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Atlantic Gateway Distripark Plan

Final Report

Prepared For
Halifax Regional Municipality
and
Partners

Prepared By
MariNova Consulting Ltd.
UMA Engineering
CPCS Transcom
Dillon Consulting
Colliers International

March 2008
Atlantic Gateway Distripark Plan

Table of Contents
Executive Summary................................................................................................. i
1.0 Introduction.....................................................................................................1
!"! #$%&'() )*&+( ,%)- )-./0 """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 1
!"!"! 234- +%5%+*-0 4(6*)(/ """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7
!"!"1 8%+9 3: '43;-$""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7
!"!"7 <$*55*&' ,*&()"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =
!"!"= 234- -(4>*&%,) """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =
!"!"? #@ A%*,"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =
!"!"B C553)*-*3& -3 A3+90 8%9( )*-( """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?
!"!"D E4%&),3%/""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?
2.0 Literature Review and Case Studies .............................................................7
1"! F.+9,%&/"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D
1"1 G%&+3.6(4""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" H
1"7 G*4'*&*% I&,%&/ 234- """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" !J
1"= <0/&(0K F.)-4%,*% """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" !!
1"? L3-$(&M.4'K <;(/(& """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" !1
3.0 The Atlantic Gateway Distripark Concept...................................................15
7"! E$( +3&+(5-""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" !B
4.0 Functional Site Plan......................................................................................20
="! A%*, &(-;349""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 1J
="1 E$( /*)-4*5%49 -(4>*&%,""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 1!
="1"! A%*, %++()) """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 11
="1"1 A3%/ &(-;349 """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 17
="1"7 E(4>*&%, A3%/ %++())""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 1B
="7 E(4>*&%, +%5*-%, +3)-)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 1H
="= A%*, )$.--,( 35(4%-*3&)""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 1N
="="! 2.453)(""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7J
="="1 A(O.*4(>(&-)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7J
="="7 PQ*)-*&' -4%*& )(46*+("""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7!
="="= <$.--,( -4%*& +3)-)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 77
="? C-$(4 #@ +3&)*/(4%-*3&)""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7=
="?"! PO.*5>(&- """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7B
5.0 Terminal Operations and Management.......................................................38
?"! A3,( 3: FLR"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7H
?"1 <-4.+-.4("""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7H
?"7 2(4:34>%&+( )-%&/%4/)""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7N
?"= 243+()) """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7N
?"="! E4%&),3%/ *>534-)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7N
?"="1 E4%&),3%/ (Q534-)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 7N
?"="7 P>5-0 (Q+$%&'("""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =J
?"? G3,.>() """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =!
?"B S%&&*&'""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =!
?"D 8%M3.4 *>5,*+%-*3&) """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =!
?"H S%49(-*&' -$( FLR"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =1
6.0 Social, Environmental and Cost/Benefit Impact.........................................44
B"! 2,%&&*&' *)).()""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ==
B"!"! #.44(&- S2< %&/ T3&*&' """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ==
B"!"1 A('*3&%, 5,%&&*&' )-4%-('0"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ==
B"!"7 I>5,*+%-*3&) :34 54353)(/ .)("""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ==
B"1 P&6*43&>(&-%, %))())>(&-""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =?

March 2008
Atlantic Gateway Distripark Plan

B"1"! <3+*%, :(%-.4()""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =?


B"1"1 P&6*43&>(&-%, :(%-.4()"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =?
B"1"7 R3;&)-4(%> :(%-.4() """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =B
B"1"= U(-,%&/)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =B
B"1"? U%-(4+3.4)( +43))*&')"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =D
B"1"B U*,/,*:( %&/ )5(+*() 3: +3&+(4& """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =D
B"1"D P,(6%-(/ >(-%,)""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =N
B"1"H F+*/ '(&(4%-*&' M(/43+9"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =N
B"1"N F4+$%(3,3'*+%, 4()3.4+() """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =N
B"7 #3)-VM(&(:*- %&%,0)*) """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" =N
B"7"! F)).>5-*3&)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?J
B"7"1 #%,+.,%-*3& 3: -4.+9 /*)-%&+( ()-*>%-() """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?!
B"7"7 A()-4*+-(/ 6)" .&4()-4*+-(/ 9> """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?7
B"7"= #%,+.,%-*3& 3: 4%*, /*)-%&+( ()-*>%-()"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?=
B"7"? E4.+9 63,.>( %&/ /*)-4*M.-*3& 3: -4.+9 -4%::*+""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?=
B"7"B E4.+9 /*)-%&+( )%6*&')"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ??
B"= S3/(, 4().,-)""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?B
B"="! I>5%+- 3: -4.+9 /*)-%&+( W -4.+9(4)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?H
B"="1 I>5%+- 3: 43%/ ;(%4 %&/ -(%4""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?H
B"="7 #3&'()-*3& """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?H
B"="= X%&/,*&') W +3)-VY)%6*&')Z """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?N
B"="? @(- LXL (>*))*3&) W *&+4(%)(VY4(/.+-*3&Z """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ?N
B"="B [4*/'( 35(4%-*3& W *&+4(%)(VY4(/.+-*3&Z """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" B!
B"="D @(- +$%&'( *& 5435(4-0 6%,.()""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" B!
7.0 Financial Projections of Revenue and Expense.........................................62
D"! C+(%& -(4>*&%, %+-*6*-0 """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" B7
D"1 @(; /*)-4*5%49 %+-*6*-0"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" B7
D"7 P>5-0 +3&-%*&(4 0%4/ %+-*6*-0 """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" B7
D"= E4.+9 ;%*- -*>("""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" B7
D"? #3)- -(4>*&%, 35(4%-*3&) """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" B=
D"B <.>>%40 3: &(- :*&%&+*%, *>5%+- """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" B=
8.0 The Value Proposition ..................................................................................68
H"! X%,*:%Q 234- F.-$34*-0""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" BH
H"1 X%,*:%Q A('*3&%, S.&*+*5%,*-0 """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" BH
H"7 R3;&-3;& X%,*:%Q"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" BH
H"= #@ """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" BH
H"? R*)-4*5%49 %&/ -4%&),3%/ """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" BN
H"B <$.--,( -4%*& """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" DJ
H"D E(4>*&%,)""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" DJ
H"D"! A(/.+(/ (>5-0 $%&/,*&' %- -$( -(4>*&%,""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" DJ
H"D"1 #3&6(4)*3& 3: ,3%/) :43> -4.+9 -3 4%*,"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D!
H"D"7 E4.+9 '%-()"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D!
H"D"= R;(,, -*>() """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D!
H"D"? P>5-0 )-34%'( """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D!
H"D"B A(6(&.( """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D!
H"H <$*55*&' ,*&()"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D!
H"H"! E4%&),3%/ +%4'3""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D1
H"H"1 X%&/,*&' %&/ )-34%'( 4%-() """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D1
H"H"7 P>5-0 +3&-%*&(4)""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D1
H"H"= PQ534- +3&)3,*/%-*3& """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D7
H"H"? #3&)3,*/%-*3& 3: (Q534-"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D7
H"H"B C-$(4 )(46*+() Y+3&-%*&(4 ,(%)*&' %&/ 4(5%*4Z"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D7
H"N E4.+9(4) """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D7
H"!J <$*55(4)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D=
H"!J"! E4%&),3%/""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D=

March 2008
Atlantic Gateway Distripark Plan

H"!J"1 F++()) -3 +%4'3""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" D=


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9.0 Synergies.......................................................................................................76
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10.0 The Business Case and Implementation ....................................................84
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** ** **

March 2008
Atlantic Gateway Distripark Plan i

Executive Summary
The original objective of this study was to follow up on the previous study (Halifax Inland
Terminal and Trucking Options Study) that suggested that, under certain circumstances
(mainly the need for port capacity), an inland terminal and container shuttle to a site at Rocky
Lake was a compelling project from a number of perspectives.

A number of events that negatively impact on the economic viability of the original project
have occurred since that report was prepared in 2005. The estimated capacity of the port was
revised from 800,000 to 900,000 TEUs per year to 1.4M to 2M TEUs per year; this coupled
with the lack of growth in the last two years pushes the point at which an inland terminal
concept could be viable too far out into the future to be relevant. The more positive change
from a port perspective is that transload activity has started and is growing in Halifax.

A new concept was therefore required to reduce/remove truck traffic from city streets. As its
title implies, this study now focuses on the opportunity to leverage this transload activity to
reduce truck traffic without increasing the overall cost of transportation. It actually reduces
the cost of transload container delivery chain through the Port of Halifax.

The new concept is a commercially driven Distripark adjacent to the proposed Phase 13
Transportation Node in Burnside Industrial Park that is a combination transload service,
empty yard container terminal and possibly a Long Combination Vehicle (LCV) yard at some
point in the future. A daily shuttle would move transload containers between the container
terminals and the proposed facility and empties would be received, stored and delivered from
the Atlantic Gateway Distripark (AGD). Full import containers destined to locations other
than Burnside would continue to be delivered by truck from the terminals as would the full
export containers.

March 2008
Atlantic Gateway Distripark Plan ii

Schemes to improve the cost of handling containers to/from their origin/destination are not
new in the industry but are growing in popularity as governments attempt to find sustainable
solutions to remove trucks from roads and reduce costs of cargo distribution. Variations of
this concept have been studied and are being implemented in Auckland, Sydney, Gothenburg,
Virginia, Vancouver and other cities. Each was developed to deal with the specific needs of
the situation.

Based on a number of assumptions that are detailed in the report, the volumes that would be
attracted to the new terminal would result in 23,183 truck moves shifted to rail within the city
and a further 43,322 empty container truck moves shifted from the container terminals to the
AGD in 2009. This represents approximately 40% of the international container truck traffic
that would flow through the city otherwise.

Use of the AGD facility would be primarily justified by transload cargo that could benefit
from going directly to rail, and transported more economically between the AGD and the
terminals more economically using a rail shuttle. The empties generated by the transload
activity would provide the base volume for the AGD’s secondary role as an empty yard. This
empty yard activity contributes to the removal of truck traffic from city streets and adds
volume necessary to lower handling costs at the AGD. The direct transportation costs
benefits are summarised in the table below, based on the projected 2009 volume levels:

<,'&=)'"0 F"' ()*&%+, GH/,',I


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<=>'? <@AB)%+" 259C6;35 294:CD 2(4 (>5-0 >36( )$*:-(/ -3 -$( FLR
-/'). 296;D867E9

While not included in the economic analysis, the transfer of CN’s Halifax Intermodal
Terminal (HIT) activities would increase the volume of traffic through the AGD and
significantly enhance its economics as the savings per HIT container would exceed $20.00
per unit.

Even without the HIT volumes, the operating benefits of the AGD are positive in 2009 (net
savings of $1.1M) and improve as volumes grow, mainly because the cost of the rail shuttle
is nearly fixed. The projected cost savings in 2028 is between $5.9M and $6.2M.

It should be noted that, just as in the previous report, the economics are calculated on the
basis of holistic costs and assume the incremental savings and costs are realized. The actual
rates the various stakeholders may charge for additional services or be willing to give back
through rate reductions for savings incurred may vary significantly. This difference between
costs and rate constitutes one of the main challenges of creating a deal that would permit all
stakeholders to benefit.

In addition to the direct transportation operating cost savings and the reduction of the number
of trucks from city streets, the AGD will also:

March 2008
Atlantic Gateway Distripark Plan iii

! reduce GHG (Green House Gas) emissions by reducing truck mileage or concerting
such mileage to more fuel efficient rail transport;
! reduce the wear and tear on city streets; and
! reduce the wear and tear on bridges.

The following table shows a summary of the quantifiable operational benefits of the AGD.

Costs/Savings at Year 1 NPV Of Costs/Savings


at 20 Years ($000s)
($000s) Using 5% Discount
Ocean Terminal Activity
Full Containers (ship-to-truck or
truck-to-ship) $(115) $(1,921)
Empty containers (to/from
terminals) $538 $8,968
Distripark Activity
Transload containers $40 $962
Transload empties $1,100 $26,443
MT Yard Activity
MT yards 0 0
Truck Wait Time
Truck waiting time cost $732 $13,778
Total savings $2,294 $48,229
Less Annual Shuttle Cost $(1,201) $(14,963)
NET Handlings Savings/(Costs) $1,094 $33,266

The economics are sensitive to a number of variables as described in the assumptions, not the
least of which is:
! the volume of transload cargo through the AGD (particularly since the rail shuttle
costs are mostly fixed);
! the ability of the container terminals to go directly to/from rail rather than ground
containers (captive railcars have been assumed in the cost of the shuttle);
! the volume of empty exchanges at the AGD; and
! the volume of transload exports (consolidation of high volume export commodities).

The transload traffic is expected to grow at a faster pace than the organic growth of the local
market. As such, the percentage of container truck traffic that could be removed from city
streets is projected to grow from 40.5 % in 2009 to 49.1% by 2028.

The truck avoidance potential is summarized in the following figure:

March 2008
Atlantic Gateway Distripark Plan iv

Growth in Truck Moves & Projected Share Removed From City


Streets

500,000 60.0%
450,000
50.0%
400,000
350,000
40.0%
300,000
250,000 30.0%
200,000
20.0%
150,000
100,000
10.0%
50,000
0 0.0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Total Trucks Involved in Terminal Moves


Total Trucks Removed or Shortened
Percent of Intermodal Trucks Removed or Shortened

The AGD, at an estimated infrastructure capital cost of $14.5M compares favourably to the
Rail Cut alternative in terms of truck avoidance potential. However, a direct comparison
between the “Rail Cut” options in the earlier study and the Distripark is difficult because the
cut could be used by other than container trucks and it would be used one way for all traffic
in the South end of Halifax, while the AGD would affect only intermodal traffic from the
port as a whole. The AGD at $14.5M promises a 40.5 % reduction of intermodal truck traffic,
growing to 48.6% over time, while the use of the Cut would reduce south end truck traffic by
an estimated 55% but cost some $40M.

At least at the beginning, the capital cost of the facility cannot be fully paid for by the AGD
operator and government and other stakeholder funds will be required. It is recommended
that the facility be operated by a private sector operator under a long term concession
agreement that would be awarded to the qualified operator willing to pay the most towards
the capital cost of the infrastructure. The concessionaire would be required to provide
handling equipment and take the commercial risk of the business.

In summary, the AGD:


! has the potential to reduce the impact of growing truck traffic on city streets;
! can be commercially viable from an operating perspective;
! is located in an industrial area that does not appear to have any significant negative
environmental or neighbourhood impacts;
! is consistent with the Port’s strategy to attract transload facilities to Halifax;
! is compatible with the long term plans of the Burnside Industrial Park;

March 2008
Atlantic Gateway Distripark Plan v

! is a sustainable solution to the desire of HRM and many other stakeholders to reduce
the numbers of trucks on Halifax Peninsula; and
! uses the rail cut for a rail shuttle.

The next steps, if the project is deemed acceptable to government, are to develop a consensus
among the main stakeholders, structure a deal for the financing of the infrastructure between
the government and the shuttle operator (railway), and concession the AGD to a qualified
operator.

March 2008
Atlantic Gateway Distripark Plan 1

1.0 Introduction
This report is a follow up to a previous study undertaken by the same team of consultants in
2005. Its main purpose was to examine “options” available to the Halifax Regional
Municipality in removing trucks traveling to and from Ocean Terminals and Halterm through
downtown city streets.

The previous study suggested an inland terminal and container shuttle to a site at Rocky Lake
was a compelling project with a number of potential winners and few losers, providing the
timing was correct. It would reduce peninsular truck traffic and save wear and tear on local
roads while reducing air pollution in the downtown core. It was predicated on moving the
vast majority of local cargo to port terminals via a rail shuttle and considered a more viable
and “greener” alternative to using the CN Rail Cut as a truck route. The financial drivers
were based on the avoidance of future cost of capital of alternative options of expanding
Halifax port terminals and were timed to be put into place when additional port capacity
would be required.

Figure 1 – Original Concept, Rocky Lake Inland Terminal

The inland terminal would have increased the capacity of the Halterm and CeresGlobal
terminals significantly, and postponed the need to construct a third container terminal, with
the timing dependent upon the port’s overall growth.

March 2008
Atlantic Gateway Distripark Plan 2

The previous study suggested the $60M cost of the project could be shared amongst a
number of parties who stand to benefit, including Halifax Port Authority, Halifax Regional
Municipality, CN, the Province of Nova Scotia, the Municipal Group and a terminal
operating company.

At the time the previous study was completed, it was apparent that there was not sufficient
congestion at either container terminal or in downtown Halifax to justify the inland terminal
on pure operating savings. Moreover, whatever port congestion there was in Halifax was
related more to moving cargo inland to Quebec, Ontario and the US Midwest, not cargo
trucked to local or regional destinations.

It was recommended that the Halifax Port Authority and partners adopt a plan to have an
inland terminal built by the time the port is handling 900,000 TEUs per annum, which was
the port’s estimated capacity at the time. It was also recommended that negotiations begin
regarding the Rocky Lake site and that some combination of HRM, HPA and CN reach
agreement to acquire this property in a prepared state from the existing quarry owner the
Municipal Group.

The previous study also recommended that when the existing terminals were within one to
two years of reaching capacity, an operating company should be established and that a
management strategy be implemented to work with stakeholders (terminals, shipping lines,
shippers, and truckers, labour) to ensure a smooth transition to the new entity.

The present study was commissioned following the recommendations in the Halifax Inland
Terminal and Trucking Options Study to go forward with a plan to be ready when the facility
is needed. However, a number of significant changes have occurred since the previous study
was completed and the Request for Proposal issued for this study.

1.1 Changes since last study

While it is beyond the scope of this project to extensively revise the original trucking study
released in January 2006, it is nevertheless useful to quickly review the changes that have
occurred since the first study.

The original study concluded that there was “not now sufficient congestion at either terminal
or in downtown Halifax to justify the NIT (New Inland Terminal)”. It also concluded that the
NIT’s justification was contingent on the avoidance (deferral) of the capital cost of
developing a NOT (New Ocean Terminal) i.e. a third major container terminal in the Port of
Halifax. The NIT was considered “the lowest cost option to increasing port capacity when it
becomes required.” It also concluded that “the actual cost to operate the terminal would
depend on negotiations amongst the interested parties and how much each was willing to
contribute towards achieving a positive outcome. Finally, it recommended that the land
should be acquired and reserved for an inland terminal and that “when existing terminals are
within one to two years of reaching capacity, an operating company should be formed”.

In the past year and a half, a number of events or changes have occurred which could impact
on the economic viability of the original project. The following are some of the most relevant
changes.

March 2008
Atlantic Gateway Distripark Plan 3

1.1.1 Port capacity revised


Following a (yet unpublished) study commissioned by the Port Authority, the capacity of the
existing container terminals is now considered to be in the range of 1.4M TEUs to 2M TEUs,
compared to the previously used practical capacity estimate of 800,000 to 900,000 TEUs.
This puts the need for additional capacity much further into the future since, based on the
most recent capacity estimate, the existing container volume is only 25-40% of the port’s
capacity versus 60-65% of capacity previously.

1.1.2 Lack of growth


While container volumes declined slightly (3%) in 2004, the container cargo through the Port
of Halifax had generally been growing for the past decade albeit at a lower pace than the
market; and as of 2005, it was expected to continue this growth pattern. However, the growth
in containers moved through the port declined in 2006, to 530,000 TEUs and was expected to
be down another 6-8% in 2007 to about 490,000 TEUs.

Figure 2 – Port of Halifax TEUs, 2004-2007

Actuals Projected
2004 2005 2006 2007
525,553 550,214 530,722 490,000

Based on 10 year trend and incorporating the change in estimated capacity, the requirement
for a third major container terminal is pushed beyond the foreseeable future. In 2005,
assuming the container volume continued on its previous 10 year trend, would have resulted
in the volumes reaching the low end of the stated capacity by roughly 2022 while today,
(early 2008), the same exercise would indicate that the additional capacity would not be
necessary for the next century. The situational differences can be visualized on the two
following graphs:

10 Year Trend in 2005 10 Year Trend in 2007


Th 800 Th 1400
ou ou
sa sa
nd 750 1300
nd
s s

1200
700

1100
650

1000
600

900
TE TE
Us 550 Us
800

500
700

450
600

400
500

350 400

300
300
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

While these projections are by no means an indication of the realistic growth prospects of the
port, the impact of the combined changes (in growth and estimated port capacity) can be
clearly seen.

March 2008
Atlantic Gateway Distripark Plan 4

1.1.3 Shipping lines


Shipping lines using the Port of Halifax were concerned their costs could increase. They
pointed to the lack of growth in the port to explain the need to improve the cost of doing
business in Halifax and see any potential for extra costs as a threat to the port. In the short
term they are concerned they will be left to pay the extra costs of any double handling.

They also view trucking directly from the container terminals as a flexible and smooth
process, compared to having the railway supply rail cars on a shuttle train, and railing the
containers inland before being available for delivery, or having ships wait for containers to be
shuttled into the terminal for loading. The fact CN had at that time changed its operating
policy from having sufficient empty cars available at the port terminals for ship arrivals, to
one of just supplying one days worth of loaded cars for unloading at the port, was an issue.
CN was concerned about railcar asset utilization and not wanting to keep empty cars
available and sitting idle waiting for ships to arrive. Ultimately, any extra handling costs
would be passed onto the shipper and the competitive position of local importers and
exporters could be negatively impacted.

1.1.4 Port terminals


Both terminals have underutilized assets, and theoretical capacity gains of the proposed
Rocky Lake inland terminal are of no value at the present time. The terminals have expanded
with more cranes, more tracks, more land and higher stacking of containers. They do not
want to relinquish any opportunity to generate revenue and are concerned that any increase in
the cost of moving containers through the port would have catastrophic consequences with
respect to the port’s viability. They also foresee more containers going to ground and
competition between the shuttle and the trains for railcars, negatively affecting non-local
traffic.

1.1.5 CN Rail
CN indicated that the inland terminal concept was too futuristic. The company is very
focused on operating a railroad, meeting short term goals and maximizing yield from its train
operations. They do not feel the need for an inland terminal has been established. In the
meantime, the company has stated publicly on several occasions that it is considering
building its own transload facility at a site not yet released.

In terms of its port operations, CN has reduced the amount of switching at the two container
terminals, and continues to seek ways of minimizing their operating costs and maximizing
their trainload yield. CN has a significant investment in this key corridor and is looking for
ways to bring more traffic in order to maximize their revenue. CN sees Halifax as a gateway
where port costs need to be reduced if increases in rail traffic are to be realized. Traffic from
Halifax to the US. Midwest has been particularly hard hit and one main reason is the strong
Canadian dollar. It has also stated publicly that it is generally concerned about the lack of
growth at the Port of Halifax and the port’s ability to fill existing capacity.

March 2008
Atlantic Gateway Distripark Plan 5

1.1.6 Opposition to Rocky Lake site


After this study was awarded, residents in the area around Rocky Lake and Waverly
organized themselves to oppose the location of an inland terminal in their neighbourhood.
Public meetings were scheduled to be held to discuss the project and its potential impact.
Even though these meetings were not held with the consulting team, feedback received both
directly and indirectly, indicated there was substantial and mounting opposition to locating
the terminal on Rocky Lake Road

1.1.7 Transload
On a more positive note, transload facilities which were still in the planning stages in 2005
are now a reality, with the opening of Consolidated Fastfrate’s facility in Burnside Industrial
Park. The industry is growing at a much faster rate than the local market or the inland (rail)
market. There is an opportunity for this cargo to be delivered at lower overall cost if such
facilities are located in close proximity to the port to reduce trucking distances.

A study, “Building the Transload Sector in Halifax” was completed in 2007, looking at the
ways in which a Distripark would assist port growth, to determine the value of such a concept
and identify the transportation characteristics necessary to make it work. 1 This study pointed
to the need of having transload facilities located close to the port in an integrated fashion to
reduce handling costs. However the reality is that there is insufficient property at either port
terminal to realistically provide this benefit. Furthermore, transportation facilities do not
typically locate on prime real estate in the city core. Trucking and railway yards continually
retreat to the outskirts of cities because their types of business cannot afford to be located on
expensive real estate. The exception of course is the ports, which are generally tied to and
surrounded by the cities they serve. However, the very dock areas they occupy have, in many
cases become the very centres of urban redevelopment and “liveable cities” strategies.
Waterfront property is viewed as prime and condominiums are replacing dock warehouses
everywhere in the developing world, and Halifax is no exception. This makes it difficult and
very expensive for ports such as Halifax to acquire additional waterfront real estate.

The Transload Study concluded there would be benefits to the development of a Distripark.
However, based on the widespread locations of the various transload activities involved in
the delivery chain, and in particular the amount of traffic to and from the Burnside area, the
related transportation costs and/or real estate costs would make the goal of taking cost out of
the delivery chain very difficult to do on a significant scale.

Based on all of the forgoing, the authors looked at whether there was a way in which the
benefits of providing a real Distripark Terminal, including the goal of an overall reduction in
the cost of the delivery chain, along with reducing truck traffic in the city, could be achieved.

1
MariNova Consulting Ltd., “Building the Container Transload Sector in Halifax,” Greater Halifax Partnership,
2007.

March 2008
Atlantic Gateway Distripark Plan 6

Since there was no portside property available, could an inland terminal be designed to be an
integral part of a transload facility, and still reduce overall costs?

March 2008
Atlantic Gateway Distripark Plan 7

2.0 Literature Review and Case Studies


There is a rich and growing body of literature and studies relating to a number of related
concepts – inland terminals, inland ports, logistics parks, distriparks, and dry ports. While not
required in the Request for Proposals or project scope, it is useful to review these, as well as
some case studies, because Halifax is not the only community seeking such options.

The previous study examined three case studies in Auckland, Vancouver and New Orleans.
The New Orleans terminal was badly impacted by Hurricane Katrina and remains closed, and
there have been a number of interesting developments impacting the other two examples. We
have also found a number of other studies of similar concepts in Virginia, Sydney (Australia),
and Gothenburg, which are summarized herein.

2.1 Auckland

In 2005, Auckland was developing plans for five inland terminals outside the city. The
initiative began as a capacity issue for the port, as it was (and is) running out of space on the
waterfront. The Auckland region has a population of about 1.15 M and the port handled
773,160 TEUs in FY 2006-07. The port is presently about two to three years away from
running out of capacity, which is when their inland terminals will really be needed.

To some extent, Auckland’s inland terminal initiative was also a competitive response to the
port of Tauranga, located 200 miles away, which has its own intermodal terminal, Metroport,
located within Auckland’s city limits. Given its distance from the port, Tauranga’s Metroport
would be more akin to a North American intermodal port, such as those in Montreal or
Toronto, although on a smaller scale. A major difference is the fact that Tauranga subsidizes
the service as a means to increase its share of the Auckland market. The results have been
impressive, with the port increasing its volumes 500% since establishing Metroport, and the
intermodal facility itself handling 138,000 out of the port’s total of 466,000 TEUs in FY
2006-07.

In Auckland, one small terminal is operating in East Tamaki, primarily serving a large
manufacturer of white goods, Fisher and Paykel. This one hectare facility is 18 kms from the
port, and is only served by truck, primarily in off-peak periods, from 1700-0300.

A new facility is under development in Wiri, about 25 kms from the port. This facility will be
10 ha in size and is expected to be served by rail shuttle within the next 12 months, assuming
operating details can be worked out with the railway. It is expected that a distripark will
emerge “naturally” and there is another 5 ha available for this purpose.2

2
Interview with Grange Pole, Manager Inland Ports, Ports of Auckland, 22 January 2008.

March 2008
Atlantic Gateway Distripark Plan 8

Figure 3 – Auckland Inland Ports

<3.4+(_ 234-) 3: F.+9,%&/

One of the big challenges is in getting shippers to use the terminal. One incentive that has
been tried is increasing the demurrage charged at the port and reducing it at the inland
terminal. At the port it is $75.00 per day after four days; at the inland terminal it is $20.00 per
day after six days. In marketing the facility, the port concentrates on the shipper rather than
the shipping line, because the shipper gets better access to cargo and containers.

The terminals in Auckland, including the two main container terminals and the inland
terminals, are operated by the port, through various subsidiaries and its wholly-owned
stevedoring company. The port itself is owned by the Regional Council.

2.2 Vancouver

The 2005 MariNova study examined a facility called Coast 2000, which was built as a so-
called inland terminal by the Vancouver Port Authority and a local real estate developer,
Modalink. The VPA subsequently sold its 50% share to Western Stevedoring in 2004. In
actuality, this facility is really a transload facility, but it does facilitate a more efficient
movement of containers in the Vancouver region by balancing out import and export moves
and reducing the number of empty container moves.

March 2008
Atlantic Gateway Distripark Plan 9

In 2006, the BC Ministry of Transportation completed an inland terminal study.3 It identified


five key success factors:
1. an adequate catchment area;
2. availability of suitable land;
3. reliable and competitive rail service;
4. good access to a highway network; and
5. phased development to limit initial capital investment.

According to their research, most European and North American inland terminals are
predicated on import traffic, the fastest growing part of the market. Congestion at on-dock
rail terminals in the Lower Mainland is viewed as the major challenge to system efficiency as
is the imbalance in the supply of empty containers returning from the east to on-dock
facilities, to be loaded with local exports at transload facilities. The development of a facility
to ‘rationalize” the handling of empty containers was seen as the best opportunity for the use
of an inland terminal in the Lower Mainland.

The prime obstacle identified to obtaining rail service for an inland terminal was the potential
impact on mainline rail operations. Two options were considered, an empty container
terminal in the Lower mainland and an export transload-oriented terminal. Three size options
ranging from 50-225 acres were considered, with costs ranging from $38M to $148M,
exclusive of land costs. The smallest terminal would have capacity to handle 150,000 TEUs
per annum. A site was picked at Matsqui Junction, about 45 miles from existing transload
warehouses. The location of the terminal made it uncompetitive with the existing system
because of increased trucking costs.

However, it was determined that having a cluster of import distribution facilities located at
the same location would vastly reduce the costs of drayage. Combining an inland terminal
with an integrated logistics park was also considered but a large land assembly in the Lower
mainland was thought to be very difficult and expensive, and it would be difficult to relocate
several new facilities recently constructed. One conclusion was “more rapid expansion of
container-handling facilities adjacent to the on-dock container terminals, may offer better
efficiency and increased levels of service if it can be accomplished”. Moreover, the authors
considered the co-location of an inland terminal with an integrated logistics park to be a “best
practice”.

3
BC Ministry of Transportation, “Inland Container Terminal Analysis, Final Report,” IBI Group, 12 December
2006.

March 2008
Atlantic Gateway Distripark Plan 10

Figure 4 – Transload Facilities in Lower Mainland BC

<3.4+(_ `I&,%&/ #3&-%*&(4 E(4>*&%, F&%,0)*)K ^*&%, A(534-aK I[I L43.5

2.3 Virginia Inland Port

In 1984, the Virginia Port Authority began to examine ways to increase its market share.
Their inspiration came from a facility owned by the port of Rotterdam, near the German
border, about 120 miles from the port at Venlo in the Netherlands.4 Along with the Norfolk
Southern railway, they determined that an inland terminal could be a means to extend the
port’s hinterland into Ohio, Pennsylvania, Maryland, West Virginia, New York and Virginia
itself. Most of this hinterland was being served by the Port of Baltimore. A site was selected
in the Shenandoah Valley near Front Royal. It had access to two interstate highways and
1,400 ft. of rail trackage alongside. The initial concept was to run three trains per week,
moving a total of 20,000 TEUs per annum. Initially, marketing was focused on cargo being
trucked or moved by barge to Baltimore.

By 1996, the facility had grown to 40 acres with over 17,000 feet of rail track and was
handling about 100,000 containers per annum, all of which was considered new business for
the VPA. VIP provides all the services that a port terminal does including at least 6 trains per
week, warehousing, customs, very flexible operating hours, a chassis pool, and reefer plugs.

4
J. Robert Bray, “Virginia Inland Port: The Case for Moving a Marine Terminal to an Inland Location,” prepared
for AAPA Port Authorities Professional Port Manager Program, September 1996.

March 2008
Atlantic Gateway Distripark Plan 11

Effectively, the port was moved 220 miles inland. Once operational, the VPA joined with
Washington Dulles International Airport to attract warehouse/distribution facilities to the
corridor connecting the two facilities. There are now over 80 distribution centres operating in
Virginia, with over 30M sq. ft. of warehouse space, averaging 375,000 sq. ft.

2.4 Sydney, Australia

Sydney is the largest container port in Australia, handling about 1.6M TEUs in 2006. A
number of years ago, Sydney Ports Corporation decided to move its entire container handling
facilities to nearby Botany Bay, about 12 kms south of the central business district. A new
AU $1B expansion has been underway since 2006.

Coincidentally, the port is also embarking on the development of an Intermodal Logistics


Centre (ILC) at Enfield, about 25 kms from the city centre and 18 kms from Port Botany.5
The project will cost AU $165M, but we have not been able to determine who will pay for it
nor the operator.

At the present time, about 20% of containers are moved in and out of the port by rail. With
the development of the ILC and intermodal shuttle service, it is expected to increase to 40%.
To be successful it was determined that a potential site had to have:
! close proximity to the area it serves;
! connected to a rail line;
! within easy access of trucking routes;
! located in an industrial area;
! large enough to allow other freight-related activities to take place;
! a large market nearby; and
! environmentally and socially sustainable.

It is expected that each train will carry between 60-80 TEUs. The Enfield ILC will be built on
a 60 ha site, with a 12 ha intermodal facility. Total capacity is expected to be 150,000 TEUs,
with potential to grow to 300,000 with further expansion, and there will be enough space
provided for six warehouses of 650,000 sq. ft.

It is expected that the ILC will resulting a competitive alternative to moving containers by
truck and that “delivering containers closer to their origin and destination improves delivery
cycle times and reduces trucking costs. Empty container storage on site can further reduce
costs and unnecessary truck movements, compared to current practice, where empty
containers are generally trucked back to the Port Botany area.

5
Intermodal Logistics Centre at Enfield, Project Overview, Sydney Ports Corporation, January 2006; See also
“Developing Freight Hubs: A Guide to Sustainable Intermodal Terminals for Regional Communities, Department of
Transport and regional Services, Government of Australia.

March 2008
Atlantic Gateway Distripark Plan 12

Figure 5 – Enfield Intermodal Logistics Centre, Port Botany

<3.4+(_ <0/&(0 234-) #34534%-*3&

2.5 Gothenburg, Sweden

There have been numerous initiatives in Europe, but especially the Baltic and North Sea
regions, which have been promoting the concept of “dry ports”, inland freight terminals or
inland ports, along with transport logistics centres, and rail service. SustAccess, which
promotes Sustainable Accessibility between Hinterlands and Gateways around the North Sea,
views them as critical infrastructure in the development of gateways, which themselves are
viewed as “promoting sustainable and efficient transport and logistics”.6

A dry port is defined as “an inland intermodal terminal directly connected to a seaport, with
high capacity traffic modes, where customers can leave/collect their goods in intermodal
loading units, as if directly at the seaport”.7 It also provides a “set of efficient services such as

6
“Feasibility Study on the Network Operation of Hinterland Hubs (Dry Port Concept) to Improve and Modernize
Ports’ Connections to the Hinterland and Improve Networking”, Intergrating Logistics Centre Networks in the Baltic
Sea Region, FDT Association of Danish Transport Centres, January 2007; SustAccess, “Improving Connection
between Gateways and the Hinterland”, Region Vastra Gotaland, November 2005; Andrius Jarzemskis, Aidas Vasillis
Vasilliauskas, “Research on Dry Port Concept as Intermodal Node” Transport Research Institute, Transport - 2007,
Vol. XXII, No. 3, 207-213.
7
V. Roso , J. Woxenius., G. Olandersson, “Organization of Swedish dry port terminals”, A Report in the EU
INTERREG North Sea Programme, Chalmers University of Technology, Gothenburg, 2006.

March 2008
Atlantic Gateway Distripark Plan 13

transhipment, storage, depot, maintenance of containers, customs clearance, and tracing and
tracking”.8

A fully functional dry port is believed to increase the energy efficiency and the
environmental performance and relieve road congestion of port cities.9 Removing seaport
functions from the port area also frees up valuable space on waterfront lands.

There are three types of dry ports: “distant” dry ports, “mid-range” dry ports and “close” dry
ports. In the North American context, a distant dry port would be akin to CN’s intermodal
terminals in Montreal, Toronto and Chicago. A mid-range dry port would be similar to the
Virginia Inland Port described above or the proposed Inland Port at Moncton, and is
generally a distance away that could also be served by truck. As described above, VIP is
about 330 kms away from the port. The best example thus far of a “close” dry port in North
America is the Alameda Corridor serving Los Angeles/Long Beach.

The close dry port concept is the most relevant to this study. In many ports, “the main
problems seaports are facing are lack of space or inappropriate inland access”.10 Ports can
therefore increase their capacity by establishing a close dry port in their immediate hinterland
or at the outer fringes of the city. With increased terminal capacity comes the ability for
increased productivity since larger vessels may then call at the port. The close dry port also
“consolidates road transport to and from shippers outside the city area offering a rail shuttle
to the port relieving city streets and the port gates”.11

Gothenburg, the second largest city (regional population 510,000) in Sweden and largest port
in the Baltic, is connected to its hinterland through a network of rail shuttles as well as close,
mid-range and distant dry ports. In 2006, the port handled 820,000 TEUs of containers and
another 1M short sea roll on-roll off units.

Gothenburg has 22 rail shuttles to various inland destinations including one operated by
Green Cargo AB to a dry port 10 kms from the port. This shuttle operates 6 times per week.
Gothenburg also has an intermodal freight centre (IFC) or cargo village at Gullbergsvass,

8
V. Roso, “Evaluation of the dry port concept from an environmental perspective: a note”, Transportation
Research, An International Journal, Part D 12 (2007), 523-527.
9
“Sustainable technology options and policy instruments: Report no. 3 Appendix, European Panel on Sustainable
Development, 2006-05-16.
10
Ibid., p. 8.
11
Ibid., p. 9.

March 2008
Atlantic Gateway Distripark Plan 14

which is connected to the Green Cargo dry port. Despite good inland rail connections,
however, only 30% of Gothenburg’s container cargo arrives by rail.12 The Green Cargo
terminal at Gullbergsvass handled 15,000 TEUs in 2007.

Thus far in the gestation of dry ports in Sweden, at least, they have not been linked to the
development of distriparks, cargo villages or intermodal logistics centres.

12
V. Roso, “The Dry Port Concept: Applications in Sweden”, Chalmers University of Technology, Division of
Logistics and Transportation, 2005.

March 2008
Atlantic Gateway Distripark Plan 15

3.0 The Atlantic Gateway Distripark Concept


The study team proposes a new and much less expensive concept for a combination
transload-and rail driven Distripark and empty container terminal that takes advantage of
existing rail infrastructure to link the Distripark and the port and build on the port’s recent
success in attracting transload and distribution business to the Halifax gateway.

Figure 6 below provides an overview of the Halifax area under discussion, showing North
Burnside with the proposed Burnside Expressway and Distripark site.

Figure 6 – North Burnside with Burnside Expressway

Our new concept is a hybrid combining the “close” dry port and the Distripark in one
location 18 kms from the port, at the north end of Burnside Industrial Park, adjacent to the
proposed Phase 13 Transportation Node in Burnside Industrial Park.

The new concept is not a rail spur, but a Distripark Terminal. Initially, it is envisioned that
CN will operate one rail shuttle per day with dedicated equipment in each direction, taking
containers to and from both container terminals. The concept uses the rail cut for rail traffic.
This report assumes using traditional diesel-electric locomotives presently assigned to service
in Halifax, to avoid additional costs. However, CN or other stakeholders may want to
consider the use of environmentally-friendly hybrid locomotives specifically for this service,
which may prove advantageous with respect to applying for federal infrastructure money.

The concept is commercially-driven and provides a competitive alternative to trucking. It will


provide a less expensive delivery chain for transload containers than the current system of
trucking from Halterm and Ceres port terminals. There is no diversion or building of new rail
routes required, and it links up with the proposed Burnside Expressway and other synergies.
The basic concept is illustrated below:

March 2008
Atlantic Gateway Distripark Plan 16

Figure 7 – Distripark Terminal Concept

Burnside
Present Situation Industrial Area
Port Terminals
Port Labour
Across City Dray
Empties

Atlantic Gateway Terminal Concept Burnside


Industrial Area
Atlantic Gateway Distripark
Port Terminals Distripark
Gateway Labour
Yard Shunt Empties
Yard Shunt

3.1 The concept

Under the present situation, import cargo that arrives at the port to be transloaded locally is
picked up by truck and driven to a transload facility. The empty container is generally
returned to the port by truck. The same container is later picked up by truck to be positioned
to a shipper for loading of export cargo. Finally the loaded export container is then trucked to
the port for vessel loading. Thus the container may make as many as four trips in the process.
This situation is a result of different processes for import versus export cargo, as well as
having a wide dispersion of facilities which can add cost to the system.

The first priority for a successful Distripark is to design a facility which maximizes the
number of processes which can be centralized into one location. These processes include the
unloading of containers, inspection, empty storage, repair, reloading of the container, all
without using normal gate restrictions, public roads or highways with their accompanying
licensed chassis and licensed truck drivers. The design needs to provide lower cost yard
jockeys to be respond to the need of containers using shunt trucks and yard chassis within the
park, avoiding road tractors and road chassis.

More importantly, it must be designed to provide competing transload operators, various


forwarders and transportation companies to have access to this integrated facility, while still
maintaining their independent public road access. Finally, the facility, while it cannot be on
the port, needs to be directly tied to the Port of Halifax in the most economical manner. The
best way to achieve this is finding a site that can feature a direct and dedicated rail shuttle
service, close to existing industrial users while also having great public road access.

This concept proposes using a shuttle train which not only can move containers more cheaply
on an operating cost basis, even when adding an additional lift in the process, but is also a
competitive service in addition to trucks, and not a “forced” fit for all port traffic. This last
point is the most important one of the concept. Trucks are faster, more versatile and for some
moves – of more value than a rail shuttle. Thus, this concept promotes a competitive chain of
delivery that can deliver a more cost effective product for those products that are the best fit

March 2008
Atlantic Gateway Distripark Plan 17

for this type of service. This way the shuttle becomes a competitive transport mode and
remains a commercially driven product. This in turn means that the better “value” for a given
movement will determine its routing. The Distripark Terminal is designed as an integrated
facility as shown in Figure 8.

Figure 8 – Atlantic Gateway Distripark Terminal Concept

The concept shows nine (9) transload sites varying in size from 14-30 acres located to one
side of the container facility. Each of the nine facilities has normal public road access to their
premises identified by the orange coloured road way above. Each operator has their own
facility designed to their own specifications, based on their particular business. (The blue line
above indicates private roads connecting each site in the terminal. The red line indicates
public roads to and from Phase 13.)

Most importantly, each facility has access to a “back door” through their own back gate
which allows for the seamless movement of containers between the transload operator and
the terminal facility shown in blue, without access to public roads and related costs. The gate
mechanism at “C” location is simple and is set between the terminal and each of the transload
facility operators. Traffic can also move between transload facilities as well, for maximum
flexibility.

For movement between the transload facilities and the terminal, jockeys report with key input
and cards as well as being recorded on camera, Security for movements entering each of the
transload operators properties are determined by each operator.

March 2008
Atlantic Gateway Distripark Plan 18

The terminal facility includes a rail unload/load area for the shuttle train. In addition it has
container empty storage areas as well as yard chassis for direct loading of containers to be
moved around the Distripark.

Finally, it has a main public road gate that is open 24 hours for ease of access. Trucks using
public roads can travel either directly to the main divided highway or to the already
established adjacent Burnside industrial area.

The train shuttle runs with dedicated car sets, and a regularly scheduled run, just like a
commuter train. Dedicated car sets ensure consistent capacity and availability as well as
allowing for a reservation system to be put into place as necessary. The regularity of
schedule, such as would be the case with a commuter train, provides for operating reliability.
Everyone knows when this train operates.

The container facility would also include container repair, empty inspection, cleaning and
services.

Figure 9 shows the movement of a typical Import loaded container that would be transloaded
at the Distripark. The yard shunt reduces road miles, dray labour, wait time and can be done
at any time night or day.

Figure 9

Atlantic Gateway Terminal Concept


Transload Imports Burnside
Industrial Area
Atlantic Gateway Distripark
Port Terminals
Gateway Terminal Labour Distripark

Yard Shunt Transload Facilities

Figure 10 below shows the reverse operation. Here a typical export load that has been
loaded at the transload Distripark, is placed on the rail shuttle and sent to the Port. It
should be noted that export loads can often ordered at the last minute in large quantities,
which can provide problems in terms of having sufficient tractors available to haul the
quantities in time to meet the vessel sailing. The rail shuttle provides the alternative and
opportunity to handle such volumes more efficiently to the port.

March 2008
Atlantic Gateway Distripark Plan 19

Figure 10

Atlantic Gateway Terminal Concept


Transload Exports Burnside
Industrial Area
Atlantic Gateway Distripark
Port Terminals Distripark
Gateway Terminal Labour
Transload Facilities
Yard Shunt

Finally, Figure 11 shows the use of the container terminal as a storage depot for empty
containers. These can be used for serving road chassis bringing empties in or taking them out
to remote facilities, as well as serving any other requirements (cleaning, repair) for those
empties being moved within the facility.

Figure 11

Atlantic Gateway Terminal Concept


Burnside
Industrial Area
Atlantic Gateway Distripark
Distripark
Gateway Terminal Labour
Road Transport Yard Shunt Transload Facilities

These three processes (i.e. import loaded transload containers, export loaded transload
containers and empty exchange service) provide the opportunity for significant cost savings
in the transload supply chain.

March 2008
Atlantic Gateway Distripark Plan 20

4.0 Functional Site Plan

4.1 Rail network

Halifax serves as the eastern terminus for CN train operations. The Bedford Subdivision
covers the local route between Truro and Halifax. Heading east toward Halifax the
Dartmouth Subdivision branches off at Windsor Junction (mi. 15.8) thereby providing a
connection between the CN mainline and Dartmouth, as shown in Figure 12.

Figure 12 – Rail Network

Continuing into Halifax on the Bedford Subdivision from Windsor Junction, over 95% of the
freight rail traffic is comprised of containers bound for the port terminals of either
CeresGlobal or Halterm. Originally this section was a two track mainline between Halifax
and Windsor Junction. Frequent trains plus slower speeds owing to the heavy 1.5% ruling
grade between Bedford (mi. 9.5), (elevation 5 M) up to the Rocky Lake Quarry (mi. 12.7)
(elevation 60 M), provided the impetus for double tracking this section. In 2004 a hurricane
washed out a section of one of the 2 tracks near Bedford, which resulted in CN removing the
second main track from mileage 7.0 to Windsor Junction. There is still the ability for trains to

March 2008
Atlantic Gateway Distripark Plan 21

pass in the section since the Halifax Transfer Track (formerly the second main track), runs as
an additional track between mileage 4.5 and mileage 7.0 through Rockingham yard.

The mainline officially ends at the east end of Rockingham yard at Fairview Junction (mi
5.0). Here the Deepwater Branch diverges at Fairview Junction from the mainline,
connecting the CN domestic intermodal terminal (HIT). The former double track mainline
continues as a single yard track through the cut toward Halifax passing the Chester Spur (mi
4.5), and is designated the HOT-Rock Connecting track. CN removed one of the two main
tracks several years ago in the cut, leaving only a second yard service track between mileage
2.5 and mileage 1.4. From mileage 1.4 two tracks branch into the HOT terminal yard. The
VIA station is located at mileage 0.0 Bedford Subdivision.

The CN Dartmouth Subdivision descends eastward from Windsor Junction, passing under
Highway 102, passing by the community of Waverly, dropping down toward Lake William
and then climbs toward the Burnside Industrial area. It finally descends into the Bedford
Basin and downtown Dartmouth. The Dartmouth Rail yard is located in prime downtown real
estate at the waterfront and is used as a support track for various industries but primarily as a
holding area for empty auto rack railcars waiting to load imported automobiles at the CN
Autoport facility east of town.

4.2 The distripark terminal

The site location is adjacent to Phase 13 of the Burnside Industrial Park.

Figure 13 – Distripark Terminal

March 2008
Atlantic Gateway Distripark Plan 22

The area to the east of the site is designated to be used as a Transportation Node. The 64 acre
terminal site is entirely on Municipal Group land, lying just east of the CN Dartmouth
Subdivision as shown below. Thirty-two of these acres will provide the initial terminal area.
The terminal will lie at an approximate elevation of 40 metres above sea-level. This is
approximately the same elevation as the CN Dartmouth subdivision where the proposed
Burnside Expressway will pass overhead at the south end of the proposed terminal.

The terminal property abuts Phase 13 of the Burnside Industrial Park to the east, which is the
latest proposed development for the Burnside Industrial Park. This results in local truck
access which can be provided through Phase 13 if it is modified for this purpose. One benefit
of this plan is that the Distripark itself can be accommodated with little variation to Phase 13.
This is shown in Figure 14.

Figure 14 – Distripark Terminal Conceptual Layout

Conceptual layout
showing 9 properties 1
with both direct “back 2
door” terminal access
plus public road front
door access. 3
Termina
5 4

6
7

8
9

4.2.1 Rail access


As seen in Figure 14 above, the terminal will be double ended, with two pad tracks of 3200 ft
in length plus a service track for operational purposes. Since all tracks will be double ended,
maximum flexibility for shuttle train access will be provided. There may be a need to provide
an easement wider than the existing 100 ft railway right of way, through “Ungranted Lands”
to the north of the terminal in order to allow rail access based on railway gradients.

The following is a cross-section showing a typical layout of the proposed container Terminal.

March 2008
Atlantic Gateway Distripark Plan 23

Figure 15

4.2.2 Road network


This section describes transportation impacts of the proposed Inland Terminal and Distripark
to the overall transportation road network. Also, it provides an overall description of the
proposed location, access concept, and results of the initial feasibility assessment of the
proposed access/connectivity solution. As described above the proposed location for the
Distripark is adjacent to the north-west side of the Phase 13 development lands of the
Burnside Industrial Park along CN Dartmouth Subdivision track. This location was selected
from several alternatives as described earlier in the report. The proposed location offers
several significant benefits, from the access/connectivity perspective, resulting from the
proximity to the existing and future major highways (the proposed extension of
Highway 107) and interchanges (the Highway 107/118 interchange and the proposed
Highway 107/Akerley Boulevard interchange), and the Burnside Drive extension.

Probably the most significant benefit of the proposed Distripark development for the overall
transportation/road network is to curb the growth of truck traffic related to the Halifax
container terminal operations from Downtown Halifax and the MacKay Bridge. The number
of trucks using both terminals was 72,250 in 2006 (according to the 2006 Trucking Report).
Approximately 700 truck trips related to the container operations at both terminals are
accounted for daily in Halifax. Table 1summarizes existing annual truck volumes generated
by the Halifax port terminals and their distribution. Figure 16 illustrates the existing situation.

Table 1: Annual Truck Volumes Generated by the Halifax Port Terminals,


2005 (pre-transload)

Annual Truck Bayers Other South Total


Volumes Burnside Lake HRM Truro Valley Shore Trucks
Halterm 4,550 853 284 15,750 3,500 1,313 26,250
Ceres 7,973 1,495 498 27,600 6,133 2,300 46,000

Richmond/HIT 10,400 1,950 650 N/A N/A N/A 13,000

Total 22,923 4,298 1,433 43,350 9,633 3,613 85,250


% of Total 27% 5% 2% 51% 11% 4%

March 2008
Atlantic Gateway Distripark Plan 24

Figure 16

All truck traffic generated by the proposed new Distripark facility (the Terminal and
Distripark subdivision) will access a highway network adjacent to the proposed site, and will
be distributed through this network to their destinations throughout the Region, Province and
outside without affecting Downtown streets. Table 2 below presents anticipated initial
volumes and distribution of truck traffic from the proposed Terminal/Distripark, while Figure
17 depicts the related future truck traffic operations and illustrates the relief from truck traffic
provided to the Downtown area by the proposed solution.

Table 2: Year 1 Annual Truck Volumes Generated by Ocean Terminals


Number of truck moves to/from AGD WEST via 107 connector 8,190 13%
Number of truck moves to/from AGD EAST via 107 connector 53,236 87%
Total 61,426 100%

March 2008
Atlantic Gateway Distripark Plan 25

Figure 17

The truck traffic issue in Downtown Halifax will aggravate in the future as significant growth
in port terminal operations, particularly relating to Transload is anticipated. The projected
growth of ports operations (and related growth of truck traffic) provides additional
justification for the proposed Distripark project. Table 3 presents projected growth of truck
traffic (projected truck traffic annually and average daily) related to the operations of the
proposed facilities.

Table 3: Projected Truck Traffic Generation (Terminal/Distripark)

Year 2009 2013 2018 2023 2028


Total Annual No. of Trucks 61427 74301 94253 119561 151666
Average Daily No. of Trucks 246 297 377 478 607

March 2008
Atlantic Gateway Distripark Plan 26

Figure 18

This truck traffic will be using in the future Highway 107 Extension/Burnside Expressway –
a new connector between Highway 102 and Highway 118 (not built yet). NS TIR is currently
completing the feasibility study and preliminary design of the Highway 107 Extension. As
part of the project, an extension of Burnside Drive is also proposed. This new road will be
connected with Highway 107 through a partial interchange. A full interchange is proposed at
the proposed crossing of the extension of Akerley Boulevard to the Phase 13 subdivision
proposed by the Halifax Regional Municipality as an expansion of the existing Burnside
Industrial Park. Figure 18 presents the future connections of the proposed site and the
adjacent Phase 13 development to the provincial (highway), regional and local road network.

4.2.3 Terminal Road access


To facilitate the connections as described above a preliminary access network concept was
developed and is presented in Figure 19.

March 2008
Atlantic Gateway Distripark Plan 27

Figure 19

We propose to expand the partial interchange between the Burnside Drive Extension and
Highway 107 (the NS TIR project) to a full interchange and provide exclusive access for
truck traffic to/from the Terminal and Distripark. This interchange will also provide direct
connectivity to the Burnside Industrial Park through the proposed Burnside Drive extension.
The proposed Long Combination Vehicle (LCV) assembly facility would benefit from a
direct highway access through the interchange.

An expansion of the originally planned Phase 13 internal road network is proposed to provide
public gateways to the Distripark. This network culminates at the proposed Highway
107/Akerley Boulevard interchange (the NS TIR Highway 107 extension project) and, in
addition to providing access to the Highway 107, connects the proposed site and the whole
Phase 13 area to the rest of the Burnside Industrial Park (via existing Akerley Boulevard).
There will be also internal private roads connecting Distripark lots and the Terminal.

During the course of this Study we attempted to assess the feasibility of the proposed road
network concept and coordinate our solutions with the Phase 13 plans and the Highway 107
Extension project (based on available information). It has to be noted that the NS TIR’s
Highway 107 Extension project is in a preliminary stage of development. Further close
coordination with the Regional/Local Municipalities and NS TIR will be required during
subsequent planning and design stages of the Distripark project.

March 2008
Atlantic Gateway Distripark Plan 28

4.3 Terminal capital costs

It should be noted that we assume the Distripark development will be undertaken by a


developer in conjunction with the city and other stakeholders. As in Figure 9 above, land for
the Distripark will have to be acquired from three different owners, Chappell, Webby and
Shortt. So the Distripark area is not included in our cost assumptions.

The terminal proper will require property from Municipal Group as well as at least easement
rights to a portion of the ungranted lands for the rail access at the north end of the intermodal
terminal. The cost of these is also not included in our calculations.

Opinion of Probable Terminal Costs

1. "Average Probable Costs" shown in Table 4 are based on a multifunctional intermodal


terminal design that typically includes the following items:
! pad, support, and lead tracks including crossovers, ladders, and connections;
! asphalt/concrete/granular pad area designed for loaded container stacking up to four
high;
! entrance/exit gate including queue lanes, kiosks, islands, truck & employee parking;
! building for operations/administrative staff;
! ground-air system for charging trains;
! site security incl. chain link fence, gates, and CCTV system;
! IT systems conduits for typical communication and inventory systems requirements;
! drainage system including: ditches, storm sewers, and retention ponds;
! internal access roads, at-grade railway crossings, and connection to external roads;
! yard lighting sufficient for night operations;
! culverts and bridges for minor road and water crossings;
! typical site preparation measures incl. clearing, building demolition, etc.; and
! typical environmental features such as oil/water separators, erosion control, etc.

Table 4

DISTRIPARK TERMINAL ($M)


GRADING 2.2
TRACK 2.3
PAVING 4.2
GATE 0.7
STRUCTURES 0.3
BUILDINGS 0.3
ELECTRICAL 0.6
ENVIRON'L 0.2
SIGNALS & COM 0.2
ENGINEERING 0.4
SUB TOTAL 11.4
CONTINGENCIES 2.1
TOTAL 13.5

LOCAL ROAD ACCESS 1.0


GRAND TOTAL 14.5

March 2008
Atlantic Gateway Distripark Plan 29

2. Excludes:
! costs for bulk rock excavation;
! costs for all major environmental mitigation, remediation, design, etc.;
! cost of any major utilities crossing the site;
! construction cost of bringing site services to the site, other than road access;
! all costs for other road changes and improvements outside of the terminal;
! costs for noise or light abatement; and
! costs for land acquisition.
Notes:
Probable costs are based on year 2006 average construction costs.
No field information is available for preparing this estimate (i.e. geotechnical, survey,
hydrologic, etc.)

Finally the option of turning the planned Burnside Expressway (107) interchange at Burnside
Drive into a full interchange for access at the south end of the facility will cost approximately
$6M. The primary reason for this interchange is not truck traffic to the terminal, but to
provide for an LCV assembly point.

4.4 Rail shuttle operations

The Burnside site, while being the furthest alternative site from the port terminals by an
additional 8 rail miles, nevertheless has the best features to become an integrated Distripark
Terminal. The rail route the new location is traced as the yellow line shown on the tracks in
Figure 20 below.

Figure 20

March 2008
Atlantic Gateway Distripark Plan 30

4.4.1 Purpose
The Rail shuttle has two basic operational requirements:
1. Carry local export transload containers from the Distripark which have been loaded
with export to the two port terminals by rail.
2. Conveyance of locally destined import containers from the two port terminals to NIT
by rail where those containers are to be de-stuffed as well as containers whose final
destination is more closely served by the new Distripark terminal.

Unlike the Rocky Lake proposal, the shuttle train is designed to run with essentially a fixed
consist, without additional switching on a commercial basis carrying transload traffic to and
from the Distripark as required, eliminating a substantial number of empty container truck
moves to and from the port terminals as well as replacing some of the loaded container
moves that presently move by truck.

4.4.2 Requirements
The Shuttle would operate 18.6 miles Halterm/Ceres to new Distripark location on
Dartmouth subdivision via Windsor Jct. and then return over the reverse route. While this site
involves more miles of travel than the Rocky Lake Site, it has the benefit of not having to
remove or construct any substantial track, other than the rail access to the new terminal
location.

Since there is no direct wye at Windsor Junction to connect Dartmouth/Halifax rail routing
directly, we assume train operation will use the wye at the junction to reverse the train
movement or alternatively, runaround the train at Kinsac, which is first siding west of the
junction. A new wye connection at this location could be added for roughly another $1M-
$2M if required for other pure operational reasons. Those reasons could be that Kinsac is
already used as a set-off /lift track for other rail traffic and therefore is occupied part of the
time, and there are other issues using the Windsor & Hantsport Railway shortline tracks at
the wye. CN has indicated they would prefer the new wye connection to be added at Windsor
Junction, but this has not been costed.

The train schedule would operate to Port requirements. We assume normal operation of 5
days per week at four hours average round trip, although based on labour contracts this could
work as a six-day-if-required assignment. The crew would most start at Halterm late in the
evening, running to Ceres were it would lift cars for the Distripark. It would immediately
return from the Distripark terminal back to the Port area in the early a.m. working one round
trip per working day. This way the crew would originate and terminate at the port end. The
shuttle could operate 2 round trips if necessary on a given day (i.e. 4 hours + 4 hours (with
some overtime for crew if necessary) but we do not anticipate volumes would require that
need on any regular basis.

We assume DS rail cars are dedicated in this service to handle the import/export containers.
There would be two "sets" of DS articulated well cars each with 50 platforms (ten 5-paks)
(about 3000 ft each train set). A typical 125 ton articulated 5-pak railcar is shown below in
Figure 21. This car is designed to carry standard ISO 40 ft and 20 ft container weights, up to
a maximum of ten 40-ft containers.

March 2008
Atlantic Gateway Distripark Plan 31

Figure 21

To reduce unnecessary switching and allow railcars to always be available for


unload/loading, one set of railcars would always be left at the Distripark terminal, and the
other set would be split and left at the port terminals. Each set could move up to 100 – 40
containers per set of railcars each way on their round trip. The sets would be split at the port
terminals based on percentage of requirement from Halterm or Ceres. Currently that would
be four 5-paks or 1200 ft for Halterm Terminal and six 5-paks or 1800 ft for Ceres Terminal.
To clarify this point, this means this means the shuttle train will arrive with one set of cars at
the Distripark terminal, set them off, run-around the other end of the terminal, couple onto
the second set of cars which have been loaded and then depart. This operation constitutes less
than two hours work for the shuttle train at the Distripark terminal and allows one crew to be
used from the port terminals to the Distripark terminal and back again within 8 hours.

We calculate about 50 containers average per day each way to start the service. The variance
on any given day would be between 30 and 80 containers per train – depending upon vessel
and pricing. The advantage to this proposal is there is always the "competitive" alternative to
have individual containers trucked if necessary at a higher cost, so there is operational
flexibility in our approach. In addition, as the volumes by shuttle increase beyond 10
containers moved per train, the actual costs drop dramatically per container, which will in
turn entice more traffic to rail.

4.4.3 Existing train service


As shown in Figure 22, the mainline is predominantly a single track mainline with sidings
spaced approximately every 10 miles to allow opposing train movements to pass one another.
Trains are identified by number, with odd numbered trains operating westbound and even
numbered trains operating eastbound.

West of Windsor Junction, trains from the Halifax as well as Dartmouth side of the basin
combine to keep this section fairly busy. At least 12 trains per day plus extras move over this
section. East of Windsor Junction, on the Dartmouth Subdivision general manifest trains 307
and 308 carry autos and other commodities. In addition, Gypsum unit trains make 2 round
trips daily between the National Gypsum dock near Burnside and the East Milford mine.
These unit trains are numbered U701, U702, U703, and U704. On the Halifax side of the
basin, intermodal trains 120, 121, 148 and 149 operate. Rockingham yard serves as the main
CN switching yard for Halifax. Around the clock yard assignments make up outbound trains;
switch inbound trains into the two port terminals and HIT (the CN domestic intermodal
terminal) as well as other local industries. Other than train 121, all freight trains arrive and
depart from Rockingham yard. Train 121 originates at HOT and operates through the cut,
lifting the Ceres and HIT traffic at Rockingham each evening. Inbound Train 120 arrives
each morning at Rockingham and then proceeds to take its domestic containers directly into
HIT for early morning availability. VIA trains 14 and 15 operate through the cut over the
HOT-Rock Connecting Track into the VIA station (mi 0.0).

March 2008
Atlantic Gateway Distripark Plan 32

Figure 22

The following table is a representation of CN train operations over the Bedford Subdivision
as well as a suggested Shuttle Schedule. The Distripark is shown in red since it is in the
reverse direction from Windsor Jct. The red times show other train schedule times which pass
the Distripark Terminal for comparison to the shuttle. Kinsac is the fist passing siding west of
Windsor Junction, assuming the shuttle train would either wye at Windsor Junction or run
around the train at Kinsac.

March 2008
Atlantic Gateway Distripark Plan 33

Table 5: Representative CN Rail Operations Bedford Subdivision

Since one round trip per day is scheduled for the Shuttle, there are no obvious capacity issues
with either the Bedford Subdivision or the Dartmouth Subdivision. The Shuttle could operate
as shown above from Halterm departing around 21:30 hours lift cars en route at Ceres
Terminal and arrive at the Distripark at about 23:15 hours. Since there is an extra set of rail
cars left at the Distripark Terminal, there would be no switching involved. The shuttle would
simply pull through one of the 2 terminal pad tracks and cut off the cars from the Port. Then
the engines would runaround the pad tracks lift the other rail cars on the other pad track,
which at this point would have already been brake tested and then depart for the Port
Terminals at 23:45. It would arrive at Ceres around 00:45 and at Halterm around 01:30 hours.
This train operation is simple and straightforward. The dedicated cars make this a very
simple operation, and risk free. There is sufficient time in the 8 hour crew day to do any
switching required at either Ceres or Halterm if required.

4.4.4 Shuttle train costs


We have estimated the following shuttle operating costs. While these are really somewhat
variable, for ease of argument we are assuming an amount that will cover operating costs. We
have presented estimated shuttle operating costs below. While these are really somewhat
variable depending upon a host of factors, for ease of argument we are assuming an amount
that should cover operating costs.

We have used cost rather than rate throughout the analysis to avoid getting into issues of
profit levels, fairness and the allocation of fixed costs within certain organizations. The costs
of the shuttle train are largely fixed costs independent of volume since we have assumed
fixed consists for ease and consistency of delivery. We have avoided speculating on how
rates would be set by the various stakeholders but do come to the conclusion that since there
is a holistic gain, all players would benefit if the overall costs in the delivery chain are
reduced making Halifax a more attractive port, especially for the transload and distribution
sectors.

We assume the two locomotives required for the shuttle train will come from existing
locomotives that area available in Halifax already. As such they are charged for one third of
the full lease costs because they are available for other duties.

March 2008
Atlantic Gateway Distripark Plan 34

Since the cars are very low mileage on the shuttle run (less than 20 miles per day),
mechanical costs are not included as they are insignificant. Since the cars will not be
broken apart at the Distripark, there is no need for operating personnel to couple air lines
on the cars. Any exceptions can be handled by the train crews. Overhead costs include a
sum for track maintenance, and is low since the shuttle represents a relatively small
amount of tonnage over the tracks used. It is important to note that these costs are well
below the savings accumulated by use of the shuttle. Therefore our conclusion is that CN
has ample room to cover costs and make a profitable service based on the gap between
shuttle costs and operating savings from the overall Distripark Shuttle concept.

Table 6
1. Annual train operating costs $550,000
Fuel, wages, overhead, admin & other
2. Annual Rail Cars lease costs $584,520
Rail platforms 100 @ $16 per day
Daily lease per platform car incl. mtnc. $16
Daily car costs $1,600
Lease days per yr 365
3. Annual Locomotive lease costs $66,667
Number of Locos 2
Capital cost 1,800,000
Total capital 3,600,000
25 year life $548
Total Annual "Operating" Costs $1, 200,667

4.5 Other CN considerations

As shown in Figure 23 below, CN has the potential to combine some of its rail operations
into the Distripark Terminal area. We have superimposed the aerials of both the existing CN
Halifax (Domestic) Intermodal Terminal (HIT) in the Phase 2 area of the new terminal, as
well as the existing CN Dartmouth Yard in downtown Dartmouth to the west side of the
Dartmouth Subdivision.

March 2008
Atlantic Gateway Distripark Plan 35

Figure 23

In terms of HIT, this would provide significant benefit to CN since much of their ability to
fill backhaul domestic containers is generated by transload freight from import containers. By
using the Distripark Terminal in lieu of HIT, CN would generate savings on most domestic
truck haul, terminal lift costs, and increase the likelihood of transload product.

In terms of Dartmouth Yard, CN is sitting on prime waterfront real-estate (and one of the best
views of downtown Halifax). The yard is used as a support yard for local switching,
primarily as car storage for the CN Autoport. One study completed a number of years ago
had already recommended moving this yard to a location very close to the Distripark. (The
Distripark concept was independently arrived at). As can be seen below, this yard would be
relatively a small addition to the overall project. CN has indicated that it is willing to
examine relocating the Dartmouth yard as long as mainline access is continued through the
Dartmouth area to reach Autoport.

We believe that CN should consider these options carefully, especially with the additional
benefits of freed up real-estate and consolidation of operating assets. It is beyond the scope of
this report to discuss the detailed cost/benefits, but the advantage also extends beyond CN in
the overall reduction of trucks on Halifax city streets.

March 2008
Atlantic Gateway Distripark Plan 36

4.5.1 Equipment
The operator of the AGD will of course have the final say in the choice of equipment,
organisation and process to be used. They will have to bear the consequences of these
decisions and are responsible for the commercial risk of the AGD.

The AGD’s operator will:


! select the quantity and type of equipment to be used at the AGD;
! choose between new equipment, relocating existing equipment or acquiring used
equipment;
! determine whether to buy or lease capital equipment;
! choose an appropriate of operating system; and
! decide on the staffing levels necessary to the business.

The AGD is expected to handle some 23,183 full containers to/from rail per year or an
average of 93 rail/truck or truck/rail moves per normal work day, some. Peak handlings per
day are expected to reach 148 handlings per day which is only 12 handlings per hour over the
12 hours of operation. This is not the same as a 5 minute truck turnaround, as it is mostly
dependant on matching the terminal’s capacity with the arrival pattern of trucks. Twelve
handlings per hour are relatively low and a combination of extended hours and continuous
operation will minimize truck turnaround by minimizing queuing.

In theory, two top handlers or reach stackers could easily handle this volume of full
containers; however some redundancy is required in the system to allow for temporary surges
and the occasional equipment failure. It is also necessary to have sufficient equipment
deployed to achieve the truck turnarounds that are foreseen, and time in the equipment
schedule for preventive maintenance activities.

The following discussion is meant only to provide an example of a capital cost of equipment
for such an operation.

Capital cost estimate: 3 Top Handlers @ $600,000 each: $1,800,000

Similarly, empty handlings of containers are expected to reach 58,355 containers per year or
some 233 per day on average, 373 per day, peak. Three empty handlers could handle the
workload (at 10 lifts per hour per machine), but some redundancy is also needed.

Capital cost estimate: 4 Empty Container Handlers @ $300,000 each: $1,200,000

Operating system requirements are very much a question of philosophy, simple operating
systems that simply keep track of the containers on site and their approximate position
require a small investment but do not provide the same benefits as an integrated DGPS
system that can plan instructions to optimize the use of handling equipment and provide a
record of all moves within the terminal. A middle of the road system should be able to supply
the information for billing and keep track of container movements on a real time basis. The
cost of such a system can vary significantly depending on whether the system is bought for
this application or the system is simply an extension of an existing (or proprietary) container
control system used elsewhere.

March 2008
Atlantic Gateway Distripark Plan 37

Capital Cost Estimate: $500,000 including base system, and on-board systems

Chassis should be supplied by the transload warehouses and colour coded by transload
facility operator. This will allow containers to be positioned to chassis on arrival and moved
to and from the transload facilities as required. To handle these chassis and some other
equipment on the terminal, four shunters are foreseen.

Capital Cost Estimate: 4 shunters @$125,000 per shunter $500,000

Fuelling and general servicing of the container handling equipment is best handled by others
(contractors) until the volume of work is sufficient to justify full time employment of the
labour and equipment necessary to perform these tasks. A maintenance facility with at least
one indoor bay for servicing the container handlers and other vehicles is required.

Ideally all the office and maintenance functions could be accommodated within a single
structure. While the building is part of the infrastructure, the AGD operator will be
responsible to provide office equipment, shop tools and strategic spares.

Capital Cost estimate: $400K including strategic spares and minimum facilities for
access to equipment for preventive maintenance

Total equipment capital cost estimate: $ 4,400,000

March 2008
Atlantic Gateway Distripark Plan 38

5.0 Terminal Operations and Management

5.1 Role of AGD

The AGD would provide two main services: an intermodal yard for transload cargo
(including some export consolidation) and an empty yard operation for the empty containers
to and from the areas of Burnside, the Valley and north of Halifax. Since the existing
container terminals will still handle empty containers, as well as full import and export
to/from truck, it is expected that the full-in full-out truck moves will increase and gravitate
towards the container terminals. The MT-in MT-out moves are also expected to grow as a
proportion of the total and will tend to gravitate towards the AGD.

Truckers and shippers would benefit from longer hours of operation and quicker turnaround
times at AGD. Moving CN’s HIT activities to AGD could be beneficial for CN, the AGD and
the shippers but this is not part of the business case considered here. The existing port
terminals would recoup some of the land presently used for truck traffic storage, empty
container storage, container repair, etc.

5.2 Structure

The AGD will require some government funding to make it viable in the short term and the
ownership of the facility should rest with the funding entities although the facility could be
sold to the private sector at some point in the future.

The shuttle operator is a critical component of the AGD’s success and it is desirable that the
shuttle operator (likely CN) also have an equity investment in the AGD to ensure that the
objectives of the shuttle operator are aligned with those of the AGD and that volumes are
maximized.

Assuming the land, infrastructure and services are funded by some combination of the three
levels of government (municipal, provincial and federal), the shuttle operator should fund,
own and maintain the trackage and the captive rolling stock (locomotives and railcars).

The AGD operating company should be a separate company or profit centre with its own
management, billing and administrative functions. It will need to work closely with the
shuttle operator; scheduling and IT systems need to properly mesh and close day-to-day
communications will be essential to ensure service objectives are met. Both the shuttle
operator and the AGD operator should be driven by commercial objectives and government
control should be kept to an absolute minimum as long as the operating company lives up to
its agreements and respects applicable laws.

The recommended arrangement for the management of the facility is a long-term concession
of the facility, similar to the arrangement between the HPA and the existing container
terminal operators, where the concessionaire would essentially function as if it owned the
facility although the land and basic infrastructure would never transfer and the concession
would come up for renewal at the end of the concession period.

March 2008
Atlantic Gateway Distripark Plan 39

The concessionaire should be chosen by competitive bids first on the basis of their technical
competence and, among the bidders determined as competent, on the basis of their financial
proposals. Although a concession fee should be paid to the owners of the facility on an
annual basis, all commercial benefits/risks should accrue to the operator. Ultimately, the
more successful the AGD operator is, the more trucks will be removed from city streets and
the more valuable the concession will be on renewal.

5.3 Performance standards

Truck turnaround should be measured continuously and monitored on an ongoing basis as


part of the concession performance standards. It is one of the main benefits for trucks of the
AGD and it should be kept under 30 minutes from the time the truck is available to enter the
facility to the time the truck exits the facility.

This means that during the hours of operation, 6 AM to 6 PM, trucks are services
continuously without interruption for breaks, meals etc.

Security standards must be maintained both as a consolidation area for export cargo and to
maintain the terminal’s status as a Custom’s bonded facility.

Automated scheduling should be implemented to keep the queuing of trucks to a minimum


and to ensure truck turnarounds can meet expected performance levels.

5.4 Process

The following descriptions depict the foreseen handling process for the three main types of
handling activities. The actual handling process will be determined by the operator and may
vary significantly from the descriptions herein.

5.4.1 Transload imports


Transload imports are generally railed to the AGD and handled from the railcar directly to a
chassis designated for the transload facility for which the cargo is destined. This chassis
should be owned by the transload facility and the AGD is deemed to have delivered the
container to the transload operator once the container has been positioned onto the chassis.
As the chassis belongs to the transload facility and the consignee is now the transload
operator, transload operators that are directly back onto the AGD can access their freight at
any time, 24 hours per day, 7 days a week. They control their own gate to the private access
gate and enter the AGD through an automated gate and security system set up on the private
road. The may choose to use their own shunting tractor or to contract this work out to the
AGD operator. Once the container emptied, it is returned to the empty stack and stored until
it is needed for export load.

5.4.2 Transload exports


Similarly, transload exports start with the positioning of the appropriate empty container on
the chassis and the positioning of the container to the transload facility for loading. Once
loaded, it is brought back for direct loading to rail and the cycle is repeated until the entire

March 2008
Atlantic Gateway Distripark Plan 40

shipment is delivered to rail. This is much more likely to occur during normal working hours
due to the benefits of handling containers directly from chassis to rail.

5.4.3 Empty exchange


After the delivery of a loaded container within the local market area, the empty may be
returned to the AGD, particularly if the next move for the trucker is the positioning of
another (different) empty for loading export to/from an area closer to the AGD than the
terminals. The empty container would be recorded by the trucker on the way into the AGD
and the request for the container to be picked up made at the same time. The truck would
then be given instructions to drive to the appropriate area in the yard to deliver the container
and then to the area pick-up the next one. The receipt of the empty container would be
registered when the container is offloaded and the container delivered to the trucker would be
registered as the truck leaves the facility.

The yard and the terminal would be laid out in such a way that all circulation is one way.
While this may occasionally require that trucks drive further up and down the terminal, it
makes traffic on the terminal much safer and allows all containers to be stacked in the right
direction (doors facing the rear of the truck).

Full containers would be handled by front end loaders (fronts or top handlers) or by reach
stackers depending on the operator’s preference. It is estimated that approximately three such
units, each capable of lifting 40-tonne containers from the second level of a double stacked
railcar would be required at the expected volume levels.

Empty containers would be handled by special purpose empty container handlers capable of
stacking such containers 5 (or more) high. It is estimated that four such empty handlers
would be required initially.

Hustlers would serve to move chassis around as required as well as pick-up and deliver
containers from transload facilities. The transload facility operator would have the option of
using their own tractor or contracting the work to the AGD operator. The estimated number
of yard hustlers required is 4, although more could be required depending on the contractual
arrangements between the AGD operator and the transload operators.

At the heart of the NIT operation is a state-of-the-art terminal management and inventory
system with Differential Global Positioning System (DGPS). The terminal management
system (integrated IT system) will plan every move based on all the information available to
it. This information would typically include:
! container locations in 3D based on DGPS verification;
! equipment locations, live DGPS;
! number of moves required to access the container; and
! best container to choose in the case of an empty to be picked up or a multi-container
booking.

The DGPS features on the machines allow the terminal management system to both verify
that the instruction was properly executed and also keep track, in real time, of the 3D
locations of any box shifted.

March 2008
Atlantic Gateway Distripark Plan 41

5.5 Volumes

Based on the assumptions made for the financial projections, some 13,633 containers would
be handled from rail to transload facilities and some 9,550 containers from such facilities to
rail for export. This leaves a significant number of vacant slots available on the rail shuttle
for export.

Empty container volumes to and from truck are made up of an estimated 26,322 empty
container moves presently handled at the existing container terminals within the port, 20,000
empty containers generated by transload activities and a share of the containers presently
handled at empty yards in the Halifax region (12,033).

In total, the AGD is estimated to have the possibility of handling 23,183 rail-chassis
handlings, 58,355 empty containers to/from truck and 43,183 moves to/from transload
facilities.

Figure 24 – Summary of handling volumes (moves)

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5.6 Manning

The AGD is foreseen to service trucks and handle containers to/from rail on weekdays, from
6 AM to 6 PM continuously and would perform the majority of positioning to-from the
transload facilities between 8 AM and 5 PM. While actual manning levels will be set by the
AGD operator, the manning levels below are shown consistent with equipment levels and
previous assumptions.

Manager/Assistant Manager: 2
Equipment operators: 15
Clerks: 3
Security: 3
Mechanics: 2
Total staff: 25

5.7 Labour implications

The ILA has jurisdiction over any activities in the longshoring industry occurring within its
geographical accreditation. As the work to be performed at the AGD is not work in the
longshoring industry, it would fall outside the present ILA jurisdiction.

March 2008
Atlantic Gateway Distripark Plan 42

If the activities of HIT are shifted to the AGD, the labour affiliation at the AGD would likely
be determined by the ownership of the terminal and the ownership of the operating company
(concessionaire).

For the purposes of this study, a heavy industrial labour rate of some $20-25 per hour, plus
30% fringes was used for labour costs at the AGD. Labour at the AGD would consist
primarily of equipment operations working to a schedule designed around the work
requirements of the terminal while providing 40 hours per week of scheduled work for the
employees. Meal hours and break periods would be staggered to maintain continuous truck
servicing throughout the day.

5.8 Marketing the AGD

The onus for selling the services of the AGD will be on the AGD operator, with support
provided by various stakeholders.

The HPA will be a major stakeholder, and it will market the facility in much the same way as
it does its container facilities. It will be part of the port’s value proposition in developing the
transload sector.

AGD will also be marketed by the Greater Halifax Partnership, which is leading the
marketing effort directed at the transload sector. It is expected that this facility will be one of
the lynch-pins and a critical piece of infrastructure required to grow the sector. Likewise,
HRM Business Parks will be involved in selling land adjacent to the facility.

CN can assist in marketing both the shuttle service and the facility itself, particularly if HIT
is relocated to the Distripark.

Other partners in the facility will also market their particular aspect of the services provided,
such as empty storage, reefer repairs and maintenance and Long Combination Vehicle (LCV)
assembly.

Of critical importance, obviously, will be the transload operators who locate in the facility.
They will market their own facility, but there is also potential to market the whole sector or
whole Distripark under one brand.

The ultimate customer of the AGD will be the shipper. In order of potential, they are:
! Transload import
! Major retailers
! Transload export
! Large volume shippers
! lumber
! newsprint
! tires
! French fries
! Local shippers (non-Burnside)
! New Brunswick
! NE Nova Scotia

March 2008
Atlantic Gateway Distripark Plan 43

! Annapolis Valley
! South Shore
! Truckers

The overall value proposition can be summarized as follows:


! lower cost;
! better access to transload facilities;
! better access to cargo;
! better access to warehousing facilities;
! facilitates large movements of multiple containers;
! reduced wait times at terminals;
! better scheduling of shipments; and
! better asset utilization (truckers).

March 2008
Atlantic Gateway Distripark Plan 44

6.0 Social, Environmental and Cost/Benefit Impact

6.1 Planning issues

6.1.1 Current MPS and zoning


The proposed Distripark Terminal site is in the current Dartmouth plan area and is in the
General Land Use classification of Reserve. It is outside the Development Boundary (the
serviceable area) for Dartmouth and is zoned H (Holding). It is adjacent to the I-2 (General
Industrial) zone that contains Burnside Business Park.

Permitted uses in a Holding Zone are R-1, Commercial, and Park uses (and accessory uses).
This is essentially a growth restrictive zone: because the area is outside the Development
Boundary, development is limited to one lot per year.

6.1.2 Regional planning strategy


Under the HRM Regional Planning Strategy (2006), the site is within the Rural Commuter
designation as shown on the Generalized Future Land Use Map (Map 2, Regional Planning
Strategy). It is also adjacent to one of the Business/Industrial Park sub-designations
(Burnside) of the Urban Settlement designation.

Regional Plan Policy S-6 states that the intent of the Rural Commuter designation is to
protect the character of rural communities and conserve open space and natural resources.
Growth will be focused in a series of centres; between centres (e.g., the study area) the
amount and form of development will be carefully controlled.

The plan identifies the Highway 107 extension to connect Akerley Boulevard with Highways
101 and 102 as a planned capital project with anticipated completion within 25 years
(Chapter 4, Section 4.1.1.2). The extension, immediately to the east of the proposed Terminal
site, would access to the site.

6.1.3 Implications for proposed use


Although the site is in the Rural Commuter designation, the site’s adjacency to the
Business/Industrial Park sub-designation, the planned Highway 107 extension, and the
existing rail line is significant. Use of the site as a Distripark terminal would be compatible
with the adjacent business park land uses and be an efficient use of planned and existing
transportation infrastructure.

The forested area to the north of the site has historically been an unserviced, growth restricted
area (in both the Dartmouth MPS and the adjacent Shubenacadie Lakes MPS) and is
currently undeveloped except for a CN Rail line; Regional Plan policies are consistent with
these policies. The Sovereign Resources Quarry is approximately 1500m northwest of the
proposed site. Therefore, use of the site as a Distripark Terminal would be unlikely to
conflict with future land uses in the surrounding area.

March 2008
Atlantic Gateway Distripark Plan 45

6.2 Environmental assessment13

This section documents the preliminary scoping of environmental and social issues
associated with the proposed location of the Burnside Distripark. Information sources include
existing environmental reports, the NSDNR wildlife database, the ACCDC database, and
reviews by the Nova Scotia Museum and a qualified biologist. References are cited
throughout the text and are listed at the end of the report.

6.2.1 Social features


The Distripark site is located on the northwestern edge of Phase 13 of the Burnside Industrial
Park. Currently, land surrounding the site is undeveloped. The nearest existing neighbour is
the existing development in Burnside, approximately 1 km to the south. The Bedford
Ammunition Depot occupies extensive lands approximately 1 km to the southwest. The
Rocky Lake Quarry is approximately 1.4 km northwest of the site, with plans to extend
southeast up to and including the site. The site is approximately 2.5 km from its nearest
residential neighbours in Lake William and Portobello, 3 km from the community of Rocky
Lake, 4 km from Lakeview and 4.5 km from Waverly. In addition to the distance, topography
in combination with the site layout, provides screening from surrounding land uses.

The site’s location is conducive to the nature of the development proposed. Phase 13 of the
Burnside Industrial Park will see extension of existing light industrial and retail uses towards
the site. HRM is planning for an extension of Burnside Drive/Highway 107, which proposes
a route crossing immediately to the south of the site (Figure 22).

6.2.2 Environmental features


The site occurs within the Quartzite Barrens (Halifax) theme region of Nova Scotia, which is
characterized by extensive barrens with a bedrock-dominated topography and repetition of
ridge-swamp-swale features. Generally, wetlands are primarily raised bogs, flat fens and
swamps, and tend to be biologically productive. A review of available resources indicates
that there are no significant features known or expected for the site that would preclude its
development for the Distripark. There are, however, a number of features that are known to
occur and may occur onsite that would require appropriate mitigation to minimize impacts
and obtain necessary environmental approvals.

A number of sensitive features are present downstream of the site, and would require
appropriate environmental protection measures to be employed during construction and
possibly operation.

13
While the TOR anticipated a greater level of environmental review, that was based on the premise that the
project would continue to be focused on the Rocky Lake site, which had undergone environmental screening-level
review as part of the previous project. However, the project site changed twice - first to the Burnside Intermodal site
and then to the Burnside Distripark site (accepted by the Steering Committee in December 2007), which ultimately
became the project focus. As a result, we lost our "window" for field truthing and the budget was used in the definition
and review of two other potential sites.

March 2008
Atlantic Gateway Distripark Plan 46

6.2.3 Downstream features


The site extends across a watershed divide (Figure 25). The majority of the site is located
within the Shubenacadie River watershed, with surface drainage via Marshall Brook and
discharge to Lake William, near the headwaters of the Shubenacadie system. Lake William is
a nesting area for the Common Loon, ranked as a sensitive species.

The headwaters of the Shubenacadie system are significant for Atlantic Salmon, Striped
Bass, Atlantic Sturgeon, Landlocked Salmon and Bald Eagle (pers.comm., D. Archibald,
NSDNR). The southern end of the site is located within the Wrights Brook watershed. Based
on a review of available topographic mapping, it appears that this portion of the site drains
directly to Wrights Brook (with discharge to Halifax Harbour at Wrights Cove). However,
there is potential for this portion of the site to drain to Anderson Lake, as the influence of the
existing rail line and downgradient wet areas on the direction of surface flow could not be
determined with certainty from mapping. The direction of drainage should be confirmed, as
Anderson Lake has been stocked with an experimental population of the endangered Atlantic
Whitefish (Coregonus huntsmani), a SARA-listed species. If determined to be downgradient
of the site, the presence of this species has the potential to require additional environmental
review and possibly approvals, such as the requirement to apply for an Allowable Harm
Permit for activity that may have an impact on the species or its habitat.

6.2.4 Wetlands
Based on available topographic and habitat mapping, the proposed location of the Distripark
will require infilling part or all of two wetlands as illustrated below.

Figure 25

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Atlantic Gateway Distripark Plan 47

The Terminal component of the site will require infilling of a wetland identified by NSDNR
mapping as a 5.5 hectare shrub bog. The wetland is currently crossed by the rail line and it is
expected that construction of the Terminal will require approximately half (over 2 hectares)
of the wetland to be infilled. Development of the Distripark (primarily Lot 1 and possibly Lot
2) will require infilling of a smaller wetland, listed by NSDNR as a 2.7 hectare fen.

The significance of habitat present in these wetlands is not known, and a wetland evaluation
is required to assess the full extent of mitigation required. Infilling will require application to
NSEL for a Wetland Alteration Approval. Mitigation is expected to consist of compensation
for the wetland loss, which is typically accomplished through a wetland habitat enhancement
project. This process is administered by NSDNR. Any disruption of 2 hectares or more of
wetland also requires registration of the project as a Class I undertaking under the Nova
Scotia Environmental Assessment process. The Minister determines whether further
environmental review is required.

6.2.5 Watercourse crossings


Construction of additional track beyond the northern limit of the Distripark may involve at
least two watercourse crossings of Marshall Brook Figure 22), parallel to the existing rail line
crossings (reportedly culverts, JWA, July 2005). A previous Environmental Assessment
Registration report characterizes the lower reaches of Marshall Brook (downstream of its
confluence with MacGregor Brook and beginning at the two watercourses crossings required
for the Distripark) as a broad meandering channel surrounded with shrubby swampy habitat,
with a 40 m section of fast-flowing stream downstream of the railway crossing (JWA, July
2005).

Development of the Distripark will require crossing or alteration of two branches of


MacGregor Brook (Figure 22). MacGregor Brook is a tributary of Marshall Brook and is
expected to dry up or have low flow during the summer months (JWA, July 2005). The brook
is unlikely to support fish species, given its small size, lack of suitable habitat, and natural
barriers to fish passage below its confluence with Marshall Brook (JWA, July 2005).

Marshall Brook is expected to support creek chub (Semolitus atromaculatus), American eel
(Anguilla rostrata) and gaspereau (Alosa pseudoharengus) (JWA, July 2005). Fish species
known for Lake William include white sucker (Catostomus commersoni), white perch
(Morone Americana), brook trout, smallmouth bass (Micropterus dolomieui), American eel,
gaspereau, and Atlantic Salmon (Salmo salar) (JWA, July 2005).

Standard mitigation measures will be required for each crossing and each will require
approval from Nova Scotia Environment and Labour.

6.2.6 Wildlife and species of concern


Based on nesting records, Osprey (Pandion haliaetus) may occur in the area. There is
potential for some species of concern to occur on or near the site in addition to the Atlantic
Whitefish mentioned previously, based on records for the larger area. The Four-toed
salamander (Hemidactylium scutatum), listed as vulnerable by the Province, has been
recorded in wetlands in the larger area. The NS Museum indicates that Dragonfly and
Damselfly species of concern may occur in the watersheds and ponds adjacent to the site; this

March 2008
Atlantic Gateway Distripark Plan 48

is supported by the data provided by ACCDC for a 5-km grid including the site. The NS
Museum also lists a number of at risk plant species as potentially occurring on site. These
species are listed below in Table 7.

Table 7: At Risk Species With Potential to Occur On Or Near the Site

Category Species Rating


Dragon Fly and Damselfly
Mottled Darner Aeshna clepsydra S2
Green-Striped Darner Aeshna verticalis S2
Prince Baskettail Epitheca princes S2
Martha’s Pennant Celithemis Martha S2
Lyre-Tipped Spreadwing Lestes unguiculatus S2
Taiga Bluet Coenagrion resolutum S2

Plant Species
Mountain Sandwort Arenaria groenlandica Yellow
Waxy-leaved Aster Aster undulates Yellow
Purple-Stem Swamp Beggar-Ticks Bidens connata Yellow
Capitate Spikerush Eleocharis olivacea Yellow
Wiegand’s Wild Rye Elymus wiegandii Red
Grass-Leaved Goldenrod Euthamia caroliniana Yellow
Black Ash Fraxinus nigra Yellow
Golden-Heather Hudsonia ericoides Yellow
Larger Canadian St. John's Wort Hypericum maius Red
Greene's Rush Juncus greenei Red
Southern Twayblade Listeria australis Red
Beck Water-Marigold Megalodonta beckii Yellow
Field Milkwort Polygala sanguinea Yellow
Vaccinium cespitosum Yellow
Herptile Species
Four-toed salamander Hemidactylium scutatum Vulnerable, Yellow

Bird Species
Whip-Poor Will Caprimulgus vociferous S2B
Great Crested Flycatcher Myriarchus crinitus S2 S3B
Common Loon Gavia immer Yellow
Definitions
S2 – rare
S3 – uncommon
Yellow – vulnerable, sensitive to human activities or natural events
Red – at risk or may be at risk

March 2008
Atlantic Gateway Distripark Plan 49

The absence or presence of these species should be determined through field assessments
conducted during the appropriate field season.

6.2.7 Elevated metals


Historic gold mining activity in the Waverly area has left an environmental legacy that may
need to be addressed during construction of Distripark. Mine waste was reportedly disposed
of in nearby lakes and watercourses, and waste rock was used for road and railway bed
construction JWA, July 2005). Elevated metals, including mercury and arsenic, may be
encountered along the existing railway bed and in watercourses and wetlands to be crossed.
Future fieldwork should seek to determine the presence of elevated metals in areas to be
disturbed and/or affected by increased storm water runoff flows, which have the potential to
re-suspend and disperse contaminated sediments.

6.2.8 Acid generating bedrock


The site is underlain by bedrock of the Goldenville Formation, which is known in some
locations to contain acid-bearing pyrites responsible for acid runoff. Rock samples taken
from an area along the rail line just south of the site in the mid 1990s showed quantities of
the acid producing sulphide below levels necessary to produce significant acid production.14.
Given potential sensitive features in downstream waters, it may be necessary to test for acid-
producing bedrock in areas requiring grading or exposure of the bedrock.

6.2.9 Archaeological resources


The NS Museum reports that there are no recorded archaeological sites known for the site
and that the area has low potential for historic and pre-contact archaeological sites.

6.3 Cost/benefit analysis

This analysis includes an assessment of the benefits and costs associated with the project,
was well as an overall assessment of the economic impacts of the development.

The financial model that is used in this analysis builds from previous work in the 2006
MariNova report titled “Trucking Options Study.”

With the reduction in city traffic as the main purpose behind this study, the specific options
under consideration were limited to a proposed new inland terminal (Atlantic Gateway
Halifax Distripark) and the use of a dedicated rail shuttle service that would move certain
volumes of container traffic by rail to a proposed terminal to be located within Phase 13 of
the Burnside Industrial Park.

The resulting overview of benefits and costs compares “doing nothing” with the option of
building a new inland terminal. Accordingly, financial considerations are expressed as a

14
UMA Engineering Ltd. “Relocation Feasibility Study: Downtown Dartmouth CN Rail Marshalling Yards,”
Phase I Report, 1995.

March 2008
Atlantic Gateway Distripark Plan 50

‘delta’ or change moving from the ‘doing nothing scenario’ to the “inland terminal option”
and the associated costs or savings attributed to that change in mode of operation.

The model used to assess the financial and economic impacts associated with the proposed
development includes the following elements:
! Distances Travelled – an assessment of the distances from significant commercial
and or distribution areas within HRM;
! Truck Volumes – an assessment of the volume of truck traffic in and out of the
major commercial and or distribution areas within HRM;
! Highway/Urban Distances – an assessment of truck distances that are within urban
areas (reduced speed through stop-and-go-traffic) and highway distances (highway
speeds); and
! Truck Distances Saved – the ‘delta’ in truck distances that result though the location
of the new inland terminal and the associated reduction and or elimination of both
reduced speed and highway speed distances that need to be travelled.

The model uses the above information to identify the:


! total handlings savings/cost;
! road maintenance savings/cost;
! truck operations savings/cost;
! net change in GHG emissions;
! net bridge operations/capital avoidance;
! net change in property values;
! net cost of terminal (capital);
! net cost of rail service (operating); and
! overall net cost increase (savings).

6.3.1 Assumptions
The following major assumptions were used in the development of the financial model:
Transload containers per week in year 1 400
High volume exports assumed to use facility 20%
Percentage of full container moves with empty leg 80%
Estimated percentage of empty moves that can be avoided 80%
Percentage of trucks to/from areas with benefit greater than 0 91%
Transload percentage requiring empty back to terminal 100%
Empty % market share from present empty yards 30%
Percentage of Transload from Ceres that is still trucked 50%
Handling costs at Ocean Terminals per move $35.00
Percentage of containers direct to/from rail 50%
Handling costs at HIT per move $45.00

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Atlantic Gateway Distripark Plan 51

Handling costs at AGD per move $25.00


Handling costs at AGD Tship on site per move $15.00
Effective turn around time at Ocean terminals 60
Effective turn around time at HIT per container 45
Effective turn around time at AGD 30
Value of truck time $30.00
Average distance saved per shortened truck move 9.1
Average cost per km $1.15
Cost per truck move $60.00
Growth rate for ocean terminal volume 3.5%
Growth rate for Distripark volume 7.5%
Average annual Consumer Price Index adjustment 2.2%
Discount rate for net present value calculations 5.0%
Weighted container growth (blend rate – Distripark and Ocean
Terminal growth) 4.87%
Percentage of trucks from Ceres (Original Distribution From Old
Study) 64%
Percentage of trucks from Halterm (Original Distribution From Old
Study) 36%
Number of terminal operation days per year (5 days * 50 weeks) 250
Average kms saved per shortened truck move 9.1
Note:
The entire analysis is framed in the context of the variance from the status quo, therefore,
there are no costs or benefits with the status quo.

6.3.2 Calculation of truck distance estimates


Table 8 provides the current (Status Quo) one-way distances distance from selected point-to-
point locations associated with significant transportation/commercial destinations in HRM.
For example, Halterm is approximately 13.3 kilometres from Burnside.

Table 8: Point-to-Point km [From (Col) to (Row)]

Bayers Other South


Burnside Lake HRM Truro Valley Shore
Halterm 14.5 13.3 4.3 60.1 24.7 15.8
Ceres 7.3 9.1 4.5 51.1 19.5 10.6
Richmond 7.7 11.1 2.5 53.1 21.5 12.6
Atlantic Gateway Halifax
2.0 16.4 13.0 47.6 7.0 18.0
Distripark (AGD)

March 2008
Atlantic Gateway Distripark Plan 52

Locations are defined as follows:


! Halterm – the Halterm gate;
! Ceres – the gate at Ceres;
! Burnside – Akerley & Isnor Dr;
! Bayers Lake – Costco entrance;
! Other HRM – Macdonald Bridge access;
! Truro – Exit 9 on 102;
! Valley – Junction of 101 and 102; and
! South Shore – Exit 3 on 103.

Distances are calculated as the best truck route based on expected travel time.

Table 9 shows the kms of the total distance that is travelled on low speed (restricted) roads.

Table 9: Restricted Speed Km's

Bayers Other South


Burnside Lake HRM Truro Valley Shore
Halterm 14.5 10.0 4.3 10.0 9.0 9.0
Ceres 7.3 6.0 4.5 3.0 6.0 6.0
Richmond 7.7 8.0 2.5 5.0 8.0 8.0
Atlantic Gateway Halifax
2.0 13.3 13.0 2.0 2.0 13.4
Distripark (AGD)

Table 10 shows the kms of the total distance that is traveled on highway speed roads.

Table 10: Highway Kms

Bayers Other South


Burnside Lake HRM Truro Valley Shore
Halterm 0.0 3.3 0.0 50.1 15.7 6.8
Ceres 0.0 3.1 0.0 48.1 13.5 4.6
Richmond 0.0 3.1 0.0 48.1 13.5 4.6
Atlantic Gateway Halifax
0.0 3.1 0.0 45.6 5.0 4.6
Distripark (AGD)

Table 9 and Table 10 are useful in calculating time and fuel consumption/GHG.

Table 11 shows the net change in distances based on the location of the proposed Atlantic
Gateway Halifax Distripark in Burnside (Phase 13) and the locations effect of reducing or
increasing point-to-point distances that must be travelled.

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Atlantic Gateway Distripark Plan 53

Table 11: Point to AGD Change km [From (Col) to (Row)]

Bayers Other South


Burnside Lake HRM Truro Valley Shore
Halterm (12.50) 3.10 8.70 (12.50) (17.70) 2.20
Ceres (5.30) 7.30 8.50 (3.50) (12.50) 7.40
Richmond (5.70) 5.30 10.50 (5.50) (14.50) 5.40
Atlantic Gateway Halifax
-- -- -- -- -- --
Distripark (AGD)

Locating the AGD in Burnside would remove 12.50 km from the current trip between
Halterm and Burnside. Likewise, the location of the AGD would also add 5.30 km to the
current trip between Bayer’s Lake and Richmond Terminal.

6.3.3 Restricted vs. unrestricted km


In this section, we present the impact of the AGD location on the utilization of restricted (city
streets) and unrestricted (highway speeds) road usage. The purpose of this analysis is to
inform the calculations of greenhouse gas emissions (saved or increased) in relation to
highway distances (added or removed) and city/street/stop and go distances (removed or
added).

Table 12 presents an analysis of the distances in terms of those that are AGD
reduced/increased distances that are on urban roads (reduced speeds and or stop-and-go
traffic).
Table 12: Restricted Speed Km's Difference from AGD

Bayers Other South


Burnside Lake HRM Truro Valley Shore
Halterm (12.50) 3.30 8.70 (8.00) (7.00) 4.40
Ceres (5.30) 7.30 8.50 (1.00) (4.00) 7.40
Richmond (5.70) 5.30 10.50 (3.00) (6.00) 5.40
Atlantic Gateway Distripark
-- -- -- -- -- --
(AGD)

The location of the AGD at Burnside would remove 12.50 km of city truck distance and have
no effect on reducing or adding highway distance (Table 13) for Halterm traffic. The AGD
location would also have the effect of reducing 8.0 km of city distances for cargo originating
at Halterm.

Table 13 presents those AGD reduced/increase distances that is traveled on highway speed
roads.

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Atlantic Gateway Distripark Plan 54

Table 13: Highway Kms

Bayers Other South


Burnside Lake HRM Truro Valley Shore
Halterm 0.0 3.3 0.0 50.1 15.7 6.8
Ceres 0.0 3.1 0.0 48.1 13.5 4.6
Richmond 0.0 3.1 0.0 48.1 13.5 4.6
Atlantic Gateway Halifax
0.0 3.1 0.0 45.6 5.0 4.6
Distripark (AGD)

6.3.4 Calculation of rail distance estimates


Table 14 provides the new rail distance from selected point to the new Distripark (AGD) as
one way distances.
Table 14: Rail shuttle km point to AGD

Bayers Other South


Burnside Lake HRM Truro Valley Shore
Halterm 18.60 18.60 18.60 18.60 18.60 18.60
Ceres 14.10 14.10 14.10 14.10 14.10 14.10
Atlantic Gateway Halifax
- - - - - -
Distripark (AGD)

As shown, distances are expressed in km of rail from the three terminals to proposed AGD
(one way distances).

All tables above are used to calculate the impact of the new location on rail shuttle services,
truck operations, handlings and the impact of the change on GHG emissions.

6.3.5 Truck volume and distribution of truck traffic


Table 15 is based on the previous study (the 2006 Inland Terminal and Trucking Options
Report) and highlights the expected annual truck traffic to the selected transportation nodes.

Table 15: Annual Truck Volumes

Bayers Other South Total


Burnside Lake HRM Truro Valley Shore Truck
Halterm 4,550 853 284 15,750 3500 1,313 26,250
Ceres 7,973 1,495 498 27,600 6,133 2,300 46,000
Richmond/HIT 10,400 1,950 650 n/a n/a n/a 13,000
NIT (formerly Quarry) 22,923 4,298 1,433 43,350 9,633 3,613 85,250
Total 45,847 8,596 2,865 86,700 19,267 7,225 170,500

March 2008
Atlantic Gateway Distripark Plan 55

Table 16 shows the percentage distribution of truck traffic from the ocean terminals from the
previous study. The same proportion was used for the calculations in this report except that
the transload volumes were added.

Table 16: Percentage of Trucks from Source (Original Distribution from Old Study)

Bayers Other South Total


Burnside Lake HRM Truro Valley Shore Truck
Halterm 6% 1% 0% 22% 5% 2% 36%
Ceres 11% 2% 1% 38% 8% 3% 64%
Richmond n/a n/a n/a n/a n/a n/a
Total 100%

Table 17 provides the number of trucked container moves that would be saved in year 1 of
the operation of the proposed AGD.
Table 17: Number of Trucked Containers Saved Per Year

Bayers Other South Total


T/Load Burnside Lake HRM Truro Valley Shore Truck
Halterm 14,533 2,492 8,625 1,917 27,566
Ceres 19,100 4,366 15,114 3,359 41,939
Total 69,506

This assumes that 100% of an estimated 20,000 containers for transload would be shipped to
the Distripark by either rail (13,633) or by truck (6,357) and that all empties would be stored
at the Distripark. This assumes little commercial reason for Bayers Lake and “Other HRM”
to use the facility.

Port traffic that is destined for “Other HRM” and Bayer’s Lake will not benefit by using the
new Distripark. For example, cargo arriving at Halterm and destined for Bayer’s Lake will
leave Halterm and go to Bayer’s Lake directly, without passing through the Distripark. (It is
assumed there will not be any regulation compelling shippers to use the shuttle, hence the
commercial decision would likely see the direct shipment of cargo to Bayer’s Lake.

6.3.6 Truck distance savings


The resulting truck distance savings are summarized in the following tables. Table 18 shows
that the new terminal will remove nearly 575,000 truck kilometres in year 1 from city streets.

March 2008
Atlantic Gateway Distripark Plan 56

Table 18: Percentage of Trucks from Source (Original Distribution from Old Study)

Bayers Other South


Burnside Lake HRM Truro Valley Shore Total
Halterm (213) -- -- (108) (34) -- (355)
Ceres (124) -- -- (53) (42) -- (219)
Richmond -- -- -- -- -- -- --
Total (337) -- -- (161) (76) -- (574)

The average truck move is shortened by 9.1 kilometres. Urban truck km travelled is reduced
by 448,000 (Table 19) while highway truck kilometres are reduced by 126,000 km in year 1
(Table 20).

Table 19: Reduced Speed Truck Kilometers Difference (thousand)

Bayers Other South


Burnside Lake HRM Truro Valley Shore Total
Halterm (213) -- -- (69) (13) -- (295)
Ceres (124) -- -- (15) (13) -- (153)
Richmond -- -- -- -- -- -- --
Total (337) -- -- (84) (27) -- (448)

Table 20: Highway Truck Kilometres Difference Reduced (thousand)

Bayers Other South


Burnside Lake HRM Truro Valley Shore Total
Halterm -- -- -- (39) (21) -- (59)
Ceres -- -- -- (38) (29) -- (66)
Richmond -- -- -- -- -- -- --
Total -- -- -- (77) (49) -- (126)

6.4 Model results

Figure 26 shows the model predicted growth of annual truck moves and the project share of
truck traffic that may be removed from city streets as a result of truckers not having to enter
into the City to pick-up and drop off containers.

The total year truck avoidance potential represents 40.5% of all truck traffic currently
associated with ocean terminal activities, Distripark activities and empty yard storage –
roughly 300 trucks per day. By the 20th year of the projection, the Distripark will be diverting
up to 49% of this traffic – 606 trucks per day.

March 2008
Atlantic Gateway Distripark Plan 57

Figure 26 – Growth in Truck Moves

Growth in Truck Moves &


Projected Share Removed From City Streets

500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
09

10

11
12

13

14

15
16

17

18
19

20

21
22

23

24

25
26

27

28
20

20

20

20

20

20

20

20

20

20

20

20

20
20

20

20

20

20

20

20
Total Trucks Removed or Shortened Total Trucks Involved in Terminal Moves

Figure 27 shows the total trucks, trucks removed or shortened and the percent of total trucks
that are removed or shortened as a result of the AGD.

Figure 27 – Percent of Intermodal Trucks Removed or Shortened

Growth in Truck Moves & Projected Share Removed From City


Streets

500,000 60.0%
450,000
50.0%
400,000
350,000
40.0%
300,000
250,000 30.0%
200,000
20.0%
150,000
100,000
10.0%
50,000
0 0.0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Total Trucks Involved in Terminal Moves


Total Trucks Removed or Shortened
Percent of Intermodal Trucks Removed or Shortened

March 2008
Atlantic Gateway Distripark Plan 58

6.4.1 Impact of truck distance – truckers


Because of the reduction in trucks km, benefits to truckers accrue following construction and
at the point the facility becomes operational. The benefits of the mileage reduction are
summarized in Table 21. Looking at average operating costs per truck KM for:

Table 21: Savings to Truckers (thousand)


Truck Operating Truck Operating
Savings Savings – NPV
Year 1 $(677) $(725)
Year 10 $(1,263) $(7,080)
Year 20 $(2,526) $(15,775)

Truckers will save approximately $700,000 in operating costs during the first year that the
facility is built. Over the course of the 20 year projection, the truckers will save the total net
present value of just under $16M.

6.4.2 Impact of road wear and tear


Table 22: Theoretical Savings on Road Wear and Tear

Year 1 Year 10 Year 20


Per Year Savings Km of City Streets Freed $(24,237) $(24,237) $(25,418)
(2009 Dollars) Km of Highway Freed $(22,858) $(22,858) $(23,971)
Total Freed $(47,095) $(47,095) $(49,389)
Cumulative NPV Km of City Streets Freed $(24,237) $(229,566) $(456,349)
Km of Highway Freed $(22,858) $(216,502) $(430,378)
Total Freed $(47,095) $(446,068) $(886,728)

The reduction in road surface wear and tear through truck traffic reduction provides a
theoretical cost avoidance of 47,000 per year. The NPV of the reduced/increased wear and
tear over the 10 year projection is just under $900K.

6.4.3 Congestion
The reduction in truck traffic will increase road capacity based on a car equivalent of 2.5
cars/ truck. Based on this, the new Distripark would have the Year 1 effect of removing
130,000 trucks and allowing for added automobile capacity of 325,122 cars.

March 2008
Atlantic Gateway Distripark Plan 59

Figure 28 – Congestion and Car Equivalents Freed

Total Trucks Removed per day and Car Equivalent

600

500

400

300

200

100

-
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Total Trucks Removed or Shortened Car Equivalent Space Avaliable

6.4.4 Handlings – cost/(savings)


Total savings within the Distripark are estimated at $1.1M in year 1, growing to $6.2M by
year 20 with a net present value of savings of $33M for the 20 year period. Figure 29 shows
the per container savings over time, as the projected volume of throughput/moves increases.

Figure 29 – Net Annual Savings

AGHD Annual Net Handling Savings

$6,000,000

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Net Annual Handling Savings

6.4.5 Net GHG emissions – increase/(reduction)


Impacts on Greenhouse Gas (GHG) emissions for the proposed rail system from Burnside to
Halterm and Ceres are estimated. The reduction in truck kilometres traveled will result in an
emissions savings while the locomotive used to move the freight will add emissions from the
diesel engine exhaust.

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Atlantic Gateway Distripark Plan 60

The air emission impact assessment was based on the following data and assumptions:
! the use of rail transport will reduce the truck kilometres traveled by 337,000 kms
annually;
! the truck kilometres savings are associated with reduced speed kilometres (assumed
to be 20 mph on average);
! the annual rail traffic is 250 trips per year (one direction);
! the average train speeds are 15 mph (25 kph);
! each train has two locomotive engines attached;
! the locomotives are diesel-electric hybrid (model GP38) rated at 2000 Hp; and
! the locomotive engine emissions and fuel consumption are based on an average notch
setting of 2.

The primary contaminants associated with tailpipe emissions that contribute to GHG
emissions and global warming are carbon dioxide (CO2), methane (CH4) and nitrous oxide
(N2O). These compounds along with water vapour and ozone are naturally occurring
greenhouse gases and these compounds are continuously emitted to and removed from the
atmosphere by natural processes. For this impact assessment, only these compounds that are
produced as a result of fuel combustion are considered.

Appendix I of Canada’s Greenhouse Gas Inventory 1990 -1999 provides emission factors for
GHG emissions from mobile combustion sources. These emission factors are provided in
units of grams of pollutant per litre of fuel burned for a range of on-road vehicle types from
light duty gas automobiles to heavy duty diesel vehicles. This foundation paper also provides
emission factors for off-road vehicles, including diesel rail transportation, which were used
for this assessment.

To apply the emission factors to the truck-kilometres saved and rail-kilometres added, an
estimate of fuel economy is required. From a report entitled “Energy Savings through
Increased Fuel Economy for Heavy-Duty Trucks”, American Council for an Energy-Efficient
Economy, February 11, 2004, a fleet-wide fuel economy for tractor-trailers of 5.3 miles per
US gallon was obtained. For the increase in rail transportation, a report entitled “Influence of
Duty Cycles and Fleet Profile on Emissions from Locomotives in Canada”, Robert Dunn,
Consultant in Railway Fuels, Lubricants and Emissions, June 2002, provided fuel
consumption for various locomotives and duty cycles and for each locomotive throttle
position. Dillon used fuel consumption data for a SD-40 train (3000 Hp) at throttle position 2
and traveled at an average speed of 15 mph (25 kph) over the entire trip. The corresponding
fuel consumption is 154 lbs/hr. However, fuel consumption data was provided for these 2000
hp locomotives at idle and full throttle positions. This data showed a fuel consumption of
approximately one-half of the SD-40 fuel consumption data. As a result, a factor of 0.5 was
applied to the SD-40 fuel consumption data for notch 2.

The total number of locomotive trips per day (each direction) was (250/365) = 1.37. The one-
way travel distance from Burnside to Halterm is 18.6 km and from Burnside to Ceres is 14.1
km which on an annual basis equates to approximately 3.6 hours per day of rail travel.

March 2008
Atlantic Gateway Distripark Plan 61

The following table summarizes the annual GHG emissions associated with each
transportation option. The total GHG emissions, expressed as CO2-equivalents, are obtained
using the 100-year global warming potentials (GWPs) for CO 2, CH4 and N2O of 1, 21 and
310, respectively. The calculation for CO2-equivalents is:

Tonnes CO2 Eq. = (Tonnes CO2 x 1) + (Tonnes CH4 x 21) + (Tonnes N2O x 310)

Results are provided for the savings in truck travel and increased use of rail travel as well as
the net impact. Bracketed values represent a net savings in GHG emissions.

Figure 30 – Summary of Net Annual GHG Emissions

Option ER (CO2 ) ER (CH4 ) ER (N2 O) ER (CO2 Eq.)


(tonnes/yr) (tonnes/yr) (tonnes/yr) (tonnes/yr)
Burnside to Halterm
Reduced Truck Travel (393) (0.02) (0.01) (397)
Increase Rail Travel 84 0.00 0.03 95
Net Emissions (309) (0.02) 0.02 (302)
Burnside to Ceres
Reduced Truck Travel (229) (0.01) (0.01) (231)
Increase Rail Travel 64 0.00 0.03 72
Net Emissions (165) (0.01) 0.02 (159)

With respect to other air contaminants associated with diesel engine emissions, the use of rail
travel instead of truck travel was estimated to result in a small increase in oxide of nitrogen
emissions of 0.9 tonnes/yr but a saving in carbon monoxide and hydrocarbon emissions of
2.2 tonnes/yr and 0.3 tonnes/yr, respectively, for the combined travel routes. These emission
calculations were also based on the SD-40 locomotive emission factors with a 50% reduction
factor applied for the use of diesel-electric hybrid locomotives.

6.4.6 Bridge operation – increase/(reduction)


Interviews with the Halifax Dartmouth Bridge Commission reflected interest in the potential
reduction in truck traffic and the potential impact of this reduction in extending the
replacement cycles for the wearing surface and the substructure. Class 4 truck traffic
represents about 3% of all crossings (two-way) – about 60,000 crossings per year. A
reduction in truck volume would negatively impact bridge revenues but this has the potential
to be more than offset by an extension of the lifecycle of bridge infrastructure (and the added
benefit of decreased congestion. At the time of this writing, these aspects of the potential net
savings are still being explored. We estimate removal of between 40% and 50% of all class 4
from the Bridge, although the majority of these trucks are expected to be empty containers.

6.4.7 Net change in property values


Changes in property values are expected in the area of Lower Water Street and Hollis Street
as a result of reduced truck traffic. Improved vales are expected as a result of actual
escalation in property values and shorter listing times. However, because of difficulties in
assessing the actual value of these impacts, the benefits are not included in the financial
analysis.

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Atlantic Gateway Distripark Plan 62

7.0 Financial Projections of Revenue and Expense


System wide, current terminal operations are estimated to cost $9.1M per year (Year 1). The
effect of the AGD is to reduce this cost by:
! reducing more costly truck transportation in favour of lower cost shuttle movement of
containers;
! reducing truck wait times, and therefore increasing efficiency of trucking operations,
and reducing trucking distances; and
! shifting handling from the higher labour/operating cost associated with the ocean
terminals (estimated at $35 per move) to the lower operating cost associated AGD
(estimated at $25 per move).

The following presents the system wide summary of the costs and benefits in relation to the
stakeholders to whom the benefits/costs accrue.

There are three “business categories” assessed in the financial model of the proposed
Distripark. These business categories include:
! Ocean Traffic, which is made up of:
! Full containers from ship to truck or truck to ship
! Empty containers to from terminals
! New Transload Activity – two way moves associated with transload activity
! Empty Yard storage activity - assumed as a share of exiting MT yard storage that
will be captured by the new AGHD

A fourth area of activity that will be presented relates to Truck Wait Times.

The total number of moves across these business categories is estimated at 183,823 container
moves for year 1 operations of the new AGD.

The 183,823 container moves are comprised of:


! Ocean Traffic Volumes which includes:
! 95,500 in baseline (year 1) annual container volume (fulls)
! 36,290 in empty moves (38% of fulls)
! Transload Activity which includes:
! 20,000 in full New transload activity and a balanced volume (20,000) in empty
transload moves (Year 1)
! Empty yarding, which is comprised of:
! 12,033 in empty yard storage based on an assumption that 30% of the market
share will be captured from existing empty yards (Year 1)

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Atlantic Gateway Distripark Plan 63

The new AGD is expected to impact the system by:


! changing the way in which containers are handled at the ocean terminals;
! changing the way in which containers are transported to and from the ocean terminals
and to and from the new AGHD; and
! adding new moves associated with the new Distripark.

7.1 Ocean terminal activity

The net impact on Ocean Handling Terminal Costs is a savings of $422,698. This is driven
by:
! 9,550 (10%) of fulls are converted to rail and incur additional handling charges and
truck distance is shortened – the 9,550 moves add cost to the system of $115,000 in
handling (do to an assumed 10% of ocean traffic converted to the shuttle and
therefore additional handling operation at the terminal); and
! 36,290 empties are handled by truck (9,968 moves) or are saved (26,322 container
moves are avoided by leaving empties at the AGD, 9,968 are returned to the terminal)
for a decrease in operating costs of $537,907.

The net savings of $422,698 arises because the majority of the empty moves are saved (these
containers do not need to go back to the ocean terminal).

7.2 New distripark activity

The Net Impact on Transload Activity results in a net savings of $1.14M as a result of:
! 13,633 containers are moved by shuttle to the AGD, while 6,367 (the balance) are
shipped from the terminal by truck, shorting trucking distance, and therefore
operating cost by $142,000; and
! 20,000 in balancing empty moves are saved (these do not need to be returned to the
terminal), resulting in the avoidance of $1.2M in trucking costs.

The net savings of $1.4M savings arises because trucks distances are shortened and/or
eliminated.

7.3 Empty container yard activity

Existing Empty container yards are expected to be unaffected by the Distripark in terms of
system-wide financial gains or losses.

7.4 Truck wait time

A final source for savings in the movement of container volumes is in the area of truck wait
time. By assuming that the effective turn around time at Ocean terminals is 60 minutes and
the effective turnaround at the AGHD is half of this, the cost of truck wait time will be
reduced by $731,754 based on an assumed value of truck time of $30.00 per hour.

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Atlantic Gateway Distripark Plan 64

7.5 Cost terminal operations

As described earlier, the costs associated with the rail operations are largely fixed and
increase little with increasing volumes. Because of this, the per-unit cost of shuttle operations
falls as volume increases. Table 23 below provides a summary of the operating costs
associated with the AGD, based on 71 containers per day. These costs compare favourably to
handling costs at ocean terminals in Halifax and HIT.

Table 23: Terminal Operating Costs


Terminal Costs Costs
Terminal Lift cost $25.00
Containers lifted 71
Daily Lift costs $1,775
Operating days per year 250
Total Annual operating Costs $443,750

The $14.5M terminal will cost (at 71 containers per day) just under $450,000 per year to
operate.15

7.6 Summary of net financial impact

The total savings from Handling is expected in the range of $2.3M in year 1 and $7.1M by
year 20.

The shuttle cost will add an average of $1.2M per year, leaving a net handling savings of just
over $1.1M in year 1 and $5.9M by year 20 (with a NPV of $33.3M).

Figure 31 summarizes the business categories and the detail driving the net savings.

15
Capital costs of the terminal construction are viewed in this analysis as a sunk cost – equivalent to a normal city
development process and would be covered by the city in the same way that industrial lands would ordinarily be
developed (e.g. city would develop and sell/lease land). Terminal Equipment is priced in section 4.1 at $4.4M and is
included in the $25.00 per lift charge used to estimate the system wide savings/costs. This factor includes everything
expect the cost of land and the cost of developing the terminal itself. The optional connector for the Distripark entrance
is estimated at $6M and is related to the optional LCV development. This cost is not included in our analysis of net
costs and savings resulting from the AGD.

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Atlantic Gateway Distripark Plan 65

Figure 31 – Summary of Handling Savings/(Costs)

Detailed Plot of Net Handleing Savings/Costs

$1.200

$1.000

$0.800

$0.600
Millions

$0.400

$0.200

$0.000
Containers ship- Empty containers to Transload Transload empties MT yards Truck waiting time
truck or truck ship from terminals containers cost
($0.200)

The handling costs and savings are provided in detail in the following table.

Table 24: Summary of System-wide Costs and Benefits (thousands)

Costs/Savings at NPV Of Costs/


Year 1
Direct Financial Savings - Savings at 20
Operator Savings ($000s) Years ($000s) Potential Beneficiaries
Ocean Terminal Activity
Full Containers (ship-to-
truck or truck-to-ship) $(115) $(1,921) Shippers, truckers, rail
Empty containers (to/from operator
terminals) $538 $8,968
Distripark Activity
Transload containers $40 $962 Shippers, truckers, rail
Transload empties $1,100 $26,443 operator
MT Yard Activity
Shippers, truckers, rail
MT yards 0 0 operator, AGD operator
Truck Wait Time Truckers,
Truck waiting time cost $732 $13,778 Shippers/customers
Total Savings $2,294 $48,229
Less Annual Shuttle Cost $(1,201) $(14,963) Rail Operator
Net Handlings
Savings/(Costs) $1,094 $33,266 All of the above

The net savings as a result of the AGDH is estimated at $1.1M per year, including all
handling, rail, trucking and terminal operation costs.

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Atlantic Gateway Distripark Plan 66

Table 25: Other System Savings (thousands)


Costs/Savings NPV Of Costs/
Indirect Financial Savings - at Year 1 Savings at 20 Potential
Operator Savings ($000s) Years ($000s) Beneficiaries
HRM/HRM
Reduction in Road wear and tear $47.10 $446.07 Taxpayers
16
GHG Emissions $8.4 $144 Everyone

Figure 32 expresses the savings per railed container. Year 1 savings per railed container are
$40/container and by Year 20, $55.00 per container.
Figure 32 – Savings Per Railed Container

Operating Savings Per Railed Container

$60

$50

$40

$30

$20

$10

$0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Figure 33 shows the total savings, comprised of total transload savings and total savings from
empty exchanges.

16
The per tonne value of GHG emissions was based on a range of $9.00 to $10.00 from the previous study (2006
Inland Terminal Study). We have seen estimates as high as $95.00 per tonne of carbon alone.

March 2008
Atlantic Gateway Distripark Plan 67

Figure 33 – Savings over Time By Source of Savings

Savings Over Time, by Source of Savings

$7,000,000

$6,000,000

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Total Transload Savings Total Empty Exchange Savings Total Savings

Overall, the AGD would costs $14.5M to build, $440,000 per year to operate and would
generate a net savings to the system of $1.1M through all sources (that could be estimated) –
road cost reductions, net handling cost reductions, net reduction in truck operations, net
reduction in road maintenance and net reduction in GHG emissions. The 20-year NPV of this
savings is on the order of $33.3M, at a discount rate of 5%.

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Atlantic Gateway Distripark Plan 68

8.0 The Value Proposition


The new concept has many benefits to a number of critical stakeholders.

8.1 Halifax Port Authority

This new concept provides an opportunity for the port to promote transload activity, and thus
cater to the sector of its market which is expected to grow substantially.

The main concern of the Halifax Port Authority is that a project such as NIT at Rocky Lake
could lessen its competitive position by adding costs. The concept of AGD is that the cargo
would choose the least cost option of existing routings or the AGD.

As mentioned above, it is an investment opportunity for the port, similar to the Vancouver
Port Authority’s investment in Coast 2000.

The Distripark terminal also removes trucks from the downtown and emerging Seaport
cultural and tourist district, as well as Lower Water St.

8.2 Halifax Regional Municipality

The benefits to HRM in general are in several areas:


! removal of some truck traffic from downtown;
! decrease in wear on the road infrastructure;
! increase in property values and desirability of downtown; and
! reduction of GHG emissions and noise pollution in downtown area.

8.3 Downtown Halifax

Benefits to downtown Halifax relate to the removal of some truck traffic from Hollis and
Water Streets and the corresponding enhancement of the urban aesthetic. Removal of truck
traffic and the decrease in noise and air pollution at street level is compatible with the
increasing demand for residential and office space downtown, and the desire by residents and
businesses in HRM for a revitalized core. Less truck traffic would obviously create more
pedestrian-friendly streets, and would enhance HRM’s ability to achieve goals under “HRM
by Design”.

8.4 CN

Halifax is a key terminal for CN, being the eastern terminus for CN as well as the closest
North American mainline rail-served Port to Europe and India. CN is one part of this delivery
chain. This natural advantage for container traffic has played well for CN in the past and CN
is looking to maximize its traffic in this area where there is no real rail competition. However
for international container traffic this very advantage in time is also a cost and distance
disadvantage on the land portion of the container delivery chain. The Port of Halifax is much

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Atlantic Gateway Distripark Plan 69

further than New York and other US Eastern seaboard ports to the US Midwest and even
Toronto.

As with all railways, CN requires significant traffic volumes to offset high fixed overhead
and track infrastructure costs. CN Halifax has been negatively impacted by a Canadian dollar
now on par with the US dollar, coupled with the ability of Eastern US ports to handle more
container traffic. This in turn has lead to a decline in vessel callings at Halifax in recent
years, and its related rail traffic to Montreal/Toronto, Chicago and beyond. Lower traffic
levels through Halifax puts more pressure to reduce rail service offerings in order to maintain
sufficient operating levels.

CN is well aware of this problem. The best rail service offerings are influenced by volumes
and as such CN is looking for ways to significantly increase traffic through the Atlantic
Gateway. Since the matching of volumes arriving by vessel and train size is a considerable
problem operationally as well as from a logistics perspective, the larger the number of vessel
calls at a given port, the better the traffic will flow to and from rail. For example trains
operate daily in order to maximize car utilization. Shipping lines do the same with their
vessels. However semi-weekly or weekly vessel calls, with large container volumes that
exceed 500 containers, are not a good match for a daily train service. In this case containers
are transferred and piled on the ground, either waiting for trains or for vessels, resulting in
delays, and extra handling costs.

The service common denominator between ship and train is best reached when ships have
daily callings and daily train service expands to fill this need. If vessels call on Halifax twice
a week with 3 days worth of import container train volume, import traffic can be delayed at
the port for up to 3 days at the port. Unlike Halifax export traffic which is of less value and
can arrive at the Port on the days before the vessel calls, the Halifax import traffic, on the
other hand represents the most value, and drives the Halifax time-value advantage. Therefore,
the cost of the delivery chain increases as vessel callings lessen, and nether the shipping lines
or railway are in position to minimize overall costs if they make up for the imbalance with
extra vessels or extra rail cars.

8.5 Distripark and transload

CN sees opportunities for their domestic traffic related to the international container business.
Halifax and Atlantic Canada tend to be net importers of domestic goods from Central
Canada. Unlike trucks that can operate trips in a triangular basis and reduce their overall
empty miles (i.e. Central Canada – Maritimes – US Northeast – Central Canada), CN runs an
East/West operation and is disadvantaged in finding goods to fill the return domestic trips
from the Halifax area to Central Canada.

However, the advantage of domestic containers is that they are able to carry significantly
more goods per container than the usual marine ISO containers. This ratio can be as much as
2.5 TEUs for every 53 ft container depending upon the product being moved. This is not only
a cost advantage for moving goods per container, but it also represents a quick turnaround for
the international container at Halifax. A significant amount of the domestic CN Halifax
containers already involve transloading either international containers or local trucks with
loaded with product from the region. CN is interested in any plans which would reduce the
cost of transloading and or moving product through the delivery chain. They have announced

March 2008
Atlantic Gateway Distripark Plan 70

they are looking into the construction of a new transload facility on CN property near their
HIT domestic terminal. Their main cost advantage would come in having such a transload
facility near to HIT.

We have proposed to CN they investigate the synergies of relocation of the HIT facility to the
proposed Distripark, precisely to take advantage of the proposed transload infrastructure,
which is discussed in detail in Chapter 4. We also suggested they look at the new terminal
and possible synergies with the Dartmouth rail yard which is currently located in downtown
Dartmouth. At this time CN have not taken a position on this proposal and are investigating
the merits of same.

8.6 Shuttle train

The transhipping of containers and in particular the loading of the empty international
containers at Halifax with export product is also an opportunity for additional rail revenues.
As explained in Chapter 4, the reduction of truck miles in and round Halifax and associated
cost avoidance, road wear and tear, environmental emissions point to a better way to move
containers on a commercial basis between the proposed Distripark and the Port Terminals. In
particular, reloaded export containers can tend to move in large numbers and finding enough
drivers at times to meet vessels sailings can be difficult.

It is recognized that this type of rail shuttle operation is an unusual train operation for CN,
which derives most of its revenues from providing long haul rail service. Nevertheless, CN
has agreed to review the proposal and provide a response once the study is completed.

8.7 Terminals

The inland port concept as originally proposed could only benefit the container terminal
operators by increasing their effective capacity and thus postponing the need to construct a
third container terminal in the Port of Halifax. The value of this could only be realized if and
when the additional capacity were required, since only then could the additional handling
costs be offset by the capital avoidance of building a third terminal.

The AGD will allow transload cargo to be handled more efficiently and reduce the number of
intermodal trucks on city streets.

It promises an overall cost savings rather than an additional expense in the long term and the
benefits increase with volume. It would compete with alternate methods of local cargo
transportation and thus only be chosen when the benefits outweigh the drawbacks.

Transload cargo has been the fastest growing segment of container traffic in the port and is
expected to drive growth for the foreseeable future.

8.7.1 Reduced empty handling at the terminal


The location of the AGD and its extended hours of operation will favour the storage and
distribution of empty containers from that location rather than from the existing container
terminals. Much of the existing empty handling at the terminals could be eliminated.

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Atlantic Gateway Distripark Plan 71

8.7.2 Conversion of loads from truck to rail


The transload import cargo (full containers) would be able to leave the terminal (in bulk) by
rail. Some of these containers could be handled directly from ship to rail thus avoiding an
extra handling. Others, that would need to be grounded, would benefit from the ability to be
loaded out in bulk (first come first serve) to rail rather than individually to truck as is the case
presently.

Similarly, the export cargo could be grouped (segregated) by ship to minimize the handling
requirements on arrival.

8.7.3 Truck gates


As the number of trucks handled at the existing terminals is reduced, the queues should also
reduce and consequently the waiting time. In particular, the longer haul truckers arriving in
Halifax overnight would have an advantage in exchanging containers at the AGD.

8.7.4 Dwell times


Most of the transload containers would be moved to the ADHD on arrival as long they were
cleared to leave the container terminal. This will liberate some storage space and should
result in less digging for containers delivered to truck from the terminals.

8.7.5 Empty storage


The AGD should attract much of the empty handling and storage activities, thus liberating
valuable space on the terminals.

8.7.6 Revenue
While the storage and handling of empties uses up some capacity on the terminals, it is also a
source of revenue which is not necessarily offset by a savings unless the capacity it liberates
is required.

8.8 Shipping lines

Shipping Lines are the primary contractors for transportation of ocean containers; most other
service providers are sub-contractors to the shipping lines. They control most, if not all of the
routing of a container from origin to destination and generally own or lease the containers.

As the general contractor for the transportation of the container between the shipper and the
consignee, they must pay the costs of transportation and handling activities out of the revenue
they generate from the container shipment. Any extra expense associated with the movement
of the cargo is generally borne by the shipping line; likewise, any savings can improve their
efficiency and the contribution per container.

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Atlantic Gateway Distripark Plan 72

8.8.1 Transload cargo


Transload activity is a relatively new phenomenon for Halifax; the Port of Halifax has
promoted this concept for a few years and private sector transload operators have recently
invested in facilities. By 2009, the transload volume is estimated to reach 400 full containers
per week, or approximately 40,000 TEUs, since most of the containers would be 40 fts. This
is close to 15% of the total TEUs through the port. These containers become part of the local
market and make it more interesting for shipping lines to call Halifax.

As long as the use of rail to move the containers to the AGD is market driven and optional to
the shipping line or whoever controls this segment of the transportation train, the shipping
lines could benefit from the AGD in regards to the transload cargo. Additionally, the cost of
moving the empties generated from the import transload back to the existing terminals can, in
large part, be avoided.

8.8.2 Handling and storage rates


As the primary customers of the container terminals, the shipping lines enjoy favourable
handling and storage rates at the container terminals. Stevedoring rates tend to be based on
throughput (from the ship to the truck or rail and vice versa) and can even include the
handling of the empty containers associated with shipboard moves. Even throughput rates are
based on an expected mix of business and handling process and the rate is reflective of the
entire costs divided by the number of shipboard moves rather than of the cost of the
individual moves. The rate is simplified by using an average rate rather than creating a
plethora of individual rates.

Similarly, a certain amount of “free” storage is provided at the terminals for full and empty
containers. The amount of free storage allowance and the cost for storage beyond the free
period/amount is negotiated along with the throughput rates and is generally based on the
shipping line’s needs and past history of volumes, mix of business etc.

The shipping lines could benefit from certain services offered by the AGD, but would need to
change the structure of their rates to fully benefit from its use. Under the present rate
structure, the shipping line could be required to pay the additional costs without realising all
of the offsetting savings.

8.8.3 Empty containers


The shipping lines could benefit from the extended hours for trucks to pick-up and drop off
containers although the single rate structure for truck hauls within the Halifax area works
against this to some degree. The empties generated from the import transload can certainly be
despatched from the AGD and empty exchanges lines would have to pay for could occur at
the AGD.

In order to maximize these empty to empty exchanges, the full to full export-import
exchanges will have to be maximized at the existing terminals, since full empty and empty-
full exchanges will likely continue to be handled at the existing container terminals.

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Atlantic Gateway Distripark Plan 73

More empty-empty exchanges handled at the AGD will result in fewer trucks at the container
terminals, less queuing and presumably better turnarounds.

8.8.4 Export consolidation


The AGD will act as a common-user empty yard, not affiliated with a specific trucking
company or service provider. In this regard, it will compete with the existing empty container
yards in the greater Halifax area, although there could be the possibility of those operators
investing or participating in the operation of this terminal. It is also foreseen that the AGD
would act as a container repair facility and possibly as a container leasing depot. As an empty
yard, the AGD would shorten the haulage distance for containers originating from or destined
to the following general areas:
! Burnside Industrial Park;
! Valley destinations; and
! destinations in the direction of Truro and beyond.

8.8.5 Consolidation of export


Shipping lines could benefit from the consolidation of certain high volume commodities such
as pulp and paper, so that a lager booking could serve as top-up cargo made once space is
deemed available. To some degree, this occurs now but the AGD would facilitate this by
reducing the lead time between the booking and the containers arriving at the terminal for
loading.

8.8.6 Other services (container leasing and repair)


The local market served by the port of Halifax has traditionally been an export market
although the increase in transload cargo will contribute to balance loads or even reverse the
situation over time. A leasing company that would use the AGD as a base would have their
containers available where they are likely to be needed for exports, sometimes at the last
minute.

Similarly a well organised container repair facility could complement the AGD’s other
activities and the shipping lines would have another supplier to choose from for these repairs.

8.9 Truckers

The proposed development offers a number of positive benefits to truckers through the
reduction of distance traveled and access to a more efficient and more accessible intermodal
terminal. The benefits to truckers accrue through the following:
! Shorter distance traveled – truckers whose pick-ups would normally be at the ocean
terminals have the option to pick these up at the inland terminal and therefore avoid
travel to the ocean terminals. This results in:
! less fuel consumption;
! less wear and tear on trucks and tires;
! less operator/labour time;
! shorter turn around for a pick-up; and

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! other benefits include the effects of truck trip redistribution on the generation of
greenhouse gases through the reduction of vehicles idling as a result.
! a reduction in traffic conflicts through reduced traffic congestions leading to lower
emission from both trucks and automobiles; and
! lower emissions as a result of more efficient short-haul transport.

We spoke with some truckers who were (anecdotally) interested in the possibilities presented
by an inland terminal located in Burnside with rail access. Truckers saw the potential benefits
for distripark and transload activities and the synergies that are possible with exiting services
within Burnside. They also acknowledged that the decision to move forward with this option
would be driven by the shippers.

8.10 Shippers

Shippers are the ultimate customers of the transportation cycle as a whole. Ultimately, they
bear the total cost of moving cargo from origin to destination. Since the use of the AGD is
optional and market driven in competition with existing practices, the AGD will only be
considered when the overall benefits outweigh the costs of its use in the transportation cycle.

8.10.1 Transload
Transload activity is estimated to attain 400 full containers per week by 2009 and it is
expected to grow at an accelerated rate of approximately 2 times the growth rate of the local
market for the foreseeable future. A major component of the AGD’s concept is that transload
facilities would be located on the perimeter of the AGD such that the AGD would be in their
back yard. At present, transload containers are trucked to the transload facility and the
container is returned to the container terminal as an empty in almost all cases. The use of the
AGD would allow the empties associated with the transload cargo to remain on site and thus
save the additional trucking cost.

8.10.2 Access to cargo


For those containers moved by rail to the ADHD, the cargo would be available to the
transload facilities on a continuous basis and under their control without having to use public
roads. The AGD would, in practice, serve as the transload facility’s cargo storage area.
Because there is no gate move associated with the unloading of the containers, containers
could be yard-shunted to and from the perimeter facilities as required by the operator of the
transload facility.

8.10.3 Scheduling
The extended hours of operation of the Distripark facility would allow more flexible
scheduling of container pick-up and delivery and the continuous operation of the truck
operation at the AGD would minimize queuing times. Distripark transload operators could
tailor their hours as their customers demand. The effective (including queuing) wait times at
the AGD would be significantly reduced as would be the variability of the truck turnaround
times.

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8.10.4 Common-user empty yard


The AGD will act as a common-user empty yard, not affiliated with a specific trucking
company or service provider. In this regard, it will compete with the existing empty container
yards in the greater Halifax area. It is also foreseen that the AGD would act as a container
repair facility and possibly as a container leasing depot. As an empty yard, the AGD would
shorten the haulage distance for containers originating from or destined to the following
general areas:
! Burnside Industrial Park;
! Valley destinations; and
! Destinations in the direction of Truro and beyond.

8.10.5 Consolidation of export cargo


Certain high volume commodities such as pulp and paper could benefit from storing their
production destined for export closer to the port. As an example, an exported booking 50
containers at a time could haul their cargo to a consolidation facility using larger domestic
sized equipment and have the export cargo stored and available for loading into containers in
a timely fashion, compared to the time required to organize and schedule the number of
trucks that would be required to haul the containers to the plant and back to the container
terminal to meet the ship.

Such high volume export bookings are sometimes only accepted by the shipping lines near
the date of the ship arrival once space on the ship is confirmed; and it is not always possible
to find the number of trucks necessary within the time constraints.

8.11 Municipal group

It is proposed that the terminal be sited on a 67 acre parcel of mostly owned by the Municipal
Group, a major construction company. The site is at the southern extremity of the company’s
land holdings, away from the main quarry operation.

Waiting to quarry the land in question could be argued to not represent the “highest, best use”
of the property (which is ultimately their decision to make). This project represents an
opportunity for the owners of the quarry, in several respects. The owners could sell or lease
the land to the terminal operator, and perhaps take an equity interest in the terminal. They
would also have an opportunity to develop a logistics park on lands adjacent to the quarry.
The company does have a history of making strategic investments of this type, notably their
involvement in the regional landfill project, Scotia Learning PPP schools and the Harbour
Solutions project.

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9.0 Synergies

9.1 Transload/distribution

In 2004, the Greater Halifax Partnership and partners undertook a study of potential
distribution centre (DC) activity that could take place from Halifax as a way to attract
additional container cargo traffic to the Port of Halifax. The major piece of learning from the
study was that distribution centre activity was unlikely to take place in the short to medium
term, but that a hybrid of distribution centres, container transload activity, held some
potential. In the past two years, an agreement was signed between CRSA and Armour
Transportation Group to move 4,000 TEUs through Halifax which would be distributed from
a facility in the Burnside Industrial Park. Another company, Consolidated Fastfrate opened a
new 90,000 SF transload facility in Burnside in September 2007. There are several more
major retailers interested in moving additional volumes through Halifax if there was
improved transportation distribution infrastructure available.

The transload sector is important for both inbound cargo to feed national supply chains in
central Canada and to provide containers for regional exporters. The contents of three (3) 40
ft. ocean containers are destuffed at a transload facility and restuffed into two (2) 53 ft
domestic containers or highway trailers. At present, the 53 ft unit would likely return to
central Canada empty and the 40 ft unit would likely return to Atlantic Canada empty.
Transloading balances out two empty loads with two full loads. The retailer pays for two
units to move inland instead of three. The local shipper in Atlantic Canada obtains access to
much needed container equipment much sooner than otherwise. The retailer has the option of
shipping its 53 ft unit to a distribution centre in central Canada or directly to a store, as well
as eventually performing some value added services.

The Greater Halifax Partnership has established a Transload Transaction Team comprising
itself, Halifax Port Authority, Halifax Gateway Council, Halifax Stanfield International
Airport Authority, HRM Business Parks and Nova Scotia Business Inc. it is a major priority,
as is the opening up of new property within Burnside Industrial Park. The Distripark with
private access to large warehouses and transload facilities would substantially enhance this
effort.

9.2 HRM business parks strategy

A 2005 strategic plan for Burnside Business Park identified the opportunity to create a
precinct within the park targeted at the warehouse/distribution sector. The 2007 “Building the
Container Transload Sector” study refined this concept and proposed a new developed area
of Burnside (Phase 13) that could be developed to assist the Halifax Port Authority with its
transload development strategy.

Relocating the proposed Inland Terminal from Rocky Lake to Phase 13 will increase the
infrastructure available for the Transload Park and the critical mass needed to establish the
Inland Terminal.

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9.3 Burnside expressway

Phase 13 of Burnside Industrial Park would entail completion of an important link in the
provincial 100 series highway network, a section of Highway 107 linking the Atlantic
Gateway – Halifax Logistics Park with the Burnside Industrial Park, the Port of Halifax,
Highway 102 to the Halifax Stanfield International Airport as well as to the main highway to
New Brunswick and central Canada. Pending the outcome of a feasibility study currently
underway, the Expressway could also connect the proposed Logistics Park to the AGD.

Currently the four-lane Bedford Bypass/Magazine Hill is the only direct link between
Bedford/Sackville and Dartmouth/Burnside. A major segment of this link also forms a main
thoroughfare through Burnside, Atlantic Canada’s largest business park. Currently there are
about 30,000 vehicles per day (vpd) using the Bedford Bypass. Significant traffic congestion
is a regular occurrence, especially during the morning and afternoon peak hours.

The proposed Burnside Expressway will improve safety, reduce traffic congestion and
vehicle emissions, decrease travel time for passengers and cargo and support economic
development objectives of the Halifax Gateway. Completion of this link will provide badly
needed additional capacity (lanes) which will alleviate traffic congestion and improve cargo
flows to and from regional Gateway-related infrastructure nearby.

9.4 HRM by design

The HRM by Design project (due for completion in March, 2008) will produce a plan for the
revitalization of HRM’s regional core, which includes peninsular Halifax and the area within
the circumferential highway in Dartmouth. A recent summary of key ideas from the draft
plan shows a focus on intensifying development in the downtown core; incorporating more
residential development into the downtown; increasing office space downtown; and creating
streets that support an enhanced pedestrian experience.

The removal of truck traffic in downtown Halifax and the removal of the marshalling yards
from Dartmouth would support key elements of the HRM by Design approach. For example,
urban aesthetics would be enhanced, downtown neighbourhoods could be more viable, and
intensification and repopulation of the regional core would be possible.

While some may view the emerging plan as somewhat unrealistic, there is a popular vision of
downtown Halifax that does not include trucks traveling along the waterfront. This idea was
around the same time as the RFP for this project was issued, so many people may view it as
entirely consistent with a “new downtown”.

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Figure 34

9.5 Green initiatives

9.5.1 HRM’s climate change initiatives


Development of the Distripark is directly linked to HRM’s multiple initiatives related to
mitigating climate change and improving air quality, including sustainable land use planning
through HRM’s Regional Planning process. Specifically, HRM has developed the Climate
SMART project, to mitigate and adapt to impacts from a changing climate. The project has
numerous components, including GHG reduction plans. HRM’s Corporate Local Action Plan
to Reduce Greenhouse Gas Emissions (Dillon, 2005) set as a target the reduction of GHG
emissions from municipal operations by 20% from 2002 levels by 2012. HRM is now
incorporating measures to reduce GHGs from its buildings and vehicle fleets. While HRM
has and is continuing to make significant strides in reducing GHGs from its corporate
operations, progress in reducing GHGs generated by the community is more difficult. HRM
commissioned the Community Local Action Plan to Reduce Greenhouse Gas Emissions
(Dillon, 2006), a plan for challenging and supporting the HRM community to reduce GHGs
generated by residents, commuters, businesses and industry by 20% below 2002 levels by
2012. While the Community Plan identifies opportunities for GHG reduction by HRM
businesses and community members and sets out measures the municipality will employ to
support and encourage community efforts, progress in achieving the target requires
significant community effort and commitment. The Distripark, which will result in a
significant decrease in truck traffic in the core and consequently notable reductions in GHGs,
will represent a major contributor to the community GHG reduction target.

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9.5.2 HRM’s clean air initiatives


Recognizing the importance of preserving air quality and recognizing that the Municipality
does not have a delegated mandate to manage air quality (the responsibility of the federal and
provincial governments), HRM is investigating an Air Quality By-Law to address local air
quality issues. As a first step, the Municipality has commissioned a comprehensive Clean Air
Strategy for the region, and is investigating the strategic options for HRM to ensure clean air
for residents. The Framework for a Clean Air Strategy identifies the main issues that affect
the air quality and its management, and identifies opportunities for HRM to influence
stakeholders, residents, formal processes, and attitudes in order to sustain air quality. The
Framework identifies Shipping and Marine Emissions as an air quality issue, noting that
although Halifax Harbour is the focus of many activities in HRM, the Municipality has no
jurisdiction over shipping and marine emissions. The report recommends that through an
integrated airshed management approach, HRM can partner with the Port of Halifax to
identify and implement emission reduction measures for ocean-going vessel, ferries, harbour
vessels and port operations. The Distripark will represent a significant achievement in the
Clean Air Strategy, through improvement of air quality in HRM, particularly in the Core.

9.5.3 HPA emissions baseline and reductions


The Halifax Port Authority (HPA) commissioned a GHG emissions baseline report (Dillon,
2008) in response to environmental and regulatory developments and trends in HRM and
elsewhere. The report reviews potential emissions reduction measures to be considered by
HPA and presents a framework for implementing emissions reduction. While the inventory
focuses on non-ship related emission sources, truck and train transport are considered
effectively outside the control of HPA and are, therefore, not included in the overall
inventory. Notwithstanding, development of Distripark will align with HPA’s efforts to
reduce GHG emissions associated with port-related activities.

9.6 Provincial green initiatives

Nova Scotia’s Environmental Goals and Sustainable Prosperity Act includes commitments to
cut greenhouse gases to 10% below 1990 levels by the year 2020, and large reductions in
other air pollutants by 2010. To help achieve that goal, a $42.5M Ecotrust for Clean Air and
Climate Change was established in 2007 with federal funding to support projects that reduce
GHG emissions and other air pollution. Nova Scotia’s Ecotrust will support various
initiatives, ranging from tidal power to natural gas conversion at Capital Health to research
into carbon sequestration. While Provincial initiatives regarding GHG emission reduction are
obviously focused on greener power, the program is just beginning and plans to provide
support for additional clean air and climate change initiatives. Nova Scotia’s new legislation
and Eco Trust demonstrate the Province’s interest in and support for programs that address
the climate change issue.

9.6.1 Environmental technology program


Under Nova Scotia’s Ecotrust, the Environmental Technology Program (ETP) will support
the development, demonstration, adoption and commercialization of environmental
technologies and innovations that reduce GHGs and air pollutant emissions while advancing
sustainable prosperity in Nova Scotia. The program has committed to investing $9.5M into

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projects initiated by Nova Scotia businesses, institutions and organizations. The


Environmental Technology Program will be in place until March 31, 2010.

9.6.2 Ecotrust municipal program


The Ecotrust Municipal Program is to support municipally run projects that target reductions
in greenhouse gas and other air pollutants. The program will provide support to
municipalities in reducing emissions from internal municipal operations and to projects
resulting from partnerships between municipalities and the private sector and NGOs.
Preference will be given to capital projects rather than strategies, although these will be
funded as part of a capital project. Based on available information on this program, there may
be potential for some funding support for the Distripark Project, should HRM be a project
partner.

9.7 Federal Green initiatives

The Government of Canada estimates that the commercial highway freight sector is
responsible for close to 10 percent of Canada's greenhouse gas emissions. In December 2007,
Canada’s new government announced its commitment to reduce greenhouse gas emissions by
20% from current levels by 2020, through new clean energy and cleaner transportation
initiatives (address by Hon. John Baird, Minister of the Environment, at the United Nations
Climate Change Conference, Nusa Dua, Bali, Indonesia).

There is significant public interest in and support for emissions reduction in Canada. In a
recent survey of one thousand Canadians commissioned by the Chamber of Marine
Commerce, 90% support the government offering incentives to encourage companies to use
more environmentally friendly methods, like marine transportation, to transport their goods.
In terms of specific rewards, 69% of Canadians recommend the government offer tax
incentives and 63% want the government to reduce or eliminate government fees that
companies now pay to use the greener marine transportation.

While federal initiatives for freight transportation to date have focused primarily on the
reduction of GHGs through new technologies to reduce emissions from vehicles and
equipment, rather than through encouraging one mode of transportation over another, the
Federal Government’s commitment to and support for reduction of greenhouse gas emissions
from freight transportation is apparent in its initiatives and programs. The use of hybrid
locomotives in a rail shuttle to and from the Distripark might qualify for these programs.

9.7.1 EcoTransport strategy and the ecoFreight program


In 2007 Canada launched the ecoTransport Strategy. To date strategy initiatives include the
ecoMobility program, the ecoTechnology for Vehicles Program, the ecoENERGY for
Personal Vehicles Program, and the ecoFreight Program. With an investment of up to $61M,
the ecoFreight Program is focused on reducing the environmental and health effects of freight
transportation through technology, and is being delivered by Transport Canada and Natural
Resources Canada. The initiative is to reduce fuel use and emissions through six initiatives:

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! National Harmonization Initiative for the Trucking Industry – identifying regulatory


barriers and solutions in collaboration with provinces and territories, so that the
Canadian trucking industry can embrace emissions-reducing technologies.
! ecoENERGY for Fleets – reducing fuel use and emissions in commercial and
institutional fleets via training, sharing of best practices, anti-idling campaigns,
technical analysis to look for potential improvements and other technology
opportunities. FleetSmart is a component of this program, offering free practical
advice on how energy-efficient vehicles and business practices can reduce fleet
operating costs, improve productivity and increase competitiveness. Along with the
latest developments in fleet and fuel management, the initiative includes improving
education and awareness by fleet vehicle owners and managers of efficiency benefits
of new and developing technologies. On the education side of the initiative, it's
expected that more than 200,000 professional drivers – of heavy trucks, buses,
construction and other vehicles – will receive training in energy efficient vehicle
operating techniques over the next four years.
! Freight Technology Demonstration Fund – establishing cost-shared demonstrations
to test and measure new and underused freight transportation technologies in real-
world conditions. Provides the freight transportation industry with cost shared
funding for real world testing of freight transportation technologies that have the
potential to reduce the emissions of air pollutants and GHGs. Examples of eligible
projects under the program include: installation of aerodynamic devices to reduce
drag on moving trailers; Implementation of fleet management best practices; and
integration of technologies to reduce fuel consumption. Freight carriers, technology
providers, eligible facility operators, freight forwarders, shippers, educational and
academic institutions, industry associations, and not-for-profit organizations are
eligible for funding.
! Freight Technology Incentives Program – providing cost-shared funding to
companies and non-profit organizations in freight transportation to help them to
purchase and install proven emission-reducing technologies. Provides cost-shared
funding to support the purchase and installation of proven technologies throughout
the freight transportation system that can reduce the emissions of air pollutant and
GHG emissions. Examples of eligible projects under the program include: purchase
of diesel anti-idling equipments in rail yards, ports, airports and trucking stations;
purchase of hybrid switching locomotives; and purchase of electronic speed control
systems. Private enterprises that operate freight transportation in Canada using any of
the four modes (air, marine, rail, and road) are eligible. Examples include air carriers,
railways, trucking companies, marine carriers, and eligible port and airport facilities.
! ecoFREIGHT Partnerships – building and maintaining partnerships within the
transportation sector to reduce emissions from freight transportation through fast and
flexible voluntary actions that can support the regulatory framework.
! Marine Shore Power – demonstrating the use of shore-based power for marine
vessels in Canadian ports to reduce air pollution from idling ship engines in some of
Canada's largest urban centres.
! The ecoFreight Program builds on the major-infrastructure investments that the
Government of Canada announced in the 2006 federal budget, as well as the best

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elements of past freight technology initiatives that are consistent with the
Government's objectives and approach. It also complements other measures, like
regulating emissions from rail and marine transportation and fuel consumption of
new light duty vehicles, announced in the fall.
! The freight transportation component of Canada’s 2000 Action Plan on Climate
Change was represented by the Commercial Transportation Energy Efficiency and
Fuels Initiative, a four-year, $32.2M program intended to complement existing
energy-efficiency efforts under Transport Canada's Freight Efficiency and
Technology Initiative (FETI). The initiative, which was concluded in 2006,
represented a variety of measures designed to reduce the growth of GHGs emitted by
the freight transportation sector. Past initiatives with relevance to this project include:
! The Freight Efficiency Program – delivered until 2005 and administered by
Transport Canada, the initiative focused on reducing GHG emissions by Canada’s
freight-transportation sector by providing financial incentives for the purchase
and installation of energy efficiency enhancing equipment in the air, marine and
rail modes; and education and awareness programs for shippers and freight
forwarders.
! The Freight Incentives Program – provided financial support for the purchase
and installation of GHG-reduction technology and equipment. Funding under the
program was available to companies in the rail, marine and aviation freight
transportation sectors.
! Marine Shore Power Pilots – funded the installation of marine shore power at
suitable locations across Canada for up to three pilot projects.
! Awareness Programs for Shippers and Freight Forwarders – aimed at the
purchasers of transportation services, this initiative increased awareness of the
environmental, economic and other benefits of different transportation choices
related to freight transportation decisions. The program also attempted to identify
barriers to the adoption of environmentally friendly alternative methods of
shipping, and to develop recommendations to overcome them.

9.8 Atlantic Gateway

The Atlantic Gateway initiative of the federal government has been unfolding within the past
two to three years. In September 2007 ACOA released the Atlantic Gateway Business Case.
A month later, the federal government signed a Memorandum of Understanding with the four
Atlantic Provinces to develop the Atlantic Gateway.

The federal government has also been developing a national policy framework for Strategic
Gateways and Trade Corridors, which looks at potential Gateway investment through five
“lenses”. To paraphrase:
! investments have to fit an international commerce strategy;
! volumes and values have to be of national significance;
! they have to fit the parameters of future patterns of global trade and transportation,
! meet the potential scope of capacity and policy measures; and
! there also has to be a federal role and the potential to develop effective partnerships.

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This project would fit most of these criteria and greatly assist in growing the transload sector,
as described in the Atlantic Gateway Business Base.17 It would have a particularly positive
impact on national supply chains the impact of which has been especially well described by
Pat Sinnot, Vice President, as well as Atlantic region exporters who would have access to
containers that are transloaded.

As of January 2008, the terms and conditions for accessing the $2.1B Gateways and Border
Crossings Fund were still being developed.

17
InterVISTAS Consulting et al., Atlantic Gateway Business Case, Atlantic Canada Opportunities Agency,
September 2007.

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10.0 The Business Case and Implementation

10.1 Partnerships

This section addresses the question asked in the Request for Proposals: What partnerships are
required to be formed?

This is a multi-faceted project with many potential players involved. Funding for the
construction of the terminal’s infrastructure should be provided by the Halifax Regional
Municipality, HRM Business Parks, the federal government and the provincial government.
CN should fund and remain the owner of the tracks (estimated at $2.6 M). The deal between
CN and various levels of government is the first that needs to be struck. Without a committed
shuttle service, the AGD would simply be a government-subsidized container yard competing
with the existing privately owned yards.

The terminal would be built by the partners listed above and equipped by the terminal
operator. The terminal operator would be chosen through a competitive bidding process for a
long term concession agreement.

10.2 The deal

Capital Investment (apart from the land ownership) could be divided as follows:
Government: $11.9M
40% federal
40% provincial
20% municipal
CN: $2.6M (assumes rolling stock acquired under operating lease
rather than capitalized)
AGD Operator: $4.4M
Total: $18.9M

Different sections of the terminal could be built by different partners. The federal government
and HPA could fund the basic terminal (as was done for Coast 2000 in Vancouver), while the
provincial government and HRM could pay for the highway and road infrastructure. The land
owner could provide the land in return for an equity position.

Alternatively, the entire project could be built by a logistics park developer such as ProLogis,
AMB properties, Hillwood Holdings, or CentrePoint, in partnership with CN.

The second “deal” that is required is a rate structure. The business plan of the AGD operator
will rely in large part on the shuttle’s competitiveness and the rate structure will need to be
known for the concessionaire to develop their business plan and projections. The relocation
of HIT’s activities to the AGD would also provide a solid revenue base for the
concessionaire. The difficulty with this “deal” is that the concessionaire will not have been
chosen when this “deal” is required. This “deal” is required before an RFP can be issued to

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allow the bidders to build their business plan. The “rate” deal will need to be struck with a
surrogate for the eventual concessionaire.

Since the AGD will be commercially driven and each shipper would remain free to choose
their preferred routing, the commercial stakeholders should view the AGD as providing an
alternative to the existing distribution system with little or no risk of increasing costs. There
should nevertheless be a concerted effort to use the AGD as much as possible in order to
reduce trucking through the city and minimize the environmental impact of distribution to the
local market, all without adding costs. Shipping lines, terminals, trucking companies and the
Bridge Commission should be encouraged to structure their rates so as to maximize the use
of the shuttle and the AGD.

10.3 Implementation

The project would benefit from broad Stakeholder buy-in, in particular amongst the
following groups:
! HRM;
! HPA;
! container terminals;
! CN;
! shippers;
! transload operators;
! Bridge Commission;
! Burnside Industrial Park; and
! shipping lines.

During the course of the project, and at the urging of the Steering Committee, the consultants
have met or spoke with several of these groups, including the container terminals, truckers, a
transload operator and the land owner. The first round of meetings resulted in the
development of a completely new concept, that which is presented here, instead of the
original concept of the inland terminal at Rocky Lake. After developing the new concept for
a Distripark, the consultants met with HPA, GHP, the Province of Nova Scotia and CN. It is
now recommended that the new concept be presented to all stakeholders in one large
meeting, to gauge the level of support and obtain further feedback.

Assuming the project obtains broad levels of support from stakeholders, it needs a champion
to move it forward. The best organizations to undertake the project would be the Halifax Port
Authority, Greater Halifax Partnership, the Halifax Gateway Council, or some combination
thereof. Because it is a port-driven Distripark, their support is crucial.

The project needs partners who are aligned and onside. Most critical are:
! HPA;
! HRM;
! Nova Scotia government (TIR, Economic Development, NSBI);
! Federal government (Transport Canada and ACOA);
! CN;

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! terminal operators; and


! transload operators.

Once the stakeholders are aligned, investment capital should be sought from both
government and the private sector. A presentation package needs to be developed and the
proponents should market it to appropriate investors. If it is built on a BOT basis, then this
will involve a slightly different process involving a call for Expressions of Interest and then a
Proposal Call.

If the stakeholders decide to proceed with the project, negotiations should proceed for the
purchase or lease of land, or to ascertain whether the landowner is interested in taking an
equity interest in the project.

10.4 Conclusion

This project is an environmentally-friendly and sustainable alternative to using the rail cut as
a truckway. It reduces GHG emissions as well as wear and tea on both city streets and the
MacKay Bridge. It reduces overall supply chain cost and makes Halifax more attractive to
the fastest growing segment of its business: transload and distribution activity. It also
anticipates future issues with the growth of truck traffic associated with ambitions to develop
the Atlantic Gateway.

In summary, the AGD:


! has the potential to reduce the impact of growing truck traffic on city streets;
! can be commercially viable from an operating perspective;
! is located in an industrial area that does not appear to have any significant negative
environmental or neighbourhood impacts;
! is consistent with the Port’s strategy to attract transload facilities to Halifax;
! is compatible with the long term plans of the Burnside Industrial Park;
! is a sustainable solution to the desire of HRM and many other stakeholders to reduce
the numbers of trucks on Halifax Peninsula;
! uses the rail cut for a rail shuttle; and
! is a “green” and sustainable alternative to trucking.

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