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Drop trailer pricing is fair, BC Ferries tells regulator

British Columbia Ferry Services Inc. has made a submission to the B.C. Ferry Commissioner arguing that the publicly-owned company has no unfair competitive advantage over other companies transporting drop trailers between the mainland and Vancouver Island.

“BC Ferries' drop trailer service is priced in a manner that reflects BC Ferries' direct costs and an appropriate proportion of indirect costs associated with providing drop trailer service,” the company argues in an Aug. 31 submission to commissioner Martin Crilly, 64 pages of which are posted on the commission's website.

The amounts the company charges are in an appendix marked “confidential” in the table of contents and severed from the document.

Competitors including Seaspan Coastal Intermodal, part of the Washington Marine Group, complained in 2009 after B.C. Ferries began a pilot project taking commercial truck trailers to the Island saying the company's government subsidy gave it an unfair advantage. The company hired former deputy to the premier, Ken Dobell, to make its case to government officials.

A law passed in June gave the commissioner the task of determining “whether the ferry operator is pricing the service below the direct costs and an appropriate proportion of the indirect costs with providing that ferry transportation service” or if it has an unfair advantage.

“B.C. Ferries is competing on a fair basis with the incumbent providers of drop trailer service,” the submission to the commissioner said. Any advantage comes from the company being efficient, not from any unfair advantages gained through the company's public subsidy or taking ownership of ships and terminals from the government, it said.

“The Cost of Service analysis performed by BCF using an industry-standard cost allocation methodology demonstrates that the prices for drop trailer service are well in excess of B.C. Ferries' direct costs and an appropriate proportion of indirect costs associated with providing the drop trailer service.”

The company also argued that offering the service is in line with its mandate, set by the government in 2003, to take a commercial approach to its operations. The drop trailer service is good for both the trucking industry and all other ferry users, it said.

The commissioner, if he finds there is an unfair advantage, can order B.C. Ferries to contract out the service or raise its tariffs.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here.

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