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Competitor disagrees with BC Ferries' drop trailer argument

A senior official with a private company competing with British Columbia Ferry Services Inc.'s new drop trailer business says he's unconvinced by arguments the publicly-owned company submitted to the B.C. Ferry Commissioner.

"Frankly, we think the argument B.C. Ferries has put forward is flawed," said Joel Loreth, a vice president of 3PLogix Group of Companies, which owns Van Isle Barge Services Ltd..

In an Aug. 31 submission to commissioner Martin Crilly, B.C. Ferries argued that its drop trailer service is priced in a way that reflects the companies “direct costs and an appropriate proportion of indirect costs associated with providing drop trailer service,” the Tyee reported last week.

In June the provincial government passed a law giving the commissioner the power to determine “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 over competitors.

Loreth said his company has met with Crilly and has been told it has until Oct. 31 to respond to the arguments B.C. Ferries submitted. The commissioner has hired the accounting firm PricewaterhouseCoopers to help assess the submissions, he said.

"We're not sure it's an accounting issue. It's an economic principle issue," he said. A monopoly-based, government-backed company is very different from a private sector company, he said. "They're just two different worlds."

B.C. Ferries' submission includes an appendix with the amounts it charges, but that part was withheld when the commissioner's office publicly released 64 pages of the document.

"We asked to see the numbers and we were turned down," said Loreth. He expressed doubt that B.C. Ferries is charging enough to cover long-term costs to replace things like terminals, ramps and its head office. "We don't think they're even close."

Seaspan Coastal Intermodal, part of the Washington Marine Group, complained in 2009 about B.C. Ferries entering the business of taking commercial truck trailers between the mainland and Vancouver Island. The company hired former deputy to the premier, Ken Dobell, to make its case to government officials.

The government recognized the seriousness of the issue when it changed the law last year, said Seaspan spokesperson Kelly Francis in an e-mail message. “We will be participating fully from a stakeholder perspective,” she said.

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

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