Analysis of freight transportation in the Yukon economy

Transportation has always been of vital importance in the Yukon because of the small population, the harsh climate, and the remoteness from large markets. It has imported almost all of its industrial and consumer goods, supported by the export of a limited tonnage of high value mineral concentrates. Little growth has occurred in the past fifteen years in the value of mineral production, as it has remained fairly constantly at about $14 million. At present, though, the Yukon is in a stage of transition as many ore bodies are being brought into production. The effect on the Yukon economy will be substantial, as one estimate sees the dollar value of production increasing more than three-fold by 1975. The objective of this thesis is to determine the impact of this economic change on the total transport system. It is thus necessary to establish a measurement of the present level of freight services (the year chosen is 1964) and to establish a forecast of freight services for 1975. The measurement and forecast are then used to determine in what way the economic change may influence transport rates and services. The main sources of information for this paper were the various transportation and mining companies that are engaged in Yukon activities. Considerable use was made of the 1966 Stanford Research Institute study that concerned itself with the economics of paving the Alaska Highway. While many other sources were also consulted, they were generally of lesser importance. The growth rate of goods going north into the Yukon is forecast to be a moderate 5% per annum. The growth in the amount of ore concentrates going out of the Yukon should be considerably larger. For every ton moving north into the Yukon in 1964, 1.5 tons of freight moved out of the area, while by 1975 the ratio should increase to 6.5 tons for every northbound ton. As the present and planned mining developments are principally in the area north and northeast of Whitehorse where the White Pass and Yukon Route has the competitive advantage, most of the direct increase in freight traffic should benefit the White Pass and Yukon Route. Other transport companies should benefit also, but more due to indirect effects of the mining developments on freight traffic. The increase in the level of freight should make possible a higher utilization of present facilities and lower average costs. It appears that especially for the White Pass and Yukon Route the potential for reductions in freight rates should increase.Business, Sauder School ofGraduat