Unfair Competitive Advantage: Drop Trailer Services

On June 24, 2010, the provincial government enacted Bill 20, amending several statutes including the Coastal Ferry Act. The amendments were in response to the report by the Office of the Comptroller General’s Report on Review of Transportation Governance Models of November 6, 2009, and include changes to the governance and regulatory framework within which BC Ferries operates. Click here for highlights of Bill 20.

As part of these amendments, the Commissioner’s role in regulating ferry transportation services was broadened to include a determination of whether BC Ferries has an unfair competitive advantage. This means that if the commission finds that BC Ferries has an unfair competitive advantage in providing a competitive service (such as carriage of drop trailers), it must order the company to provide the service through an alternative service provider or charge a minimum commission-specified tariff.

In light of the amended act, the commission held brief discussions with stakeholders of the drop trailer industry.  Drop-trailer services allow truckers to leave loaded and / or empty highway trailers at the ferry dock for transport across the Strait of Georgia without tying up their own power units (tractors). Until BC Ferries introduced its service in March 2009, there were two existing providers, Seaspan Coastal Intermodal Company, owned by the Washington Marine Group, and Van-Isle Barge Services Ltd, that re-introduced its drop trailer service from Vancouver to Nanaimo in 2004.

On July 19, 2010, the Commission issued Memorandum 37 and found that the drop trailer service offered by BC Ferries on its major route group was substantially similar to services provided by the two competing companies, Seaspan Coastal and Van Isle Barge Services.  The commission also found that BC Ferries’ drop trailer service was a competitive service as defined under the act.

Click here for other memorandums and orders as well as for other related documents on the commission’s decisions and determinations regarding BC Ferries’ drop trailer services.  Click here for related updates.