The Bayside Connection worked because of the relatively close proximity of food production plants in Boston/Gloucester to the cold storage in Bayside NS, allowing just-in-time deliveries of truckload lots of fish from cold storage to factory. This flexibility justified the expense of the cargo being shipped all the way from Dutch Harbor to Nova Scotia through the Canal.
The shippers that used the Bayside Connection could ship the product across country from Vancouver/Prince Rupert by Canadian Rail, but not to Bayside because the real railroad tracks there were removed years ago. Also, Canadian Rail tariffs arenāt cheap, and the track out of Prince Rupert has problems with heavyweight reefer cars. And reefer cars arenāt as desirable for just-in-time deliveries. Some food production plants donāt have rail spurs. So the warehousing and transportation equation changes completely.
Also: some companies barely avoided a total of $400 million in fines. Are they going to roll the dice again?
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The logistical problems you laid out make sense so it sounds like your prediction is that this cargo will not go overland via rail from either Seattle or Vancouver.
Which brings us back to a Jones Act ship going from West coast to East Coast via the canal for only 50k MT of cargo per year. Compared to the cost of that, would trucking be utilized instead?
As far as this, I believe the fines were due to the very obvious attempt to circumvent the clear intent of the Jones Act. If the cargo were actually moved thousands of miles via rail, I feel like the exemption would be satisfied.
The way the trade is done now by Jones Act operators is that the cargo is loaded in Dutch Harbor (or King Cove, or other Western Alaska ports) and unloaded in Seattle/Tacoma/Bellingham. Four companies do this: Coastal Transportation Inc., Matson, AML, and Samson. Then the cargo is either trucked or sent by rail to Boston/Gloucester/Jefferson WI.
In the judgeās ruling she used as her justification for finding the Bayside Connection illegal that the 3rd Proviso allowed ātransportationā by Canadian Rail, and nothing else. Beside the fact that the Railroad to Nowhere was an obvious scam, I wonder in future litigation if the legal precedent has been set that ātransportationā must be completely by rail, from dock to factory, no intervening trucking allowed. The judge didnāt say this explicitly. But anybody trying to ship U.S. coastwise cargo by Canadian rail would have to keep this in mind.
Customs and Border Protection is the agency that enforces the Jones Act. They are the ones that shut down the Bayside Connection and levied the $400 million in fines. They were quite militant. Anyone who tries a dodge with trains/trucks even remotely similar would have to keep that in mind.
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Thanks for the info.
This was good to read also. Itās long past time for some militant enforcement of the Jones Act. Hopefully operators in the GOM took notice.
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