A coalition of Canadian rail shippers, representing 18 industry associations, including in the forest sector, are calling on the Canadian government to implement regulatory action now to overcome a "lack of competition" in the Canadian rail sector.
The Coalition of Rail Shippers, representing hundreds of companies and hundreds of thousands of workers, is responding to the findings and recommendations of the Rail Freight Service Review Panel. The panel delivered its findings last month, recommending that CN and CP be given a chance to improve services in the next three years. The panel's two-part strategy calls for legislation as a fall-back position if commercial measures prove unsuccessful.
"Canada's shippers need regulations at an early stage to rebalance the bargaining power between railways and their customers," said Bob Ballantyne, chair of the Coalition of Rail Shippers, which includes such organizations as the Forest Products Association of Canada and the Mining Association of Canada.
Those two groups represent companies like Canfor, West Fraser and Teck Resources, all of which have operations or interests in northern B.C.
"Rail service is too inconsistent to provide the reliable and predictable service that Canadian industry needs to remain competitive. We would like a regulatory backstop to be brought in now, not years from now," said Ballantyne.
The demand by the rail shippers coalition follows a similar call by the Forest Products Association of Canada to immediately implement regulatory changes to improve rail services.
The forest industry cited the problem as inadequate service with companies generally having little or no ability to take their business elsewhere as in many cases the railways have monopolies. For example, CN is the only railway that operates in northern B.C.
The three-person review panel, which included a former CN executive, found that although the railways have taken steps to address service issues, problems still remain. The panel found the major cause of rail service problems was railway market power.
Their recommendations called for the railways and shippers to continue to develop commercial measures that include notification of service changes, service agreements that set standards, a dispute resolution and enhanced reporting of performance.
The panel also recommended a review in 2013 to determine whether service is adequate. If it is not, the commercial measures should become requirements under law. The panel suggested working on the legislation so that it could be put in place immediately if the 2013 review finds service is inadequate.
CN has cited concerns over the panel findings, saying some recommendations are disconnected with the factual findings. CN has pointed to a performance review which showed solid railway transit times, no discrimination on service, no evidence of structural market issues and a robust regulatory framework.
CN also noted that shippers, receivers, terminal operators, port authorities, truckers and steamship lines were also accountable for system performance, not just railways.
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