used  for northbound and southbound freight, it" may be pointed out that the total northbound freight tonnage is roughly twentytwo times as large as the southbound tonnage. The forecast growth of general freight, averaged over the forecast period, represents approximately a yearly increase for northbound and southbound directions.  The  most significant tonnage change will of course occur in the shipment of ore concentrates and asbestos fiber out of the Yukon.  A large number of mining developments are either  presently taking place or are being seriously considered for 23. Ibid.  - 61+ -  TABLE XVII YUKON: PROJECTION OP FREIGHT& 1967-1975  Northbound Into Yukon (a) W.P.& Y.R.Stream b  (b) Truck Stream  Percent of Total Tons 1967 1976  Index Value 1967 1975  68.5$  68.3$  68.5  102.5  31.1  30.1+  31.1  1+5.6  3  (c) Air Stream*  . J+  1.3  Growth Index  100.0$  100.0$  100  150  100  1.9 a5o  Southbound out of Yukon (a) W.P. & Y.R. Stream 3  (b) Truck Stream* . (c) Air Stream  Growth Index  Source: £  21+. 0$  22.3$  21+.0  33.7  73.5  70.1  73.5  105.8  2.5  7.6  2.5  11.5  100.0$  100.0$  100  151  100  151  Mining and transportation companies, and previously mentioned assumptions.  Includes northbound fuel oil and gas, and general freight but excludes mineral concentrates. '  brs  Does not include small private truck operators (one truck less than 10 tons), nor unscheduled and private aircraft operations.  - 65 ,,  .  2i\.  period in question.  Through  company Information and  other sources a picture of prospective yearly tonnages was obtained (TABLE XVIII).  Parenthetically, effects of. the  mineral developments on such areas as level of employment and size of the economic base will be looked at in the next chapter. TABLE XVIII PROJECTION OP CONCENTRATES LEAVING THE YUKON ALONG EACH TRANSPORT STREAM, 1967-1975  Percentage of Total Tons 1967 1975 W.P. and Y.R. Stream  93.5$  '•98.2$  93.5  604  1.8$  7.5  11  100.0$  100.0^  100.0  615  100  615  Truck Stream  Growth Index Source:  Index Value 1967 1975  Various mining company sources.  The total tonnage represents all the concentrates that leave the Yukon, with the main destinations being Japan and Vancouver, B.C.  It was assumed that the small tonnage of  asbestos going south through Watson Lake would not experience any significant change.  The shipment of tungsten from Tungsten  in the Northwest Territories, which takes the same route south 24. The companies included were Cassiar Asbestos at Clinton Creek and at Cassiar, United Keno Hill Mines Ltd., New Imperial Mines Ltd., Anvil Mining Corporation, Arctic Mining and Exploration Ltd., Mt. Nansen Mines Ltd., Venus Mines Ltd. Pure Silver Kerr Addison Mines Ltd., and Vangorda Mines Ltd. '  - 66 through. -Watson Lake, was very small in 1967 due to a fire in the company's operations.  This is expected to go back to its  normal capacity, resulting in tonnages between 5500 and 6000 4-  ^  tons.  All other concentrate shipments will travel along the  W.P. and Y.R. Stream. The Increase in the growth index represents approximately a 26% yearly increase, although this increase is by no means spread evely over the 8 year period.  The biggest increase  will be when Anvil Mining Corporation goes into full jr eduction somewhere around 1969, as it will have an approximate- capacity of 370,000 tons  of copper concentrate annually.27  A comparison of the tonnage figures inherent in both TABLE XVIII and TABLE XIX shows that in 1967 for every ton shipped into the Yukon, about Yukon.  tons were shipped out of the  This ratio shifts significantly 50 that in 1975 6|  tons are shipped out of the Yukon for every ton being shipped in.  It is, understandably, the ratio of a resource-based  economy.  The increase in mineral exports is largely due to  finding of high value copper ore bodies and to'the demand for copper concentrates by Japan industries.  Until now the minerals  exported out of the Yukon were primarily asbestos, silver, gold, lead and zinc, involving relatively low tonnages with fairly high value. 25. Canada Tungsten Company. 26. Brown, loc. cit. 27. Some of the other major producers are Cassiar Asbestos (Cassiar) - 80,000 tons; Cassiar Asbestos (Clinton Creek) 60,000 to 80,000 tons; Few Imperial Mines - 30,000 tons Source: Ibid.  - 67 -  Finally, it must be noted that the above forecast is made on the assumption that present demand and supply situations for these resources in the world maris t do not experience adverse changes.  This is always a possibility, and again under-  lines the difficulty that exists in forecasting freight in a developing economy, especially of course if the economy is very dependent on the export of raw materials.  CHAPTER V FORECAST A forecast  IMPLICATIONS  of freight  tonnages m o v i n g  into and  of a r e g i o n a l a r e a m a y p r o v i d e m u c h s i g n i f i c a n t d a t a . a regional forecast,  though,  through aggregation. some m o r e forecast  detailed and  Thus it w i l l b e w o r t h w h i l e  i n a large  They w i l l also g r e a t l y area d i r e c t l y ,  and  increase  increase  it m a y be of i n t e r e s t  and A n v i l M i n i n g 900 p e o p l e . 1  n u m b e r of p e o p l e Additionally increase  in m i n e r a l  and  Yukon  This  as a r e s u l t  of  to g i v e that  the  in the  quantitative prospective New  is e x p e c t e d  Imperial to  about o n e - s e v e n t h of  in all of the Y u k o n for a greater  mining  industries  ( C l i n t o n Greek),  is a l r e a d y  employed  production.  service  C o r p o r a t i o n alone  there should be  More  the  at  i n the Y u k o n w i l l  the l a b o u r f o r c e  in the s e c o n d a r y  employment for Cassiar Asbestos  about  of  hidden  implications.  developments  W h i l e it is n o t p o s s i b l e  illustrations,  to l o o k  in  Base  The planned mining  Mines,  aspects  to c o n s i d e r their p o s s i b l e  not only result  Even  information may be  direct and i n d i r e c t  1. Size of E c o n o m i c  indirectly.  valuable  out  indirect  total the  196l.  population  activities.  indirectly,  there w i l l be I n c r e a s e d  1. Respective company information. -  68  -  demand  for  - 69 local forest products and for services provided by local industries and retail operations.  It is presently also being  considered whether coal deposits near Carmacks should be utilized to provide fuel for the Anvil Mining Corporation operations.  Involved are 30,000 tons of coal annually,2 pro-  viding further stimulus to the Yukon economy.  If fuel oil  is used instead, lesser benefits would result (assuming the cost is about the same for both) as it would be imported from outside the Yukon. The total effect of the new operations will be that the primary, secondary, and service industries will all experience a considerable boost in size, thereby increasing the size of the Yukon economic, base.  This, in turn, can enable  a better realization of economies of scale in many areas of the economy, such as lower cost of local production through greater volume, and lower cost of transportation through certainty of greater volume. For the Air Stream, more traffic would support the replacement of piston aircraft by bigger and much more efficient jet planes.  This change would not only reduce flying time by  half, but would also lower direct operating costs by more than half.  The cost, for example,3 of moving cargo in the piston-  powered DC-7 plane is 10.06pf per available ton-mile while that  2. Bill Fletcher, "White Pass Sets Record," The Vancouver Sun. April 2, 1968,-p. 26. — ; 3. The example is not meant to apply to the Yukon; the figures quoted are for all-cargo planes.  - 70 for the DC-8F Jet plane is only 3.61]/ per ton-mile.^ For the present there does not seem to be enough traffic potential to warrant the use of all-cargo jet planes. While Canadian Pacific Airlines is planning to switch from Douglas DO'-6B piston planes to Boeing 737-100 jets, it is being done primarily due to passenger considerations.  Cost efficien-  cies will benefit freight operations as well, though. 2. Geographic Areas of Influence  •  A more specific aspect of the increase in mining operations involves the areas of the Yukon where the three transportation streams are most influential in terms of percentage of traffic carried. When considering all the general freight that was shipped to the Yukon during 196I4. per transport stream, the Trucking Stream had about 60$ of Its volume going to the Whitehorse area and \0% going to the Watson Lake area.  The W.P.  and Y.R. Stream had about 72$ of its volume going to Whitehorse, 8% to Watson Lake, and 20$ to the Central Yukon^ area. The Air Stream experienced about 73$ of its volume travelling to the Whitehorse area, 18$ to the Watson Lake area, and the balance to the Central Yukon area.^ Stanley H. Brewer and D.T. Coster, The Nature of Air Cargo Costs (Seattle, Wash.: The University of Washington), " 1967, p. vi. 5.This includes all the points north and northeast of Whitehorse, in contrast to the previously mentioned "New Central Yukon area" that excluded Dawson and Mayo. 6. Transportation companies.  - 71 -  By 1967 this distribution pattern had already experienced a considerable change.  While the Trucking and Air  Stream distributions remained quite stable, a substantial shift occurred for the W.P. and Y.R. Stream.  Having exper-  ienced a $0% increase in general freight volume during this three year period, it reduced the percentage of shipments to the Whitehorse area to 55% of total general freight, whilethose to the Watson Lake area stayed at 8%, and those to the Central Yukon area increased to 37%.7 For the period until 1975 these volume distributions to the three Yukon area destinations should remain at approximately the same level.  The only change should be an even  further increase in the amount of W.P. and Y.R. volume going to the Central Yukon area.  This should increase to aboutj+0%  of its total volume, with the Whitehorse area portion decreasing to about 53% and the Watson Lake area portion to about 7%. The increase in the Central Yukon area shipments underlines the benefit that the W.p. and Y.R. -Stream should receive from the mining operations boom. When considering all the general freight that was shipped to each Yukon area, it is found that for 1967 the Watson Lake area received about one-third of its general freight from the W.P. and Y.R. Stream, and about two-thirds from the Trucking Stream.  The Whitehorse area received two-  thirds of its general freight from the W.P. and Y.R. Stream, and one-third from the Trucking Stream.8  The Central Yukon  7. White Pass and Yukon Route. 8. White Pass and Yukon Routej trucking companies.  -  7  2  -  area however got almost all of Its general freight via the W.P. and I.E. Stream.  These distributions per Yukon area should  remain about the same for 1967, although a relatively major change should occur for the Air Stream. It is the annual 29$ increase in air freight that should make itself felt in air stream shipments to Yukon areas. Thus while both the Watson Lake and Whitehorse areas received about .6$ of their general freight via air in 1967, this proportion should increase to about 2.5$ by 1975.^ The Central Yukon area receives a large percentage of air shipments via Whitehorse, and a substantial increase in air freight does not seera possible. The most decisive- change in geographic influence concerns the export of ore concentrates.  During 1961}., with  the W.P. and Y.R. Stream transporting 90$ of the outbound concentrates, 6btfo came from the Watson Lake area (actually Cassiar, B.C., which Is included in the Watson Lake area) and only 36$ came from the Central Yukon area. 10  All of the Truck-  ing Stream concentrates came from the Watson Lake area. By 1967, with the W.P. and Y.R. Stream carrying 92.5$ of the outbound concentrates, even more came from the Watson Lake area.  Thus almost 70$ came from this area while only  30$ came from the Central Yukon area.  11  9. Various transport companies. 10. White Pass and Yukon Route; mining and trucking companies. 11. Ibid.  - 73 With almost all of the new mining operations occurring north and northeast of Whitehorse in the Central Yukon area, a substantial shift should take place by 1975.  While the  absolute tonnage level of concentrates should increase about six-fold between 1967 and 1975, the portion carried by the W.P. and Y.R. Stream should increase to about 98.2$ of total volume.  Of this, about 90$ should originate in the Central  Yukon area, with the balance coming from the Watson'Lake area. The changes occurring in geographic Influence per transport stream then are concentrated mainly on two fronts: the Air Stream should increase its influence in the Whitehorse and Watson Lake areas, while the W.P.  and  Y.R. Stream should  expect the Central Yukon area to play a greatly increased role in its. operations.  Thus a larger share of W.P. and Y.R. Stream  general freight should have their .destination in the Central Yukon area, and a significantly large portion of-southbound concentrates (98$ of which travel on the W.P. and Y.R. Stream) should come from the Central Yukon area. 3. Product Groups per Transport Stream Another aspect raised by the change in the level of mining operations concerns the volume of each product group that was carried by the three transport streams. Parenthetically, the product groups include only general freight and petroleum products for northbound traffic, and general freight and mineral concentrates for southbound traffic. The White Pass and Yukon Route Stream in general is 23. Ibid.  -  5k  -  the principal carrier of product groups into and out of the Yukon.  TABLE XIX shows its dominant position in every group,  except southbound general freight, for 1961+ and 1967, and what it should be in 1975.  It also shows that between 1961+ ard  19.67 the W.p. and Y.R. Stream improved its position in all 13 groups except southbound general freight. The percentage distribution should remain at about this level for 1975, although the purchase.of coal for Anvil Mines from the nearby Carmacks area should decrease somewhat the W.P. and Y.R. fuel percentage. When considering the total volume of freight transported into the Yukon, petroleum products are Increasing less rapidly than general freight products.. During 1961+, while general freight accounted for 58$ (39,580 tons) of total volume, petroleum tonnage was 1+2$ (28,220 tons). By 1967 petroleum aoaounted for only 38$ of total volume, and should decrease to 37$, if not further, by 1975. A comparison of product group percentages for 1967 and 1975 (TABLE XIX) Indicates that there is generally only little variation between the years.  This is primarily due to  the earlier assumption that freight growth in most areas would be 5$ per annum.  The same assumption is also reflected In the  similarity of growth indexes.  Thus the increase in the growth  rate at the 5$ rate, over an eight-year period, should theo13. T 0 provide an approximate significance level, total southbound general freight for 1975 is about 1$ of southbound ore tonnage. Southbound tonnage should be about 6 times northbound tonnage for 1975.  - 75 -  TABLE XIX YUKON: DISTRIBUTION OP PRODUCT GROUPS AMONG TRANSPORT STREAMS, 1961+-1975  Product Groups  Transport Stream  Percentage of Total Tons* 19 61+ 1967 1975  W.P.& Y.R. Truck Air  63.0$ 36.5 .5  Northbound: (a) General Freight  100.0 Growth Index (b) Petroleum  W.P.& Y.R. Truck  58.5^ it-i.5 100.0  Growth Index  70.0$  29.5 .j,  70.0%  28.0  2.0  100.0  100.0  100  152  66.0%  100.0  66.0$  100.0  100  Southbound: (a) General Freight  W.P. & Y.R, Truck Air  kl.O/o  W.P. & Y.R. Truck  Growth Index  Source: a  23.0$ 70.0  73.5 2.5  100.0  100.0  100.0  100  151+  2.0 -  Growth Index (b) Ores  21+. Of  57.0  89.5$  10.5 100.0  93.5^ 7.5  -It£  98.0$ 2.0  100.0  100.0  100  615  Previous tables; transportation companies.  To the nearest half percent; may not add due to rounding  - 76 retically be from 100 to 11+7 • The index for all groups except ores actually is very close to the .11+7 level. The initial impact, though, of the mining operations boom has already occurred in 1967, providing thus a good indication of the impact.effect. Besides the large increase in ore tonnage, one other large change is the Air Stream transport of general freight. „ The 1975 volume, of northbound, air freight is thus four times the 1967 level, with the southbound freight increasing almost as much.  The absolute level of 2% is still small compared to  the other streams, even though the southbound freight percentage of 1.5% is quite large.  This growth,in general, seems  to be more a realization of potential that has existed for airfreight for some time, rather than a growth which is mainly due to the mining operations boom. 1+. Level of Competition A final consideration of the more detailed aspects of the Yukon forecast involves the general level of competition among the transport streams, with the two focal points being price and service competition. It has thus been indicated that the W.P. and Y.R. rates for 1967 are lower than the rates on the other two streams, but usually not very much lower.  The comparison of  revenue per ton-mile (Chapter IV) indicates that the W.P. and Y.R. rates, per ton-mile, are actually about the same as the Trucking Stream rates,. While its rates for southbound ores are low, and this is important to keep Yukon export prices  - 78 competitive,- the rates for northbound general freight seem to be made according to what the traffic will bear.  The one  consideration is to be less expensive than the Trucking Stream.  This consideration seems to provide the main reason  why the W.P. and Y.R., in 1967, transported about of all , lk the general freight going from Vancouver to the Yukon. The ton-mile cost comparison referred to above seems to infer that it should be possible for the W.P. and Y.R. to offer lower general freight rates, especially now that its ' volume of freight carried has experienced such a substantial increase due to the first impact of the present mining opera15 tions boom.  Their profits for 1967 were certainly much  higher, making the possibility of a rate decrease not unrealistic.  Thus, on an 11$ higher gross revenue for the White  Pass and Yukon Corporation Ltd. for 1967 over 1966, the company increased its net profits from 6.7$ of gross revenue to 8.1+$.16 The Trucking Stream could be more price competitive than the W.P. and Y.R. Stream if carload trailers of about 20 tons were piggybacked from Vancouver to Dawson Creek by train, and trucked from there to the Yukon.  While this piggyback  service is available now, its rate of $3.i|i{/c.w. t. to Whitehorse is only slightly below the present Trucking Stream rate. Because much lower costs are involved concerning handling and 11+. Transportation companies; previous tables. 15. The W.P. and Y.R. did have an approximate 6$ decrease In general freight rates, as well as a lower rate for concentrates, in 1966. 16. Fletcher, ibid.  _  79  -  loading activities, it should be possible to offer piggybacking at a rate of about 5/ per ton-mile rather than the present 17 7-5/ per ton-mile. The piggyback rate per trailer to Dawson Creek is about fl+OO, which comes to about 2.1)./ per ton-mile.  If then  a trucking rate of 5/ per ton-mile is used for the remaining 635 miles to ¥atson Lake, an overall rate of 3.5/ per ton-mile, or about $2. 60 per c.w.t. would be achieved.  This is con-  siderably less than the W.P. and Y.R. Stream rate to Watson Lake, which'ranges between $2.95 and $]+.25 per c.w.t., for carloads of 36,000 pounds, and much less than the l8normal Trucking Stream rate of $L(..00 per c.w.t. for carloads. A result not quite as favourable is achieved for Whitehorse itself.  With the same conditions as above, an  overall rate of 3«8/ per ton-mile would be achieved for piggyback trucking, or about $3.30 per c.w.t.  This does not com-  pare quite as well with the W.P. and Y.R. range of $2.50 to $3.80 per c.w.t., although it is much lower than the normal Trucking rate of $5*l5 per c.w.t. While this theoretical case again suggests that the W.P, and Y.R. freight rates are a little high, the question arises what is of more benefit to the W.P. and Y.R. and to the 17. The low rate for trucking In TABLE IV was i+,6/ for loads of 18 tons. The rate of 5^ per ton-mile is thus only a hypothetical case. The actual rate of the trucking company presently offering this service is 3.I^/c.w.t. from Dawson Creek to Whitehorse (920 miles), or 7*5/ per ton-mile. 18. TABLE XVII. 19o These rates apply only for the Dawson Creek to Whitehorse stretch.  - 80 Y u k o n e c o n o m y as a w h o l e :  to l o w e r r a t e s f o r n o r t h b o u n d  f r e i g h t , o r to h a v e the lowest p o s s i b l e  rates, w h e r e  are b a r e l y covered,  This is of c o u r s e  for o u t b o u n d  ores.  c o m p l i c a t e d s i t u a t i o n w h i c h cannot b e h i g h e r p r o f i t level, northbound boom,  as w e l l  and s o u t h b o u n d  easily a n s w e r e d .  as the p r o m i s e o f s t i l l  volume d u e to the m i n i n g  Stream rates appear  p o t e n t i a l for f u r t h e r r a t e d e c r e a s e s .  The  the P . G . E . t r a i n p i g g y b a c k s e r v i c e  as D a w s o n C r e e k .  If c o m p a n i e s  possible. companies Corp.,  in V a n c o u v e r ,  This n o r m a l l y w o u l d  not b e done b y  much  to  as f a r  consolidate  large  any b e n e f i t s  is  mining  empty f r o m  This u t i l i z a t i o n of e m p t y b a c k h a u l  e a s i l y offset  of  or the N e w A n v i l M i n i n g  as they a l r e a d y h a v e trucks r e t u r n i n g  normally  possible.  a very l o w t r a n s p o r t r a t e  s u c h as U n i t e d K e n o Hill,  h o r s e to the m i n e .  more  choice exists  course to u t i l i z e  their s h i p m e n t s  The  to h a v e n o t  c a n thus m a n a g e  a  operations  should make some combination of rate decrease The T r u c k i n g  costs  that m i g h t  accrue  Whitewould  from  piggybacking.  With the upcoming change-over to jet planes, it does appear that there may be a decrease in at least some specific commodity rates for the Air Stream.  Until the  effect of the Boeing 737 jet plane on the lowering of costs can be assessed, it will be difficult to reach more concrete conclusions.  The Air Stream will always be considerably more  expensive than the other two streams, with its main advantage of course being its short time in-transit. As mentioned before,  time i n - t r a n s i t  is the m a i n  - 8l factor to consider when looking at service competition.  In  •this regard, the W.P. and Y.R. Stream will always have one large constraint because its container ship leaves Vancouver only every two weeks.  The Trucking Stream offers twice a  week delivery to the Yukon, while the Air Stream has everyday flights to the Yukon. Por shipments that can be planned in advance, though, this constraint is not too important.  In that case, the W.P.  and Y.R. Stream is only 2-1). days slower than the Trucking Stream.  The large potential that exists for the Trucking  Stream for achieving a low time in-transit from Vancouver to the Yukon, along with a low price competitive rate, is through piggybacking of carload shipments to Dawson Greek.  The re-  sulting time in-transit is about half the most optimum W.P. and Y.R. time, which ranges from 9 to 11 days. As the demand, for shipments to the Yukon increases, so will the possibility of shipping goods by truck and piggyback. The major impact of freight volume increases due to the mining development boom on the level of competition between the transport, streams should therefore be not so much on time in-transit, but on price competition itself.  The  potential for price decreases in the W.P. and Y.R. Stream is there already, and should become larger still.  The same holds  true for the Air Stream, even though the cause is as much the change to jet planes as it is the increase in mining operations.  CHAPTER VI  CONCLUSION The basic aim of this paper has been to analyze the transportation of freight into and out of the Yukon Territory, and to consider the impact of the present mining development boom on the total transport system. The Yukon Territory presents a very unique market for transportation services.  It is a sparsely populated region,  located close to the Arctic Circle and very distant from populated areas of southern Canada, and with a very harsh climate. While It "imports" most manufactured, items and food products from southern Canada, Its only "exports" are ore and asbestos concentrates.  Being so very resource-oriented, the Yukon  economy is very dependent on low-cost transportation to bring its goods to outside markets, as well as to bring in the itarns that it needs. The actual freight measurement for the Yukon was done for the year 1961+, which also conveniently showed the level of freight that existed before the first impact of the present mining boom.  It was found that for every ton of freight trans-  ported into the Yukon, about 1.5 tons were transported out. Almost all of the southbound tonnage was ore and asbestos, with two mines providing most of these concentrates.  - 82 -  - 83 The revenue per ton-mile figure on the White Pass and Yukon Route northbound Stream,was found to be quit© high, as was the Air Stream figure.  The cost of small air freight  shipments was low compared to the other streams.  The White  Pass and Yukon Route Stream has considerably lower rates for southbound concentrates.  The Trucking Stream figures for  revenue per ton-mile were surprisingly low, as they almost equalled those for the White Pass and Yukon Route Stream. The 1961+ data, as well as information from various companies, were combined to form a 1967 freight measurement. While the actual figures were not used because some company information was confidential, the growth over, this three-year period was actually quite normal.  The: only exception was the  White Pass and Yukon Route freight increase of almost $0%. While it might have been expected, it seemed that the two other streams did not make any significant gains £rom the initial mining boom impact. The 19.67 freight measurement was taken as the base year for a freight forecast up to 1975findings were:  Some of the major  (a) most freight groups should experience a  $0% increase between 1967 and 1975; (b) For every one ton shipped into the Yukon in 1975, about six tons of concentrates will probably be shipped out; (o) The transport of freight into the Yukon should be about six times as much in 1975 compared to the 1967 volume; (d) The Air Stream growth is more due to the switch to jet planes than to the increase in mining operations; (e) The increase in freight to the Central Yukon area should be very substantial, compared to the moderate  - 5k growth in all other areas; and (f) The White Pass and Yukon Route Stream benefits most from the direct demands of the Central Yukon area, although the indirect effects of the mining boom on all parts of the Yukon, as well as the normal steady; growth of the Yukon, will also benefit the other transport streams. Even a regional forecast may still hide some important occurrences, so that it is necessary to consider more detailed forecast implications.  Thus the growth of the Central  Yukon area for 1967 has been so substantial that the White Pass and Yukon Route Stream not only greatly increased its volume of general freight and fuel tonnage shipped into the Yukon, but it also increased its share of the total tonnage compared to the other transport streams. The same occurred for southbound ores.  The Central Yukon area, as a customer of transportation  services, played a much bigger role In the White Pass and Yukon Route operations during 1967, and this importance should grow even more by 1975.  This is in spite of normal growth of trans-  port demands in other regions of the Yukon. A rate decrease for the White Pass and Yukon Route Stream and for the Air Stream should be possible, although the former presents a problem of where a rate decrease would be more beneficial to the economy, and thus to the company. Involved in this trade-off situation Is the freight moving into the Yukon on the one hand, and the ore concentrates moving out of the Yukon on the other.  Rates on the White Pass and  Yukon Route Stream are low enough that for 1967, 8 o f  the  - 85 freight going from Vancouver to the Yukon travelled along this stream. The Trucking Stream, combined with rail piggyback to Dawson Greek,-presents a potentially very price competitive transport stream as well as being considerably faster than the White Pass and Yukon Route Stream.  The rates that are pres-  ently listed for this transport combination do not bear this out though.  In addition there would exist the problem that  those mining firms that send their products by truck to Whitehorse to be shipped on the White Pass and. Yukon Route out of the Yukon, thereby create a backhaul situation on the trucks going back to the mine.  This' inexpensive backhaul to the  mine, for general freight going to the mine, provides further stimulus to use the White Pass and Yukon Route rather than the piggyback and truck combination. The general conclusion is that the impact of the mining developments has already had a substantial effect on the amount of freight carried in 1967,. with most of the direct benefits accruing to the White Pass and Yukon Route transport system, in the form of much higher northbound traffic.  The  benefits should be even greater with the expected sixfold increase in southbound ore volume by 1975. The present mining development boom should thus have a very substantial direct impact on the volume of. freight shipped on the White Pass and Yukon Route Stream, as well as indirect effects on the other transportation streams.  It  should on the whole ensure the transportation companies of  - 86 -  larger freight volumes, and thereby provide the means for transport to be priced as low as possible. This low-priced transportation is the safeguard of the competitiveness of Yukon mineral exports, the health of the Yukon economy, and the economic well-being of a population inhabiting such a remote and climatically severe region of Canada.  - 87 -  BIBLIOGRAPHY A.  BOOKS  Kendrew, W.G., and D. Kerr. The Climate of British Columbia and the Yukon Territories. Ottawa, 1955. • ! Mowat, Farley. Canada North. Stewart Ltd., 1967.  Toronto: McClelland and  Owen, Wilfred. Strategy for Mobility. The Brookings Institution, 196I4..  Washington, D.C.:  Wilson, G.W. et al. The Impact of Highway Investment on Development. N.W. Washington, D.C.: The Brookings Institution, 1966.  B. . MONOGRAPHS Brewer, S.H. and D.T. De Coster. The Nature of Air Cargo Costs. Seattle, Washington: University of Washington. 1967. C. PUBLICATIONS OF THE GOVERNMENT, LEARNED SOCIETIES, AMD OTHER ORGANIZATIONS Battelle Memorial Institute. Transport Requirements for the Growth of Northwest North America. Washington, D.C,. United States Government Printing Office, 1961. British Columbia Hydro and Power Authority. The Mining Industry of British Columbia and Yukon, 3rd. Ed.. Vancouver: Industrial development Department, 196b. Carr, D.W. and Associates. "Truck and Rail Competition in Canada, " Royal Commission on Transportation, Vol. 3. Ottawa:- Queen's Printer and Controller of Stationery July 1962. Civil Aeronautics Board. Forecasts of Passenger Traffic of the Domestic Trunk Carriers, Domestic Operations Scheduled Service 1965-75« Washington, D.C'.: Research and.Statistics - Division, Bureau of Accounts and Statistics, 1965.  - 88 Dawson, M.D. "A Technique of Air Cargo Market Research," Papers - Sixth Annual Meeting. Transportation Research Forum. Oxford, Indiana: Richard B. Cross Co., 19 6>. Department of Mines and Technical Surveys, Statistics Section, Mineral Resources Division. Canadian Minerals Yearbook. Ottawa: Queen's Printer and Controller of Stationery. Dominion Bureau of Statistics, Canada Year Book, Handbook and Library Division. Canada One Hundred 1867-1967. Ottawa: Queen's Printer and Controller of Stationery, 1967. Dominion Bureau of Statistics, National Accounts and Balance of Payments Division, Industrial Output Section. Survey of Production. 1963. Ottawa: Queen"'s Printer and Controller of Stationery, 1963. Eldon, D. "Transportation Statistics," Royal Commission on Transportation. Vol. 3. Ottawa: Queen's Printer and Controller of Stationery, 1962. Financial Post. Survey of Markets and Business Yearbook. 1967-68. Toronto: Maclean-Hunter Publishing Co. Ltd., Twr.  Little, D.G. "Air Freighting," The Journal of the Institute of Transport. London:. Sept. 1962. ' Stanford Research Institute. Improvement Program for the . Alaska Highway.. Prepared for the Department of Northern Affairs and National Resources. Ottawa: Queen's Printer and Controller of Stationery, 1966. United Nations. 1967.  Economic: Survey of Africa,.- Vol. 1. ~ ~ ~ —  Ethiopia,  ; . , Department of Economic and Social Affairs. Analysisand Projections of Economic Development, III. The Economic Development of Colombia. Geneva: United Nations Publications, 1957.  . D.  PERIODICALS  Groenewege, A.D. "A Key to Profits," Canadian Transportation. Sept. 1966, pp. ,.27-31. — Stern, Morton. "Air Freight Takes Off," Canadian Transportation, June 1967, p. .72. , Watson, G.G. "Railways' Big Role in Total PD Concept," Canadian Transportation, April 1967, pp.3b-35.  - 89 Wilson, G.W, " On the Output Unit in Transportation," hand Economics. August 1959. . ' E.  UNPUBLISHED MATERIALS  Brown, C.J. "Yukon Mineral Resources and Transportation," paper presented to the Alaska Centennial Conference, Fairbanks, Alaska, 1967. Murphy, J.D. "Airline Passenger Forecasts and Forecasting Methodology." Unpublished Master's thesis, The University of British Columbia, Vancouver, 1966. Proctor, I.L. "The Correlation of Economic Indicators with Canadian Revenue (Goods) Ton-Miles." Unpublished paper, The University of British Columbia,.Vancouver, 1967. F. NEWSPAPERS Fletcher, Bill. "White Pass Sets Record," The Vancouver Sun, April 2, 1968. , . " ' G«  COMPANIES  Canadian Pacific Airlines Canadian Freightways Ltd. Loiselle Transport Limited White Pass and Yukon Route.  - 90 -  APPENDIX A  ESTIMATION OF NORTHBOUND AND SOUTHBOUND FREIC-HT TONNAGES In estimating the Yukon freight tonnage data.< from the Stanford Research Institute Alaska Highway study, the following calculations were conducted; (1) Petroleum. About 2000 truckloads come from Taylor Field at Fort St. John, and 1+00 truckloads come from Edmonton.1  Of  this 90$ ends up between Fort St. John and Whitehorse (75$ to Fort Nelson, l8$ to Watson Lake, and 7$ to Whitehorse), and the remaining 10$ goes to Alaska (82$ to Fairbanks, and 18$ to Anchorage).2  The average weight of petroleum per 3  truck is 21.7 tons,  which is then used to show the amount  of petroleum going to each town (TABLE A-I).  The total  tonnage to the Yukon itself is 11,720 tons. (2) Housetrai lers The northbound movement of housetrailers accounted for 51,000 loaded vehicle miles^ on the unpaved portion of the Alaska Highway past Mile 80.  Of this traffic 71$ ter-  1. Stanford Research Institute, op. cit., p. IV-1+9 Ibid., p. ¥-20. 3. Ibid., p. A-33Ibid., p. 7-20.  - 91 -  TABLE A-I NORTHBOUND PETROLEUM, 1961+a  Destination  $ of Trucks  Trucks  Tonnage  Ft. Nelson Watson Lake Whitehorse Fairbanks Anchorage  6?.5 16.2 6.3 8.2 1.8  1620 388 152 197 1+3  35,150 8,1+20 3,300 1+, 280 900  21+00  1+9,050  100$ Source;  See foregoing discussion  a  Does not include petroleum carried by White Pass and Yukon.  minates at Fort Nelson, 8$ at Watson Lake, 10$ at Whitehorse,  £  and 11$ in Alaska.  TABLE A-11 uses these breakdowns to arrive  at the vehicle trips terminating in each town, as well as the associated tonnages.  Total tonnage to the Yukon is 101+ tons. TABLE A-II  NORTHBOUND HOUSETRAILERS, 1961+  Destination Ft. Nelson Watson Lake Whitehorse Alaska Source:  Loaded Vehicle Miles 36, 200 1+, 100 5,100 5,600  Miles per Truck  No.of Trucks Tonnage°  : 220 551+ 838 1,500  166 7  6 1+  Stanford Research Institute, ibid., p. V-21.  a  Number of miles past Mile 80 on Alaska Highway.  ^Average load is 8 tons per truck: 5.Ibid., p. ¥-20.  source: ibid., p. A-33.  1,328 56 1+8 32  - 92 (3) Household. E f f e c t s Canadian household 71,200 loaded vehicle miles,  effects  carriers  accounted  w h i l e only 2l.|> of  northbound  trips w e r e l o a d e d and 1 0 0 $ of s o u t h b o u n d t r i p s w e r e Thus n o r t h b o u n d  loaded v e h i c l e m i l e s  of t o t a l trips the  terminate  totalled  at W a t s o n Lake,  for  loaded.6  13,700.  As  82$  and 1 8 $ at W h i t e h o r s e , 7  total n u m b e r of trips X c a n b e found from the  equation:  ( . 8 2 H 5 5 W X + (.i8)(838)x = 13,700. W i t h the n u m b e r o f trips X = 23, 19 .terminate at W a t s o n and I}, at W h i t e h o r s e . the t o n n a g e s  As  the average  t h e n are 1 9 0 tons  load per  Lake,  t r u c k is 10  to W a t s o n L a k e and l+O tons  tons, to  Whitehorse. The s o u t h b o u n d l o a d e d v e h i c l e m i l e s 8 3 $ of total  trips  leave f r o m W h i t e h o r s e ,  total 57,500.  and 17$ leave  As  from  8 Watson Lake,  the total n u m b e r of trips Y caa  b e found f r o m  the  equation:  (.83)(838)Y + (.17)(554)Y =57,500. The n u m b e r o f ' t r i p s Y is f o u n d to b e 73, o f w h i c h 6l l e a v e Whitehorse,  and 12 l e a v e f r o m W a t s o n Lake,  of 610 and 1 2 0 tons  resulting  Freight  T h e C a n a d i a n n o r t h b o u n d g e n e r a l freight  6. Ibid., 7.  Ibid.  8.  Ibid.  p.  tonnages  respectively.  (1+) N o r t h b o u n d G e n e r a l  1 , 7 7 5 , 0 0 0 loaded  in  vehicle miles ¥-21.  total  is m a d e u p of 1 , 0 2 7 , 0 0 0  from  of from  - 93 Edmonton and Calgary, 20% (or355,000^) from the Vancouver area, \$> (or 78,000) from other Prairie points, and 18% (or 320,00010) from other Alaska Highway points.11  TABLE  A-III ci ves the general distribution pattern of trips from Edmonton-Calgary, Vancouver, and the remaining Canadian Prairies: TABLE A-III  DESTINATION OP NORTHBOUND GENERAL FREIGHT, 1961+  Destination (% of total trips ) Fort St. Fort Watson WhiteJohn Nelson Lake horse  Origin Edmo nt 0 n-C alg ary Vancouver Can.Prairies Source:  6% 8  6% 9 12  33% 16  Slip.  Alaska 11% 16 35  Stanford Research Institute, ibid., p.V-l8.  Since Port Nelson, Watson Lake, Whitehorse and Alaska ,are 220, 551+, 838, and  miles respectively from Mile 80, the total  number of trips L, M, and N originating in Edmonton-Calgary, 9. This figure, representing only general freight, conflicts with the statement on page V-11+ of the Stanford Research Institute study that. 12% of total northbound traffic'(2, 71+5, 0.00 loaded vehicle miles) comes from Vancouver (which would be 329,000), as well as with the table on page A-28 showing that total northbound traffic from Vancouver equals 322,000 loaded vehicle miles. It is nevertheless still used for these calculations, because It appears to fit in better with the other data. 10. This figure conflicts with that of 30]+,000 on page V-19, but again must be used to keep the relation to the other figures on page V-l8. 11. Stanford Research Institute, o£. cit.. p. V-l8.  - 91+ Vancouver, and in the Canadian Prairies respectively can be found by the equations: (.06) ( 220) L + (.33)(551+)L + (.1J+) (838)L + (. 11) (11+1+5)L = 1,027,000 (3) (.09) (220)M + (.I6)(55i-1-)M + (.51) (838 )M  + (.16) (il+l+5)M = 355,000  (1+)  (. 12) (220)N + (.1+1) (838)1 + (.35)(iii45)N = 78,000 (5) The total number of trips then resulting are L = 11+20, M = 1+61+, and 1 = 89.  These totals can then be used to calculate  the destinations of northbound general freight by actual vehicle trips (TABLE A-IV). TABLE A-IV DESTINATION OP NORTHBOUND GENERAL FREIGHT TRIPS., 1961+  Destination (number of trips) WhitePort Watson Port St. horse Nelson Lake John  Origin  E d m o n t o n - C a l g ary Vancouver Can,Prairies Total  Source:  85 37 11  ' 85 1+2 11  133  138  Alaska Total  1+69 71+ /  625 237 36  156 71+ 31  1,1+20 11.61+ 89  51+3  898  261  1,973  Prom previous table and calculations. The number of loaded vehicles carrying general  freight  to W h i t e h o r s e  Lake number 51+3«  is thus  898, w h i l e t h o s e g o i n g to W a t s o n  12  average content figure of 17.1 tons  is not a good average to use for finding tonnages going into 12. Ibid., p. A-33.  - 95 tlie Yukon per truck, especially as these trucks don't deposit all their content at one location.  A reasonable estimate  thus may be 10 tons per truck for Whitehorse destination, and 13 9 tons per truck for Watson Lake destination.  This would  result in about 9000 tons of general freight travelling to Whitehorse, and about 1+900 tons travelling to Watson Lake. It Is not clear from the Stanford study whether the figures concerning piggyback trailers carried from Vancouver to Dawson Greek by P.G.E. railway, and from there by Loiselle Transport to the Yukon, are included as having originated in Vancouver or Dawson Greek. that the origin is Vancouver.  The assumption is  This in general seems to fit  the data picture fairly well. Of the remaining 320,000 loaded vehicle miles of northbound general freight, 30% is for the delivery of mail, • while the other 70$ is for the delivery of asbestos to Whitehorse, the delivery of White Pass and Yukon Route goods- north ward, and for local highway deliveries of little significance The mail tonnage cannot be found (although it is an insignificant part of total freight), while the White Pass and Yukon figures are already included in their flight stream totals. (5) Southbound General Freight The total southbound freight results in 8I4J4.,500  13. Company and private sources. Due to lack of better information these are the best estimates that can be found.  - 96 11L loaded vehicle miles. * While 14.91,000 of these are accounted for by local White Pass and Yukon Route deliveries as well as Cassiar asbestos deliveries south to Fort St. John, 351,000 loaded vehicle miles 15 is freight traffic to southern Canadian 16 17 points. As there were 57,500' loaded vehicle miles of southbound household effects, these were subtracted from 351,000 to yield 293,500 loaded vehicle miles of southbound general freight.  With 80% general freight originating in *  •  Whitehorse and 20% originating in Watson Lake,  18  there are  then about I4.OO loaded vehicles of southbound general freight to Canadian points not on the Alaska Highway. The average weight content then for southbound Canadian general freight loaded carrier vehicles is 17.6 19 tons.  This average content figure is very high as the  average incorporates shipments' of asbestos from Cassiar to Fort St. John.  While the average content is apparently in  the neighbourhood of 1|. tons per loaded vehicle, the resulting tonnage will be considered to be about 2000 tons of southbound general freight.20 11+. Stanford Research Institute, oo_. cit., p. A-28. 15. Ibid. 16. Figures on page V-19 state that there were only 100,000 loaded vehicle miles for. southbound general freight. They were felt not to be Inaccurate, so the data on page A-28 of the study were used. "17. Part (3) of Appendix A. 18. Stanford Research Institute, o£. cit., p. V-19. 19. Ibid., p. A.33. 20. Trucking company sources.  - 97 -  APPENDIX B TABLE B-I CORRELATION OP G.N.P. AT CONSTANT (191+9 DOLLARS) PRICES WITH TOTAL CANADIAN TON-MILES  Year  G.N.P. '000,000  Total Ton-Miles '000.000  19f°  17,330  90,800  1955 1960  21,650 25; 850  20,270  Hi}., 700  26,520 28,280 29,71+0 31,670  151,900 163 00 179,000 200,000  1961 1962 1963 1961+ r =  123 100 1 3 % 800  n  nr x  2  - (Zx)  2  nly  2  - (Zy)  2  x = G.W.P< J = ^miles  981+9  Source: G.N.P. 1950, 1953, 1955: Dominion Bureau of Statistics, National Accounts and Income Expenditure5 Research. Development Division; G.N.p. 1960-1961+: J.I. Proctor, loc.cit. Ton-railes: Canada Yearbook 1967, p. 215.  - 98 -  TABLE B-II  CORRELATION OP TOTAL NORTHBOUND FREIGHTa (On the White Pass & Yukon Railway) and G.N.P. AT CONSTANT (191+9) DOLLAR) PRICES Year 1962 1963 1961+ 1965 1966 1967  Freight^ 100 91.7 79.9 88.2 117.7 126.0  G.N.P. '000,000 28,280 29^71+0 31,670 33,770 35,400° 37,200°  r = .8368 Source: White Pass and Yukon Company includes general freight, and gas and oil °tons are indexed with base year 1962 = 100 estimates, based on trend for previous 5 years.  

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