Measures to support food system localization and waste reduction
Strengthening anti-competitive regulation in Canadian transportation law
Changing food retail
State acquisition of key infrastructure
Urban Consolidation Centres (UCCs)
Ecological biofuels
Measures to support food system localization and waste reduction
Ban air freight of food except emergency transport of food aid.
In the larger societal sense, is there anything that really has to be shipped by air? What’s moving now are primarily luxury items, e.g: fresh Scottish salmon to the US, US cherries to the UK, Canadian cherries to Shanghai, fresh tuna from Guam to the US, asparagus from South America to the UK, beans from Kenya to the UK, flowers all over the world, prepared foods from Thailand to the EU, some meat from Europe to the middle east, domestic lobster within Canada. Various estimates put such perishables at 8-20% by volume of total global air freight (Bridger, 2009), so this is not an insignificant amount as air freight goes, though small as a percentage of total food movement[1].
Regulations limit cargo in regards to safety, but it would appear that under the Aeronautics Act, 1985, c. A-2[2], it is feasible to limit for other reasons: “4.9 The Governor in Council may make regulations respecting aeronautics and, without restricting the generality of the foregoing, may make regulations respecting
o (i) the conditions under which persons or personal belongings, baggage, goods or cargo of any kind may be transported by aircraft;”
From this, it would be feasible to name food as a forbidden cargo unless for humanitarian purposes.
Subsidies to support refrigerated rail in North America
Rail transport of perishables (particularly fruits and vegetables) appears to be minimal. A California study reported that no lettuce, and less than 1% of tomatoes and apples were shipped out of the state entirely by rail, and less than 1% of each was shipped by truck / rail intermodal (Albright et al., 2008:135). However, refrigerated rail transportation of fruits and vegetables may be well-suited for long distance delivery to terminal markets in large urban and regional centers. For example, “A dedicated train began in September, 2006, to make a weekly trip from Wallula, WA to Rotterdam, NY (near Albany) carrying apples and other produce. This project, in which $40 million was invested, has apparently been successful, and plans are in place to operate the service twice weekly on the existing line and add routes between Wallula and California, and California and Rotterdam, NY … However, it should be noted the dedicated rail service still requires 5 days to complete the journey, a significant addition to post-harvest storage time for remote producers compared to local producers” (Albright et al., 2008:126). Trucks can reach eastern markets in as little as 36-40 hours (Porter, 2009). According to one U.S. report on the Washington State Apple Industry, 95% of shipments are via truck and the balance by rail; however, it was forecast that a greater percentage will be shipped by rail to domestic markets over the next several years (Creamer & Jessup, 2008:11, 20).
Refrigerated rail infrastructure is improving. “Past hurdles such as container equipment availability, rail ramp access, visibility, and timeliness have been greatly reduced by greater coordination and collaboration among third-party logistics providers, railroads, and motor freight carriers. And current economic pressures to reduce costs have made the switch to the tracks much more plausible. The price differential of moving long-haul freight via rail is considerable. Fuel spend, insurance rates, and the devaluation of used tractors all contribute to increased pricing among refrigerated motor freight carriers......... equipment has evolved to the point where shippers and carriers can properly care for temperature-sensitive product. Typically, refrigerated intermodal freight is moved in trailer-on-flatcar operations. But the emergence of refrigerated container units allows for more cost-effective double-stack operations” (Anon., 2010). Real time tracking and monitoring of loads is now very feasible.
However, in the medium term it is likely more prudent to start with frozen and long-term cooled fruits and vegetables rather than truly perishable product such as berries and leafy greens. “Given the frozen nature of the cargo, and the care and attention paid to maintaining proper temperatures, shippers can generally accommodate extra lag time in their distribution network to capitalize on a more economical transportation option.” (Anon, 2010). State subsidies can hasten this transition (see next section).
Supporting intermodal transition
Intermodal generally reduces GHG emissions relative to truck (see examples in MacRae et al., 2013). One study concluded that prices for intermodal transport must be 10-20% lower than road transport to be an incentive for a modal shift (Fremont and Franc, 2010). As well, intermodal tends to be uncompetitive on short haul (200-600 km in Europe with a breakeven distance in the 1000km range). Frequent high volume train service for high demand goods could put the breakeven in the 600-900 km range because trucks cannot increase their loads and match the load flexibility of rail. In North America, the largest trains have 4x the TEU[3] capacity (double stacking) of those in Europe, so this reduces the breakeven distance significantly (Higgins and Ferguson, 2011). A recent analysis suggests that increases of 25% in both fuel and labour costs along with the internalization of other external costs, such as pollution and uncompensated infrastructure damage, would result in a reduction of about 33% in the minimum competitive distance of intermodal transportation (Anderson, 2008).
Following on the European approach, a programme that provides grants to shippers who transition from truck to intermodal (including refrigerated rail) should be launched. The EU Marco Polo program[4] is designed to reduce truck freight movement by encouraging shifts to rail and short sea shipping routes and intermodal. The programme provides direct grants on a competitive and co-funded basis, ie., prioritizing funding for the projects that are most likely to have the biggest impact on modal shifts. Recent grants have ranged in size from €0.4 -7.5 million. Modal shifts from truck to rail are typically the largest number of funded projects in any funding cycle.
The French government has provided direct subsidies of 12€ / container on intermodal freight or reduced rent to shippers using public facilities for favoured modes like short sea shipping. In Germany, the government is subsidizing the operating costs of intermodal facilities. These subsidies may not be justified on a strictly job creation basis, so need a wider justification which environmental improvement provides.
Differential rate regulation
Because transportation has larger social purposes, even a perfectly competitive market can never be an efficient allocator of resources related to those purposes. This suggests the need for rate regulation to favour certain modes under the right conditions.
Price regulation was for years a central plank of policy in rail (especially pertinent for Prairie grain but there was a rate structure for all agricultural goods, including potatoes in the Maritimes), ship (for grain), air passenger traffic and trucking (regulated at a provincial level, though at different levels, QC traditional high, AB low) (Prabhu, 1971). In rail, policy in earlier eras was designed to curb rates associated with the monopoly power of the rail companies. The state used to approve contracts between shippers and railways. The rise of trucking and roadbuilding in the 20s and 30s caused trucking to siphon off much of the easy and profitable freight, leaving the railways with the more challenging and costly routes. This generated significant revenue declines, and increased government subsidies and skewed the government-imposed rate structure. Consequently, the state did try to level the playing field somewhat between rail and truck. The NTA67 did contain a conception of rate regulation in the public interest across all modes (section 16), but little on execution (Prabhu, 1971). This conception does not exist so explicitly in the current CTA. Although licensing and route authorities were designed to avoid overcapacity, they did not address issues across modes.
Regarding shipping, coastal shipping was rate regulated indirectly in earlier periods through subsidy agreements with the main shipping lines. Only two internal river systems have recently been regulated, the MacKenzie – Yukon and the St. Lawrence Seaway, with the former more so. Rates on the St. Lawrence River have been regulated since 1938 (Transport Act), but there was a bulk commodity exemption from regulation that included wheat. This made shipping more competitive than rail at the time which aggravated the railways in the 60s when they were under financial pressure. Air freight rates were also regulated.
The CTA gives the Canadian Transportation Agency the authority to set rates under a range of circumstances, much of it related to co-operation between actors, which is the conceptual basis for one aspect of the need for rate regulation, to address coordination and resource sharing issues (see in particular clause 128 on interswitching). But the CTA only addresses air and rail freight. Provinces have set trucking rates for for-hire trucking in the past, either the actual rate or the floor or ceiling rate. Previous versions of the federal Motor Vehicle Transportation Act allowed for rate setting on federal carriers (Prabhu, 1971), but the current version of the Act does not contain such language. The Shipping Act does not regulate rates. The Canada Marine Act allows designated authorities to set harbour dues, berthage and wharfage, as well as duties, tolls, rates and other charges, but does not set freight rates. Such provisions would need to be added to the law. Taking a cross-modal approach to rate setting is the other important piece, to use rates to favour, for example, intermodal over trucking alone. Given the jurisdiction divisions, such authority would likely have to be added to the CTA, referenced in the Motor Vehicle Transportation Act and Canada Marine Act and then the provinces would need to re-establish rate setting language in each of their provincial acts regulating truck activity.
Regulating supply chain coordination
Although there are increasingly examples of competing firms collaborating (for example, using each other’s trucks for backhaul and other transport logistics), market signals are insufficiently robust to hasten the type of coordination required to facilitate the transition to a more sustainable food system. There are already regulatory provisions to “force” cooperation in the system, for example the Fair Rail for Grain Farmers Act. The federal government also intervened extensively in food supply chains to create collaboration during WWII (Mosby, 2014), so this is not a novel approach.
The Competition Act (75.1) could be modified to force supply chain coordination. Another regulation under the Competition Act implies that certain services, in the current language air, are essential to the operation of a market. This provision could be amended to include a range of services that require supply chain coordination to ensure environmental improvements.
Strengthening anti-competitive regulation in Canadian transportation law
As discussed under Goal 3, Reducing Corporate Concentration, Canada does not have strong anti-competition legislation and enforcement. And there is significant concentration in air, rail and global shipping, some of it directly and indirectly facilitated by the state as part of a wider privatization of key infrastructure agenda. Although controversial and poorly studied, this concentration appears to be having negative effects on the movement of agricultural goods, the most recent example being the disruption of containerized export goods (see Get started, Problems, General, Lack of Resilience).
With that as a case example, although foreign commercial vessels must be registered with Transport Canada, the Canada Shipping Act has limited authority over commercial relations of international shipping lines and vessels with international registration. In the US, carriers are required to file their commercial agreements with other carriers and marine terminals with the Federal Maritime Commission. Under Section 6 of the Ocean Shipping Act, the Commission can “seek appropriate injunctive relief” if it “determines that the agreement is likely, by a reduction in competition, to produce an unreasonable reduction in transportation services or an unreasonable increase in transportation cost”. Such explicit provisions are absent from the Canadian Act and it is not clear that such agreements have to be filed with Transportation Canada. The Canada Shipping Act should be amended to provide for such authority. A number of provisions in the Canada Transportation Act (CTA) attempt to control the negative outcomes of concentration, rather than concentration itself. Much energy and debate is devoted to determining whether these measures are actually effective, with farmers regularly complaining about rail and other transport services. A comparable clause should be added tot he CTA to afford Transport Canada more enforcement action.
Changing food retail
Passenger cars are main contributors to transport GHG emissions, with high rates / passenger-km (Edwards Jones et al., 2008). Although data are imprecise, it appears that 20-25% of car trips in urban areas involve food shopping (Purvis, 1994 cited in Pothukuchi and Kaufman, 2000; MacRae et al., 2013). The weekly stock-up trip to a large format supermarket is now a well – established ritual of urban and suburban life and also preferences middle and upper income neighbourhoods with higher levels of car ownership. Improving vehicle emissions standards will have some positive impact (see efficiency section) but not if car use continues to expand. Substitution initiatives are designed to change the relationship between the home, the car and food retail.
Urban design and grocery store siting
See Goal 1, Equitable Access to Food Retail
On-line shopping, box schemes and home delivery
Another strategy is to keep people out of cars and supermarkets. If properly designed with a wide range of products, box delivery schemes are more GHG efficient than traditional supermarket shopping with cars (MacRae et al., 2013). Online grocers have also emerged, especially during the COVID-19 emergeny, that also likely reduce emissions, and this could be improved with a fleet shift to electric trucks and cargo bikes (see Efficiency). The healthy corner store initiatives could be augmented by adding a virtual component that could help combat storage and refrigeration challenges, and reduce the additional time and labour for produce that constrains most small operations. As there are often difficulties finding affordable distributors willing to service smaller locations, using the corner store as an electronic order location for items to be delivered later to one’s residence is a potential option. It could also be connected to UCCs and freight hubs (Toronto Food Strategy 2013) (see below). Given, however, that such initiatives are largely dependent on small entrepreneurs, a targeted small business grant programme for underserved neighbourhoods needs to be established that provides for feasibility studies and finances key start up costs. Many municipalities have small business support services that provide help with business plan development and refer entrepreneurs to grants provided by the provincial and federal governments.
So, in summary, the relationship between home, car and food retail shifts to a scenario with lots of home delivery in electric vehicles, walkable access to small format stores, and alternative food retail, including gardens and mobile markets. Although beyond the scope of this study, neighbourhood electric car sharing would also be valuable for large item shopping trips.
State acquisition of key infrastructure
Earlier sections of this paper outlined how, in earlier periods, the state viewed significant parts of transport infrastructure as part of a public utility / commons. The waterways were publicly accessible with governments owning and maintaining many locks and ports, airspace was controlled by the federal government and owned a national airline, there was a national railway (CNR was a crown company until 1995 and the CPR was build under contract to the federal government, with loans provided at key stages), and governments at all levels largely built and paid for the roads. Much of this public ownership has been privatized, largely not to the benefit of creating a sustainable food system. Much of this infrastructure most be reacquired.
The state needs to own the core infrastructure (but not the companies that use it), which given currently realities is primarily about acquiring the railway tracks. Currently, there is very limited government-owned track but some of it is owned by regional authorities, e.g., Metrolinx in Ontario. The recent efforts of private railways to limit freight interswitching exemplifies the private sector coordination problem (Cross, 2014). There is no incentive for railways to share their rails with other railroads that might offer better service. Provincial and federal governments need to buy all the track from CN, CP and the 36 shortline and regional railroads. The purpose is to create an integrated system across which many railroad companies can run cars. Constitutionally, the federal government would own the track for national lines, the provinces the regional lines that didn’t cross borders, and the municipalities would probably own some commuter track. But the system needs national coordination to optimize movement so a national body is required to perform that function with all governments and the railways participating. Private companies would pay fees to governments to use the track and the fees would be set to encourage rail use over truck.
The federal government needs also to stop port divestiture and reacquire privatized ports. All locks serving freight needs should be under federal control. Toll roads should be owned by governments, although their management can remain in private hands as long as the government has the ability to control tolls as a mechanism to influence mode preference. The federal and provincial government control over licensing of carriers must be maintained in order to manage capacity across the modes. This will require, however, the construction of collaborative mechanisms between provincial and federal authorities.
The recent debates in Canada over oil and gas pipelines (e.g., Northern Gateway, MacKenzie Gas, Enbridge Line 3 Replacement Project, Keystone XL and the Trans Mountain Expansion Project) suggest that the federal and select provincial governments should also acquire transmission pipelines, building on federal purchase in 2018 of Trans Mountain. Gathering, feeder and distribution pipelines could remain in private or public utility control, but transmission pipelines should be owned by the state. Canada has about 117,000 km of transmission pipelines with 73,000 of that federally regulated through the National Energy Board and Canada Energy Regulator (about 10% of pipelines, primarily large transmission) and the rest provincially, particularly BC, Alberta and Sask (CAPP). Private firms have little incentive to reduce pipeline use and the number of pipelines, but as oil and gas consumption needs to decline, the federal government can use ownership of this key infrastructure to apply pressure on private oil and gas firms to reduce both emissions and consumption. State ownership also creates the possibility of greater environmental stewardship and farmland protection (see Goal 5) and collaborative relations with other groups, including indigenous peoples.
Urban Consolidation Centres (UCCs)
“A widely adopted practice to tackle the “last mile” distribution problem is the establishment of Urban Consolidation Centres (UCC). A UCC is a logistics facility for the last mile collection and distribution of goods which is situated close to the urban area that it serves. UCCs are used by large freight transport service providers for operational purposes near cities, functioning as a junction between urban and interurban parts of the transport chain. The main freight operations carried out in UCCs are:
- handling of cargo
- loading and unloading
- warehousing
- added value services.” (ENCLOSE, 2014)
In urban areas, food trucks are typically very multi-step. In the UCC model, shipments with the same origin and destination are consolidated into a single vehicle, preferably electric (see discussion under Efficiency) to reduce the number of vehicles employed. While consolidating deliveries is environmentally positive, high initial investments and monopolistic trends among freight companies provide a challenge (ENCLOSE, 2014). UCCs require collaboration among competitors, usually more possible among small than large operators.
“Amongst the numerous successful cases of urban freight consolidation centres that were presented in literature, vehicle trips were reduced by 30-80%, and total vehicle kilometres travelled (VKT) were reduced by 30-45%. This achieved emissions reductions between 25-60%.” (TAF, 2012). Another review concluded that load consolidation and better route planning led to 15-33% truck trip reductions in some cases (Higgins and Ferguson, 2011). On a wide scale, this can contribute to lower traffic congestion, more efficient motor performance, less illegal parking and less noise in high traffic delivery areas. Deliveries, thus, can occur more quickly and reliably with less need for shops to hold inventory on site.
UCCs can work for a wide range of food goods and delivery points, especially those taking small deliveries from multiple suppliers such as restaurants and other food service operations. However, given the challenges of UCC facilities and electric trucks, it may not work well for frozen foods.
Since significant public benefits can accrue from UCCs, and it involves significant collaboration from traditional competitors which the market may not encourage, it makes sense for governments (particularly the municipal and provincial ones) to be involved in establishing them. The type of UCC model will impact the support needed from the state. In some cases, UCCs are public facilities, with space rented to freight companies and third party logistics providers. In others, they are entirely private operations but with state subsidies and loan guarantees for buildings and operating costs. Land use planning changes and provision of municipal services may be additional state supports. Other UCCs can be hybrids, with private sector management, but using public land and facilities, included a state-provided fleet of electric delivery vehicles.
No UCCs currently exist in Canada, though in Ontario, a private distributor, 100 km foods, carries out some of these functions in its business model. It aggregates supply at the farm level and then delivers to small batch buyers in downtown Toronto, particularly restaurants wishing local and sustainable food.
Ecological biofuels
Much research and many pilots with biofuels are underway in autos, trucks, ships and planes, with many policies for fuel blending. Much of this work has been misdirected. From an agroecological perspective, the case against conventional grain-based ethanol is strong (Robertson et al., 2008; Piniero et al., 2009; Pimentel et al., 2009), especially when considering the opportunity costs of growing conventional corn compared to more ecologically robust production scenarios. Canola-based biodiesel is not viable because the crop demands too much from biotic resources and is not competitive with weeds, requiring significant human intervention. The biodiesel industry, incentivized by ill considered regulatory mandates and tax credits for biofuels, is already demanding more canola (Pratt, 2022) than is ecologically appropriate, given that we already have too much canola on the landscape to meet sustainability and biodiversity requirements. Soybeans have many food uses that deserve priority over biofuels. Crop biomass serves so many functions on an ecological farm (bedding, building soil carbon and nutrient reserves, composting processes), that for most farms using it as a fuel feedstock is inadvisable. There may be a role for non-food crops such as camelina and jatropha but very nuanced land use decisions will be required, demanding sophisticated policy interventions since the market has proven itself incapable of such effective resource allocation.
MacRae et al. (2010) have set out the ideal characteristics of an energy crop integrated into a farming operation using agroecological theory. “Ideally, land that was degraded .... or at least marginal for annual food or feed crops or poorly managed pasture, and could have been creating negative environmental impacts as a result, is converted to an energy crop that meets the above criteria. Less desirable is conversion of well managed pasture to energy crops. Least desirable is conversion of natural habitats to energy crop production, especially annual plants because the loss of soil carbon significantly reduces or eliminates the benefits of generating alternative fuels.” No studies examining land use change have modeled such an approach and these conditions are much more limiting than typically assumed in LCAs.
Ultimately, ecological approaches to biofuels are more likely viable for solid rather than liquid fuels. This means a somewhat limited role for land-based biofuels in transportation. Farnesane, derived from sugar cane in an industrial fermentation process, has recently been tested in airplanes. It remains, however, dependent on ecological land use approaches to minimize emissions associated with land use change. However, industrially produced transportation fuels, or third generation biofuels with less land competition, may be more promising. Microalgae has received some attention of late. In a meta analysis of 15 LCAs, the authors (Collet et al., 2013) found that optimal conditions included:
- A suitable electricity mix with relatively low GHG emissions
- The use of wastewater or seawater, CO2 enrichment processes and digestates as byproducts of other industrial processes and the minimization of synthetic N and P fertilizers
- Photobioreactors having higher yields and less emissions than raceways
- Dewatering and drying processes with minimal new energy and oil extraction with limited hexane
- Generation of co-products
Microalgae production can be a CO2 sink but then the CO2 is released in combustion, so what is the net balance? At this stage the energy in / energy out ratios may not be sufficiently favourable though few studies have properly constructed a system boundary for the process.
The use of inedible food waste products may have utility and currently most renewable biodiesel in Canada comes from waste cooking oil and tallow (Navius Research, 2022). Significant research is underway to explore additional possibilities (Howell, 2022). However, given efforts to reduce food waste (see Goal 5, Reducing food waste), it is not clear there will be sufficient volume to make them viable biofuel feedstocks.
Long in consultation and development, it is critical that the federal government adopt a Clean Fuel Standard that supports ecological approaches to biofuels (cf. discussion in ECCC, 2022). However, as of mid-2022, the federal standard will likely be a floor approach that does not force provincial standards in an ecological direction. Environment and Climate Change Canada have also backed away from a more aggressive approach to land use rules that would make biofuels less desirable (Pratt, 2022). BC is the first province to announce a sustainable biofuels mandate for aviation fuel but there is no indication it will be tightly tied to ecological biofuel production.
Endnotes:
[1] Weber and Matthews (2008) report air freight as 1% of total food imports but equivalent in CO2 emissions to those goods shipped.
[2] http://laws-lois.justice.gc.ca/eng/acts/A-2/
[3] Twenty-foot equivalent unit
[4] http://ec.europa.eu/transport/marcopolo/about/index_en.htm; also Commission of the European Communities, (2001); European Commission (2011)
