atlantic gateway dis trip ark plan final report 200803

8/14/2019 Atlantic Gateway Dis Trip Ark Plan Final Report 200803

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Atlantic Gateway Distripark PlanFinal Report

Prepared ForHalifax Regional Municipalityand

Partners

Prepared ByMariNova Consulting Ltd.

UMA EngineeringCPCS TranscomDillon Consulting

Colliers International

March 2008


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Atlantic Gateway Distripark Plan

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Table of Contents

Executive Summary................................................................................................. i1.0 Introduction.....................................................................................................1

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6.0 Social, Environmental and Cost/Benefit Impact.........................................44B"! 2,%&&*&' *)).()""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

B"!"! #.44(&- S2< %&/ T3&*&' """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""B"!"1 A('*3&%, 5,%&&*&' )-4%-('0 """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""B"!"7 I>5,*+%-*3&) :34 54353)(/ .)(""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

B"1 P&6*43&>(&-%, %))())>(&- """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""


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B"1"! (-%,)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""B"1"H F+*/ '(&(4%-*&' M(/43+9""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""B"1"N F4+$%(3,3'*+%, 4()3.4+() """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

B"7 #3)-VM(&(:*- %&%,0)*) """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""B"7"! F)).>5-*3&)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""B"7"1 #%,+.,%-*3& 3: -4.+9 /*)-%&+( ()-*>%-() """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""B"7"7 A()-4*+-(/ 6)" .&4()-4*+-(/ 9>""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""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"="! I>5%+- 3: -4.+9 /*)-%&+( W -4.+9(4)""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""B"="1 I>5%+- 3: 43%/ ;(%4 %&/ -(%4""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""B"="7 #3&'()-*3& """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""B"="= X%&/,*&') W +3)-VY)%6*&')Z """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""B"="? @(- LXL (>*))*3&) W *&+4(%)(VY4(/.+-*3&Z """""""""""""""""""""""""""""""""""""""""""""""""""""""B"="B [4*/'( 35(4%-*3& W *&+4(%)(VY4(/.+-*3&Z """""""""""""""""""""""""""""""""""""""""""""""""""""""""B"="D @(- +$%&'( *& 5435(4-0 6%,.()"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

7.0 Financial Projections of Revenue and Expense.........................................62D"! C+(%& -(4>*&%, %+-*6*-0 """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""D"1 @(; /*)-4*5%49 %+-*6*-0"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""D"7 P>5-0 +3&-%*&(4 0%4/ %+-*6*-0 """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""D"= E4.+9 ;%*- -*>(""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""D"? #3)- -(4>*&%, 35(4%-*3&) """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""D"B >%40 3: &(- :*&%&+*%, *>5%+- """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

8.0 The Value Proposition ..................................................................................68H"! X%,*:%Q 234- F.-$34*-0"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"1 X%,*:%Q A('*3&%, S.&*+*5%,*-0 """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"7 R3;&-3;& X%,*:%Q"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"= #@ """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"? R*)-4*5%49 %&/ -4%&),3%/ """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"B () """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"D"? P>5-0 )-34%'( """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"D"B A(6(&.( """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

H"H 5-0 +3&-%*&(4)""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"H"= PQ534- +3&)3,*/%-*3& """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"H"? #3&)3,*/%-*3& 3: (Q534-"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"H"B C-$(4 )(46*+() Y+3&-%*&(4 ,(%)*&' %&/ 4(5%*4Z"""""""""""""""""""""""""""""""""""""""""""""""""

H"N E4.+9(4) """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"!J


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H"!J"1 F++()) -3 +%4'3"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""H"!J"7 .&*+*5%, 543'4%>""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

N"D ^(/(4%, L4((& *&*-*%-*6() """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""N"D"! P+3E4%&)534- )-4%-('0 %&/ -$( (+3^4(*'$- 543'4%>"""""""""""""""""""""""""""""""""""""""""""""""""

N"H F-,%&-*+ L%-(;%0 """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""10.0 The Business Case and Implementation ....................................................84!J"! 2%4-&(4)$*5)"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""!J"1 E$( /(%,"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""!J"7 I>5,(>(&-%-*3&""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""!J"= #3&+,.)*3&"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

** ** **


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Atlantic Gateway Distripark Plan iii

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! reduce GHG (Green House Gas) emissions by reducing truck mileage or concertingsuch 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($000s)

NPV Of Costs/Savingsat 20 Years ($000s)Using 5% Discount

Ocean Terminal ActivityFull Containers (ship-to-truck or truck-to-ship) $(115) $(1,921)

Empty containers (to/fromterminals) $538 $8,968

Distripark Activity

Transload containers $40 $962Transload empties $1,100 $26,443

MT Yard Activity

MT yards 0 0Truck 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 theleast of which is:

! the volume of transload cargo through the AGD (particularly since the rail shuttlecosts are mostly fixed);

! the ability of the container terminals to go directly to/from rail rather than groundcontainers (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 localmarket. As such, the percentage of container truck traffic that could be removed from citystreets is projected to grow from 40.5 % in 2009 to 49.1% by 2028.

The truck avoidance potential is summarized in the following figure:


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The AGD, at an estimated infrastructure capital cost of $14.5M compares favourably to theRail Cut alternative in terms of truck avoidance potential. However, a direct comparisonbetween the Rail Cut options in the earlier study and the Distripark is difficult because thecut could be used by other than container trucks and it would be used one way for all trafficin the South end of Halifax, while the AGD would affect only intermodal traffic from theport 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 byan estimated 55% but cost some $40M.

At least at the beginning, the capital cost of the facility cannot be fully paid for by the AGDoperator and government and other stakeholder funds will be required. It is recommendedthat the facility be operated by a private sector operator under a long term concessionagreement that would be awarded to the qualified operator willing to pay the most towardsthe capital cost of the infrastructure. The concessionaire would be required to providehandling 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 Ports strategy to attract transload facilities to Halifax;! is compatible with the long term plans of the Burnside Industrial Park;

Growth in Truck Moves & Projected Share Removed From CityStreets

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 200.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Total Trucks Involved in Terminal Moves

Total Trucks Removed or ShortenedPercent of Intermodal Trucks Removed or Shortened


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! is a sustainable solution to the desire of HRM and many other stakeholders to reducethe 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 betweenthe government and the shuttle operator (railway), and concession the AGD to a qualifiedoperator.


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1.0 Introduction

This report is a follow up to a previous study undertaken by the same team of consultants in2005. Its main purpose was to examine options available to the Halifax RegionalMunicipality in removing trucks traveling to and from Ocean Terminals and Halterm throughdowntown city streets.

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

Figure 1 Original Concept, Rocky Lake Inland Terminal

The inland terminal would have increased the capacity of the Halterm and CeresGlobalterminals significantly, and postponed the need to construct a third container terminal, withthe timing dependent upon the ports overall growth.


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

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

It was recommended that the Halifax Port Authority and partners adopt a plan to have aninland terminal built by the time the port is handling 900,000 TEUs per annum, which wasthe ports estimated capacity at the time. It was also recommended that negotiations beginregarding the Rocky Lake site and that some combination of HRM, HPA and CN reachagreement to acquire this property in a prepared state from the existing quarry owner theMunicipal Group.

The previous study also recommended that when the existing terminals were within one totwo years of reaching capacity, an operating company should be established and that amanagement 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 InlandTerminal and Trucking Options Study to go forward with a plan to be ready when the facilityis needed. However, a number of significant changes have occurred since the previous studywas 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 studyreleased in January 2006, it is nevertheless useful to quickly review the changes that haveoccurred since the first study.

The original study concluded that there was not now sufficient congestion at either terminalor in downtown Halifax to justify the NIT (New Inland Terminal). It also concluded that theNITs 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 itbecomes 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 tocontribute towards achieving a positive outcome. Finally, it recommended that the landshould be acquired and reserved for an inland terminal and that when existing terminals arewithin 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 impacton the economic viability of the original project. The following are some of the most relevantchanges.


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Projected2004 2005 2006 2007

525,553 550,214 530,722 490,000

Actuals

1.1.1 Port capacity revised

Following a (yet unpublished) study commissioned by the Port Authority, the capacity of theexisting 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 themost recent capacity estimate, the existing container volume is only 25-40% of the portscapacity 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 Portof Halifax had generally been growing for the past decade albeit at a lower pace than themarket; and as of 2005, it was expected to continue this growth pattern. However, the growthin containers moved through the port declined in 2006, to 530,000 TEUs and was expected tobe down another 6-8% in 2007 to about 490,000 TEUs.

Figure 2 Port of Halifax TEUs, 2004-2007

Based on 10 year trend and incorporating the change in estimated capacity, the requirementfor 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 resultedin 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 benecessary for the next century. The situational differences can be visualized on the twofollowing graphs:

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

10 Year Trend in 2005

300

350

400

450

500

550

600

650

700

750

800

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Thousands

TEUs

10 Year Trend in 2007

300

400

500

600

700

800

900

1000

1100

1200

1300

1400

1998 1999 2000 2001 2002 2003 2004 2005 2006 2

Thousands

TEUs


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1.1.3 Shipping lines

Shipping lines using the Port of Halifax were concerned their costs could increase. Theypointed to the lack of growth in the port to explain the need to improve the cost of doingbusiness in Halifax and see any potential for extra costs as a threat to the port. In the shortterm 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 smoothprocess, compared to having the railway supply rail cars on a shuttle train, and railing thecontainers inland before being available for delivery, or having ships wait for containers to beshuttled into the terminal for loading. The fact CN had at that time changed its operatingpolicy from having sufficient empty cars available at the port terminals for ship arrivals, toone 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 carsavailable and sitting idle waiting for ships to arrive. Ultimately, any extra handling costswould be passed onto the shipper and the competitive position of local importers andexporters could be negatively impacted.

1.1.4 Port terminals

Both terminals have underutilized assets, and theoretical capacity gains of the proposedRocky Lake inland terminal are of no value at the present time. The terminals have expandedwith more cranes, more tracks, more land and higher stacking of containers. They do notwant to relinquish any opportunity to generate revenue and are concerned that any increase inthe cost of moving containers through the port would have catastrophic consequences withrespect to the ports viability. They also foresee more containers going to ground andcompetition between the shuttle and the trains for railcars, negatively affecting non-localtraffic.

1.1.5 CN Rail

CN indicated that the inland terminal concept was too futuristic. The company is veryfocused on operating a railroad, meeting short term goals and maximizing yield from its trainoperations. They do not feel the need for an inland terminal has been established. In themeantime, the company has stated publicly on several occasions that it is consideringbuilding 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 containerterminals, and continues to seek ways of minimizing their operating costs and maximizingtheir trainload yield. CN has a significant investment in this key corridor and is looking forways to bring more traffic in order to maximize their revenue. CN sees Halifax as a gatewaywhere port costs need to be reduced if increases in rail traffic are to be realized. Traffic fromHalifax to the US. Midwest has been particularly hard hit and one main reason is the strongCanadian dollar. It has also stated publicly that it is generally concerned about the lack of growth at the Port of Halifax and the ports ability to fill existing capacity.


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


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2.0 Literature Review and Case Studies

There is a rich and growing body of literature and studies relating to a number of relatedconcepts inland terminals, inland ports, logistics parks, distriparks, and dry ports. While notrequired in the Request for Proposals or project scope, it is useful to review these, as well assome 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, andthere have been a number of interesting developments impacting the other two examples. Wehave 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 thewaterfront. The Auckland region has a population of about 1.15 M and the port handled773,160 TEUs in FY 2006-07. The port is presently about two to three years away fromrunning out of capacity, which is when their inland terminals will really be needed.

To some extent, Aucklands inland terminal initiative was also a competitive response to theport of Tauranga, located 200 miles away, which has its own intermodal terminal, Metroport,located within Aucklands city limits. Given its distance from the port, Taurangas Metroportwould be more akin to a North American intermodal port, such as those in Montreal orToronto, although on a smaller scale. A major difference is the fact that Tauranga subsidizesthe service as a means to increase its share of the Auckland market. The results have beenimpressive, with the port increasing its volumes 500% since establishing Metroport, and theintermodal facility itself handling 138,000 out of the ports total of 466,000 TEUs in FY2006-07.

In Auckland, one small terminal is operating in East Tamaki, primarily serving a largemanufacturer of white goods, Fisher and Paykel. This one hectare facility is 18 kms from theport, 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 be10 ha in size and is expected to be served by rail shuttle within the next 12 months, assumingoperating details can be worked out with the railway. It is expected that a distripark willemerge 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.


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Figure 3 Auckland Inland Ports


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In 2006, the BC Ministry of Transportation completed an inland terminal study. 3 It identifiedfive 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; and5. phased development to limit initial capital investment.

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

The prime obstacle identified to obtaining rail service for an inland terminal was the potentialimpact on mainline rail operations. Two options were considered, an empty containerterminal in the Lower mainland and an export transload-oriented terminal. Three size optionsranging 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 TEUsper annum. A site was picked at Matsqui Junction, about 45 miles from existing transloadwarehouses. The location of the terminal made it uncompetitive with the existing systembecause of increased trucking costs.

However, it was determined that having a cluster of import distribution facilities located atthe same location would vastly reduce the costs of drayage. Combining an inland terminalwith 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 relocateseveral new facilities recently constructed. One conclusion was more rapid expansion of container-handling facilities adjacent to the on-dock container terminals, may offer betterefficiency and increased levels of service if it can be accomplished. Moreover, the authorsconsidered the co-location of an inland terminal with an integrated logistics park to be a bestpractice.

3 BC Ministry of Transportation, Inland Container Terminal Analysis, Final Report, IBI Group, 12 December2006.


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Figure 4 Transload Facilities in Lower Mainland BC

*&%, 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 Germanborder, about 120 miles from the port at Venlo in the Netherlands. 4 Along with the NorfolkSouthern railway, they determined that an inland terminal could be a means to extend theports hinterland into Ohio, Pennsylvania, Maryland, West Virginia, New York and Virginiaitself. Most of this hinterland was being served by the Port of Baltimore. A site was selectedin the Shenandoah Valley near Front Royal. It had access to two interstate highways and1,400 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 beingtrucked or moved by barge to Baltimore.

By 1996, the facility had grown to 40 acres with over 17,000 feet of rail track and washandling about 100,000 containers per annum, all of which was considered new business forthe VPA. VIP provides all the services that a port terminal does including at least 6 trains perweek, 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, preparedfor AAPA Port Authorities Professional Port Manager Program, September 1996.


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

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

Coincidentally, the port is also embarking on the development of an Intermodal LogisticsCentre (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 itnor the operator.

At the present time, about 20% of containers are moved in and out of the port by rail. Withthe 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 ona 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 spaceprovided for six warehouses of 650,000 sq. ft.

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

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


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Figure 5 Enfield Intermodal Logistics Centre, Port Botany


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

A fully functional dry port is believed to increase the energy efficiency and theenvironmental performance and relieve road congestion of port cities. 9 Removing seaportfunctions 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 dryports. In the North American context, a distant dry port would be akin to CNs intermodalterminals in Montreal, Toronto and Chicago. A mid-range dry port would be similar to theVirginia Inland Port described above or the proposed Inland Port at Moncton, and isgenerally a distance away that could also be served by truck. As described above, VIP isabout 330 kms away from the port. The best example thus far of a close dry port in NorthAmerica 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 mainproblems 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 hinterlandor at the outer fringes of the city. With increased terminal capacity comes the ability forincreased productivity since larger vessels may then call at the port. The close dry port alsoconsolidates road transport to and from shippers outside the city area offering a rail shuttleto the port relieving city streets and the port gates. 11

Gothenburg, the second largest city (regional population 510,000) in Sweden and largest portin 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 andanother 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, TransportationResearch, An International Journal, Part D 12 (2007), 523-527.

9 Sustainable technology options and policy instruments: Report no. 3 Appendix, European Panel on SustainableDevelopment, 2006-05-16.

10 Ibid., p. 8.11 Ibid., p. 9.


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which is connected to the Green Cargo dry port. Despite good inland rail connections,however, only 30% of Gothenburgs container cargo arrives by rail. 12 The Green Cargoterminal 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 thedevelopment 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.


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3.0 The Atlantic Gateway Distripark Concept

The study team proposes a new and much less expensive concept for a combinationtransload -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 ports recentsuccess in attracting transload and distribution business to the Halifax gateway.

Figure 6 below provides an overview of the Halifax area under discussion, showing NorthBurnside 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 onelocation 18 kms from the port, at the north end of Burnside Industrial Park, adjacent to theproposed Phase 13 Transportation Node in Burnside Industrial Park.

The new concept is not a rail spur, but a Distripark Terminal . Initially, it is envisioned thatCN will operate one rail shuttle per day with dedicated equipment in each direction, takingcontainers 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 servicein 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 willprovide 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 railroutes required, and it links up with the proposed Burnside Expressway and other synergies.The basic concept is illustrated below:


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Port Terminals

Empties

Empties

Port Terminals

BurnsideIndustrial Area

DistriparkAtlantic Gateway Distripark

Atlantic Gateway Terminal Concept

Present Situation

Across City Dray

Yard S hunt

Port Labour

Gateway Labour


Yard Shunt

Figure 7 Distripark Terminal Concept

3.1 The concept

Under the present situation, import cargo that arrives at the port to be transloaded locally ispicked up by truck and driven to a transload facility. The empty container is generallyreturned to the port by truck. The same container is later picked up by truck to be positionedto a shipper for loading of export cargo. Finally the loaded export container is then trucked tothe 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 ashaving 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 thenumber of processes which can be centralized into one location. These processes include theunloading of containers, inspection, empty storage, repair, reloading of the container, allwithout using normal gate restrictions, public roads or highways with their accompanyinglicensed 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 thepark, avoiding road tractors and road chassis.

More importantly, it must be designed to provide competing transload operators, variousforwarders and transportation companies to have access to this integrated facility, while stillmaintaining their independent public road access. Finally, the facility, while it cannot be onthe 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 shuttleservice, 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 cheaplyon an operating cost basis, even when adding an additional lift in the process, but is also acompetitive service in addition to trucks, and not a forced fit for all port traffic. This lastpoint is the most important one of the concept. Trucks are faster, more versatile and for somemoves 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


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Port TerminalsDistripark

Atlantic Gateway Distripark


Yard Shunt

Gateway Terminal Labour


Transload Facilities

Transload Imports

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

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

The train shuttle runs with dedicated car sets, and a regularly scheduled run, just like acommuter train. Dedicated car sets ensure consistent capacity and availability as well asallowing 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 andservices.

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

Figure 9

Figure 10 below shows the reverse operation. Here a typical export load that has beenloaded at the transload Distripark, is placed on the rail shuttle and sent to the Port. Itshould 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 thequantities in time to meet the vessel sailing. The rail shuttle provides the alternative andopportunity to handle such volumes more efficiently to the port.


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Port Terminals DistriparkAtlantic Gateway Distripark


Yard Shunt


Transload Exports

Transload Facilit ies

Gateway Terminal Labour

DistriparkAtlantic Gateway Distripark


Yard Shunt


Transload Facilities

Gateway Terminal Labour Road Transport

Figure 10

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

Figure 11

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


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4.0 Functional Site Plan

4.1 Rail network

Halifax serves as the eastern terminus for CN train operations. The Bedford Subdivisioncovers the local route between Truro and Halifax. Heading east toward Halifax theDartmouth Subdivision branches off at Windsor Junction (mi. 15.8) thereby providing aconnection 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 thefreight rail traffic is comprised of containers bound for the port terminals of eitherCeresGlobal or Halterm. Originally this section was a two track mainline between Halifaxand Windsor Junction.Frequent trains plus slower speeds owing to the heavy 1.5% rulinggrade 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 hurricanewashed out a section of one of the 2 tracks near Bedford, which resulted in CN removing thesecond main track from mileage 7.0 to Windsor Junction. There is still the ability for trains to


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pass in the section since the Halifax Transfer Track (formerly the second main track), runs asan 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 (mi5.0). Here the Deepwater Branch diverges at Fairview Junction from the mainline,connecting the CN domestic intermodal terminal (HIT). The former double track mainlinecontinues as a single yard track through the cut toward Halifax passing the Chester Spur (mi4.5), and is designated the HOT-Rock Connecting track. CN removed one of the two maintracks several years ago in the cut, leaving only a second yard service track between mileage2.5 and mileage 1.4. From mileage 1.4 two tracks branch into the HOT terminal yard. TheVIA station is located at mileage 0.0 Bedford Subdivision.

The CN Dartmouth Subdivision descends eastward from Windsor Junction, passing underHighway 102, passing by the community of Waverly, dropping down toward Lake Williamand then climbs toward the Burnside Industrial area. It finally descends into the BedfordBasin and downtown Dartmouth. The Dartmouth Rail yard is located in prime downtown realestate 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 CNAutoport 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


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The area to the east of the site is designated to be used as a Transportation Node. The 64 acreterminal site is entirely on Municipal Group land, lying just east of the CN DartmouthSubdivision 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 isapproximately the same elevation as the CN Dartmouth subdivision where the proposedBurnside 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 thelatest proposed development for the Burnside Industrial Park. This results in local truckaccess which can be provided through Phase 13 if it is modified for this purpose. One benefitof 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

4.2.1 Rail access

As seen in Figure 14 above, the terminal will be double ended, with two pad tracks of 3200 ftin 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 providean easement wider than the existing 100 ft railway right of way, through Ungranted Landsto 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.

Conceptual layoutshowing 9 propertieswith both direct backdoor terminal accessplus public road front


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Figure 15

4.2.2 Road network

This section describes transportation impacts of the proposed Inland Terminal and Distriparkto the overall transportation road network. Also, it provides an overall description of theproposed location, access concept, and results of the initial feasibility assessment of theproposed access/connectivity solution. As described above the proposed location for theDistripark is adjacent to the north-west side of the Phase 13 development lands of theBurnside Industrial Park along CN Dartmouth Subdivision track. This location was selectedfrom several alternatives as described earlier in the report. The proposed location offersseveral significant benefits, from the access/connectivity perspective, resulting from theproximity to the existing and future major highways (the proposed extension of Highway107) and interchanges (the Highway 107/118 interchange and the proposedHighway107/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 Halifaxcontainer terminal operations from Downtown Halifax and the MacKay Bridge. The numberof 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 areaccounted for daily in Halifax. Table 1summarizes existing annual truck volumes generatedby 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 TruckVolumes Burnside

BayersLake

Other HRM Truro Valley

South Shore

TotalTrucks

Halterm 4,550 853 284 15,750 3,500 1,313 26,250Ceres 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%


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Figure 17

The truck traffic issue in Downtown Halifax will aggravate in the future as significant growthin port terminal operations, particularly relating to Transload is anticipated. The projectedgrowth of ports operations (and related growth of truck traffic) provides additional

justification for the proposed Distripark project. Table 3 presents projected growth of trucktraffic (projected truck traffic annually and average daily) related to the operations of theproposed facilities.

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

Year 2009 2013 2018 2023 2028Total Annual No. of Trucks 61427 74301 94253 119561 151666Average Daily No. of Trucks 246 297 377 478 607


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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 currentlycompleting 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 beconnected with Highway 107 through a partial interchange. A full interchange is proposed atthe proposed crossing of the extension of Akerley Boulevard to the Phase 13 subdivisionproposed by the Halifax Regional Municipality as an expansion of the existing BurnsideIndustrial Park.Figure 18 presents the future connections of the proposed site and theadjacent 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 wasdeveloped and is presented inFigure 19.


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Figure 19

We propose to expand the partial interchange between the Burnside Drive Extension andHighway 107 (the NS TIR project) to a full interchange and provide exclusive access fortruck 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 adirect highway access through the interchange.

An expansion of the originally planned Phase 13 internal road network is proposed to providepublic gateways to the Distripark. This network culminates at the proposed Highway107/Akerley Boulevard interchange (the NS TIR Highway 107 extension project) and, inaddition to providing access to the Highway 107, connects the proposed site and the wholePhase 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 roadnetwork concept and coordinate our solutions with the Phase 13 plans and the Highway 107Extension project (based on available information). It has to be noted that the NS TIRsHighway 107 Extension project is in a preliminary stage of development. Further closecoordination with the Regional/Local Municipalities and NS TIR will be required duringsubsequent planning and design stages of the Distripark project.


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DISTRIPARK TERMINAL ($M)GRADING 2.2TRACK 2.3PAVING 4.2GATE 0.7STRUCTURES 0.3BUILDINGS 0.3ELECTRICAL 0.6

ENVIRON'L 0.2SIGNALS & COM 0.2ENGINEERING 0.4SUB TOTAL 11.4CONTINGENCIES 2.1TOTAL 13.5

LOCAL ROAD ACCESS 1.0GRAND TOTAL 14.5

4.3 Terminal capital costs

It should be noted that we assume the Distripark development will be undertaken by adeveloper in conjunction with the city and other stakeholders. As in Figure 9 above, land forthe Distripark will have to be acquired from three different owners, Chappell, Webby andShortt. 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 easementrights to a portion of the ungranted lands for the rail access at the north end of the intermodalterminal. 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 intermodalterminal 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


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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 BurnsideDrive 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 toprovide for an LCV assembly point.

4.4 Rail shuttle operations

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

Figure 20


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4.4.1 Purpose

The Rail shuttle has two basic operational requirements:

1. Carry local export transload containers from the Distripark which have been loadedwith export to the two port terminals by rail.

2. Conveyance of locally destined import containers from the two port terminals to NITby rail where those containers are to be de-stuffed as well as containers whose finaldestination is more closely served by the new Distripark terminal.

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

4.4.2 Requirements

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

Since there is no direct wye at Windsor Junction to connect Dartmouth/Halifax rail routingdirectly, we assume train operation will use the wye at the junction to reverse the trainmovement 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 thetime, and there are other issues using the Windsor & Hantsport Railway shortline tracks atthe wye. CN has indicated they would prefer the new wye connection to be added at WindsorJunction, but this has not been costed.

The train schedule would operate to Port requirements. We assume normal operation of 5days per week at four hours average round trip, although based on labour contracts this couldwork as a six-day-if-required assignment. The crew would most start at Halterm late in theevening, running to Ceres were it would lift cars for the Distripark. It would immediatelyreturn from the Distripark terminal back to the Port area in the early a.m. working one roundtrip per working day. This way the crew would originate and terminate at the port end. Theshuttle could operate 2 round trips if necessary on a given day (i.e. 4 hours + 4 hours (withsome overtime for crew if necessary) but we do not anticipate volumes would require thatneed 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 inFigure 21. This car is designed to carry standard ISO 40 ft and 20 ft container weights, up toa maximum of ten 40-ft containers.


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Figure 21

To reduce unnecessary switching and allow railcars to always be available forunload/loading, one set of railcars would always be left at the Distripark terminal, and theother set would be split and left at the port terminals. Each set could move up to 100 40containers per set of railcars each way on their round trip. The sets would be split at the portterminals based on percentage of requirement from Halterm or Ceres. Currently that wouldbe 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 atthe Distripark terminal, set them off, run-around the other end of the terminal, couple ontothe second set of cars which have been loaded and then depart. This operation constitutes lessthan two hours work for the shuttle train at the Distripark terminal and allows one crew to beused 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 varianceon any given day would be between 30 and 80 containers per train depending upon vesseland pricing. The advantage to this proposal is there is always the "competitive" alternative tohave individual containers trucked if necessary at a higher cost, so there is operationalflexibility in our approach. In addition, as the volumes by shuttle increase beyond 10containers moved per train, the actual costs drop dramatically per container, which will inturn 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 sidingsspaced 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 evennumbered trains operating eastbound.

West of Windsor Junction, trains from the Halifax as well as Dartmouth side of the basincombine to keep this section fairly busy. At least 12 trains per day plus extras move over thissection. East of Windsor Junction, on the Dartmouth Subdivision general manifest trains 307and 308 carry autos and other commodities. In addition, Gypsum unit trains make 2 roundtrips 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 thebasin, 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 intermodalterminal) as well as other local industries. Other than train 121, all freight trains arrive anddepart 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 arriveseach morning at Rockingham and then proceeds to take its domestic containers directly intoHIT for early morning availability. VIA trains 14 and 15 operate through the cut over theHOT-Rock Connecting Track into the VIA station (mi 0.0).


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Figure 22

The following table is a representation of CN train operations over the Bedford Subdivisionas well as a suggested Shuttle Schedule. The Distripark is shown in red since it is in thereverse direction from Windsor Jct. The red times show other train schedule times which passthe 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 runaround the train at Kinsac.


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Table 5: Representative CN Rail Operations Bedford Subdivision

Since one round trip per day is scheduled for the Shuttle, there are no obvious capacity issueswith either the Bedford Subdivision or the Dartmouth Subdivision. The Shuttle could operateas 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 railcars left at the Distripark Terminal, there would be no switching involved. The shuttle wouldsimply pull through one of the 2 terminal pad tracks and cut off the cars from the Port. Thenthe 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 PortTerminals 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 verysimple operation, and risk free. There is sufficient time in the 8 hour crew day to do anyswitching 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 somewhatvariable, for ease of argument we are assuming an amount that will cover operating costs. Wehave presented estimated shuttle operating costs below. While these are really somewhatvariable depending upon a host of factors, for ease of argument we are assuming an amountthat 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 costsof the shuttle train are largely fixed costs independent of volume since we have assumedfixed consists for ease and consistency of delivery. We have avoided speculating on howrates would be set by the various stakeholders but do come to the conclusion that since thereis a holistic gain, all players would benefit if the overall costs in the delivery chain arereduced making Halifax a more attractive port, especially for the transload and distributionsectors.

We assume the two locomotives required for the shuttle train will come from existinglocomotives 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.


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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 bebroken apart at the Distripark, there is no need for operating personnel to couple air lineson the cars. Any exceptions can be handled by the train crews. Overhead costs include asum 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 wellbelow the savings accumulated by use of the shuttle. Therefore our conclusion is that CNhas ample room to cover costs and make a profitable service based on the gap betweenshuttle costs and operating savings from the overall Distripark Shuttle concept.

Table 6

1. Annual train operating costsFuel, wages, overhead, admin & other

$550,000

2. Annual Rail Cars lease costsRail platforms 100 @ $16 per dayDaily lease per platform car incl. mtnc. $16Daily car costs $1,600

Lease days per yr 365

$584,520

3. Annual Locomotive lease costsNumber of Locos 2Capital cost 1,800,000Total capital 3,600,00025 year life $548

$66,667

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 operationsinto the Distripark Terminal area. We have superimposed the aerials of both the existing CNHalifax (Domestic) Intermodal Terminal (HIT) in the Phase 2 area of the new terminal, aswell as the existing CN Dartmouth Yard in downtown Dartmouth to the west side of theDartmouth Subdivision.


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Figure 23

In terms of HIT, this would provide significant benefit to CN since much of their ability tofill backhaul domestic containers is generated by transload freight from import containers. Byusing the Distripark Terminal in lieu of HIT, CN would generate savings on most domestictruck 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 bestviews 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 agohad already recommended moving this yard to a location very close to the Distripark. (TheDistripark concept was independently arrived at). As can be seen below, this yard would berelatively a small addition to the overall project. CN has indicated that it is willing toexamine relocating the Dartmouth yard as long as mainline access is continued through theDartmouth area to reach Autoport.

We believe that CN should consider these options carefully, especially with the additionalbenefits 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 inthe overall reduction of trucks on Halifax city streets.


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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 thesedecisions and are responsible for the commercial risk of the AGD.

The AGDs 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 anaverage of 93 rail/truck or truck/rail moves per normal work day, some. Peak handlings perday are expected to reach 148 handlings per day which is only 12 handlings per hour over the12 hours of operation. This is not the same as a 5 minute truck turnaround, as it is mostlydependant on matching the terminals capacity with the arrival pattern of trucks. Twelvehandlings per hour are relatively low and a combination of extended hours and continuousoperation will minimize truck turnaround by minimizing queuing.

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

The following discussion is meant only to provide an example of a capital cost of equipmentfor 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 orsome 233 per day on average, 373 per day, peak. Three empty handlers could handle theworkload (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 operatingsystems that simply keep track of the containers on site and their approximate positionrequire a small investment but do not provide the same benefits as an integrated DGPSsystem that can plan instructions to optimize the use of handling equipment and provide arecord of all moves within the terminal. A middle of the road system should be able to supplythe information for billing and keep track of container movements on a real time basis. Thecost of such a system can vary significantly depending on whether the system is bought forthis application or the system is simply an extension of an existing (or proprietary) containercontrol system used elsewhere.


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

Chassis should be supplied by the transload warehouses and colour coded by transloadfacility operator. This will allow containers to be positioned to chassis on arrival and movedto and from the transload facilities as required. To handle these chassis and some otherequipment 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 thelabour and equipment necessary to perform these tasks. A maintenance facility with at leastone indoor bay for servicing the container handlers and other vehicles is required.

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

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

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


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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 containersto and from the areas of Burnside, the Valley and north of Halifax. Since the existingcontainer terminals will still handle empty containers, as well as full import and exportto/from truck, it is expected that the full-in full-out truck moves will increase and gravitatetowards the container terminals. The MT-in MT-out moves are also expected to grow as aproportion of the total and will tend to gravitate towards the AGD.

Truckers and shippers would benefit from longer hours of operation and quicker turnaroundtimes at AGD. Moving CNs HIT activities to AGD could be beneficial for CN, the AGD andthe shippers but this is not part of the business case considered here. The existing portterminals 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 theownership of the facility should rest with the funding entities although the facility could besold to the private sector at some point in the future.

The shuttle operator is a critical component of the AGDs success and it is desirable that theshuttle operator (likely CN) also have an equity investment in the AGD to ensure that theobjectives 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 threelevels 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 ownmanagement, billing and administrative functions. It will need to work closely with theshuttle operator; scheduling and IT systems need to properly mesh and close day-to-daycommunications will be essential to ensure service objectives are met. Both the shuttleoperator and the AGD operator should be driven by commercial objectives and governmentcontrol 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 concessionof the facility, similar to the arrangement between the HPA and the existing containerterminal operators, where the concessionaire would essentially function as if it owned thefacility although the land and basic infrastructure would never transfer and the concessionwould come up for renewal at the end of the concession period.


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

5.3 Performance standards

Truck turnaround should be measured continuously and monitored on an ongoing basis aspart of the concession performance standards. It is one of the main benefits for trucks of theAGD and it should be kept under 30 minutes from the time the truck is available to enter thefacility to the time the truck exits the facility.

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

Security standards must be maintained both as a consolidation area for export cargo and tomaintain the terminals status as a Customs bonded facility.

Automated scheduling should be implemented to keep the queuing of trucks to a minimumand 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 mayvary 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 achassis designated for the transload facility for which the cargo is destined. This chassisshould be owned by the transload facility and the AGD is deemed to have delivered thecontainer 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 transloadoperator, transload operators that are directly back onto the AGD can access their freight atany time, 24 hours per day, 7 days a week. They control their own gate to the private accessgate and enter the AGD through an automated gate and security system set up on the privateroad. The may choose to use their own shunting tractor or to contract this work out to theAGD operator. Once the container emptied, it is returned to the empty stack and stored untilit is needed for export load.

5.4.2 Transload exports

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


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shipment is delivered to rail. This is much more likely to occur during normal working hoursdue 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 bereturned 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 theterminals. The empty container would be recorded by the trucker on the way into the AGDand the request for the container to be picked up made at the same time. The truck wouldthen be given instructions to drive to the appropriate area in the yard to deliver the containerand then to the area pick-up the next one. The receipt of the empty container would beregistered when the container is offloaded and the container delivered to the trucker would beregistered 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 rightdirection (doors facing the rear of the truck).

Full containers would be handled by front end loaders (fronts or top handlers) or by reachstackers depending on the operators preference. It is estimated that approximately three suchunits, each capable of lifting 40-tonne containers from the second level of a double stackedrailcar 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 handlerswould be required initially.

Hustlers would serve to move chassis around as required as well as pick-up and delivercontainers 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 numberof yard hustlers required is 4, although more could be required depending on the contractualarrangements between the AGD operator and the transload operators.

At the heart of the NIT operation is a state-of-the-art terminal management and inventorysystem with Differential Global Positioning System (DGPS). The terminal managementsystem (integrated IT system) will plan every move based on all the information available toit. 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 verifythat the instruction was properly executed and also keep track, in real time, of the 3Dlocations of any box shifted.


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