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11/16/2010



Rail News: Rail Industry Trends

Canadian rail shipper coalition calls on feds to 'more effectively' address service issues


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Today, the Coalition of Rail Shippers (CRS) announced it’s calling for early action, including federal policy measures, to determine long-term solutions to ongoing rail service problems resulting from a lack of rail competition in Canada, according to a prepared statement.

Members of the coalition — a group of 18 shipper associations — met in Ottawa yesterday to finalize their response to an interim report of the federally appointed Rail Freight Service Review Panel. Coalition members believe the panel’s recommendations “did not go far enough” to address “a lack of effective competition and inadequate service.”

“CRS agrees with the analysis that identifies the major cause of rail service failures as ‘railway market power,’ which leads to an imbalance in the commercial relationships between the railways and other stakeholders,” CRS officials said. “However, the coalition notes there is a disconnect between this conclusion and the recommendation to give the railways three more years to voluntarily address the service problems. At the same time, the panel said the government should impose regulatory measures if the railways fail to voluntarily make the necessary changes by 2013.”

A final report is expected by year’s end and there’s still time for the panel to consider “more robust recommendations” that would address the root cause of rail service failures and ensure there are acceptable solutions for the future, they said. CRS members are calling on the panel to include a “fair and balanced” dispute resolution process, consequences for non-performance and independent monitoring of rail service related to performance standards in the report.

CRS members include the Animal Nutrition Association of Canada; Association of International Automobile Manufacturers of Canada; Canadian Association of Recycling Industries; Canadian Canola Growers Association; Canadian Dehydrators Association; Forest Products Association of Canada; Grain Growers of Canada; Inland Terminal Association of Canada; Pulse Canada; Shippers Council of Canada; Western Canadian Shippers’ Coalition; Western Canadian Wheat Growers Association; and Western Grain Elevator Association.

CN and Canadian Pacific officials contend that all stakeholders in the transportation supply chain — including shippers, receivers, terminal operators, port authorities, truckers and steamship lines — are accountable for system performance and not just the railroads. The Class Is also have developed “innovative, market-driven solutions” to service-related issues as the federal government had asked at the outset of the panel’s review, according to CN and CP. In addition, the railroads have signed supply-chain collaboration and service-level agreements with major Canadian ports and terminal operators that specify performance targets, service measures and balanced accountability among all supply-chain participants.

In statement issued in October, CP officials said: “We believe that commercial principles coupled with a stable regulatory regime is the best approach to promote supply chain coordination and investment. The panel's own research … confirmed that the current regulatory regime for rail in Canada is robust. And so we do not agree with the panel's recommendation that additional regulation may be required post-2013.”


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