Southern Railway of B.C. is a short-line freight operator in Vancouver's Pacific gateway. Like other short-line operators, we provide a first-mile, last-mile switching service to our customers, providing them with a critical transportation link to our class 1 railway partners.
In the case of SRY, we connect with the CN, CP, and BNSF in two locations in the greater Vancouver area, with access to the underutilized international rail crossing at the Huntingdon-Sumas border. This connectivity expands the reach of the class 1 railway into areas of the industrial land base within Vancouver.
SRY's role as a short-line operator is to support the fluid cycle of loaded railcars to their final destination and return the railcar to the class 1 in the shortest amount of time. SRY provides a complementary service to class 1s so they can focus on efficiencies through the major rail corridors. Currently, Southern Railway handles around 69,000 car loads annually, and we have experienced consistent and continual growth on a year-over-year basis.
We anticipate railcar volume to increase over the short term with commodities with focused growth in key sectors, including agriculture commodities; export container stuffing, and particularly in the production of animal feed based in the Fraser Valley; and chemical and fuel transport to support various industries, including support to the pulp and paper industry via SRY's Annacis rail-marine barge loading facility.
We also handle import and domestic vehicle handling via WWS and Hansen's. This comprises Canada's largest auto-handling facility on the west coast.
SRY is also well positioned to take advantage of new short-sea shipping opportunities with access to rail-marine interface.
It's not all positive news on the short-line business model. We are being squeezed from many different sides. We experience the same challenges that face the class 1s in terms of increased government regulation, more stringent environmental regulations and the need for capital infrastructure projects. But short-line operators are on an entirely different economic scale as far as operations are concerned. Government support and financial incentives in the form of capital grants or incentive-based programs specifically designed to help short-line railways are needed. Typically, SRY invests around 12% of its revenue toward projects that are necessary to sustain existing operations in a safe manner.
Targeted short-line funding programs would enable short-lines to spend beyond sustainment and invest in projects that support future growth for the movement of goods both internationally and domestically, address capacity constraints and improve efficiency, and invest in projects that reduce public frustration with railways.
Within the background document provided to the committee, we also refer to other key challenges ahead for short-line railways. As mentioned in the previous panel, preserving industrial land is critical for sustaining the efficient flow of goods through Canada's Pacific gateway. Also concerning is the conversion of land to residential use. Government support in maintaining sufficient proximity between railways and heavy industry from dense residential development is important for reducing public frustration with railways and industry.
We also would like to maintain our competitiveness with other modes of transportation. A short-line railway's largest competitor is trucks, which operate on the publicly funded road network. A modal shift away from rail would increase congestion and maintenance on roadways and increase emissions.
In closing, SRY provides a critical transportation link between local business and the North American rail network. When the short-line rail operator is inefficient, there's a ripple effect across the supply chain, so short-lines must remain aligned with our class 1 partners. Government support would enable short-lines to invest in capital infrastructure projects like bridge upgrades, new signal systems and grade separations, which will help maintain our competitiveness and efficiency. All of these investments would ensure that we don't become the choke point within the system.
Thank you.