
| Northern Re-supply
Remote communities in Canada depend
on annual sealift, winter roads and small airplanes for transportation
services. These annual services are least expensive and necessary to
transport heavy, indivisible, or bulky goods. These services are
inconvenient however, even for storable cargo, because annual re-supply
imposes significant inventory financing costs on buyers. Goods have to
purchased and assembled in advance of transport, then inventoried for
the balance of the year. Airplanes provide year round service for
perishable and higher value goods that they can accommodate (typically
less than 7 tons payload), but they are expensive. Perishable food
product prices can be easily double the cost of the same goods in the
south. Few kilometres of all-weather roads are likely to be built in the North because the burden of sustaining the existing road infrastructure exceeds the financial ability of the Province of Manitoba. The Manitoba Government�s 2020 Transportation Vision consultation process identified the following significant issues facing the existing road network:
The 2020 Vision report estimates that 30 percent of the existing roads (4,600 km) need pavement rehabilitation, or reconstruction, at an estimated cost of $1.2 billion. A further 40 percent (5,100 km) need to improvements within the next 10 years at a cost of $1.1 billion. Given the backlog of deferred maintenance and reconstruction facing the existing highway network in Manitoba, residents in the North can expect only marginal improvements in the all-weather roads to their communities. One of the most basic commodities required to support life in remote communities is fuel. Diesel fuel for power generation is loaded at fuel depots located in Winnipeg. An entire year�s supply is shipped in bulk tanker trucks during the short winter road season. If a community runs out, emergency supplies are airlifted in at great expense. Lack of fuel for heating is not an option for life in the harsh climates of the north. Bulk tanker trucks also transport Jet A fuel for aircraft and gasoline to supply cars, trucks and snowmobiles. All fuels are stored in tank farms located in the communities. For the most part, northern stores or independent fuel dealers operate the bulk storage sites. Onsite inventories impose
significant inventory carrying costs. For example, the Northwest Company
delivers approximately 3.5 million litres of diesel to the 11
communities where it supplies fuel and maintains storage. If the
inventory levels were reduced to a month�s supply, the maximum amount of
fuel that would have to be stored would be approximately 300,000 litres.
The resulting reduction in carrying costs, assuming a fuel cost of
$0.70/litre and an interest rate of 3.5 percent would be $80,000
annually. Another benefit of year round supply is the opportunity to
manage fuel prices better by being able to purchase throughout the year
rather than during a short window. Finally, the risks of environmental
damage due to a major tank leak would be lessened.
The supply of transportation
services to the north has not changed greatly in the past three decades.
Some refinements in the winter roads have occurred where sections have
been re-routed to land and away from lake crossings. In addition,
pre-fabricated wooden bridges have been installed over river crossings
to cut the distances and improve the reliability of some winter road
routes. On the other hand, the evidence of climate change is creating
new concerns about the sustainability of existing transportation means.
The warming
climate trend has caused government planners to reconsider the viability
of winter roads. Their response is to begin realigning winter roads over
land to reduce their dependence on ice crossing that are no longer
reliable or safe. The costs per capita of upgrading and maintaining
these road systems is high because of the difficult terrain, including
muskeg and multiple stream and river crossings, and the length of road
that must be built to service a community of only a few thousand people.
Like all
technological and economic changes, better transportation has mixed
social effects. The loss of wilderness setting and traditional
lifestyles could be the outcome of constructing all weather roads. Some
First Nations worry that opening access to hunters from the south and
cottage developments could affect negatively on traditional trapping
areas. At the same time, all-weather roads would reduce the social
isolation. Inter-community travel is expensive by air charter, or
limited to the period of winter roads. The cost of air travel limits
inter-community contact and visiting children who are away at school in
the south. |
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