A CN unit leads several Trudeau hoppers - Date/Photographer unknown.

16 March 2012

Shippers Frustrated at Lack of Rail Service Agreements?

Canada - Negotiations to work out a system of binding level-of-service agreements between railways and shippers are faltering because railways refuse to compromise, say shipper sources.
 
The Conservative government continues to promise legislation that will require service agreements between the two sides that are enforceable with penalties for non-compliance, but a bill will likely not appear until at least autumn, two years after a federal panel made the recommendation.
 
In that event, it would likely not be law until next year.
 
In late 2010, a rail service review panel report commissioned by the government noted a poor railway service record, partly because of a market imbalance between railways and shippers. It recommended binding level-of-service agreements backed up by legislation that could enforce penalties for lack of performance on either side.
 
Ottawa then appointed former Alberta treasurer Jim Dinning to facilitate a deal between the two sides while promising legislation.
 
Dinning's mandate expires in May and a shipper representative said last week that little progress has been made.
 
"There is a high degree of frustration from the shipper community that the railways are not willing to consider service level agreements that, with certain elements outlined in the final report, should be mandatory," he said.
 
"There is frustration that the railways are not prepared to make any movement at all."
 
On 6 Mar 2012 in the House of Commons, Saskatchewan Liberal Ralph Goodale complained that the stalemate means grain shippers continue to receive poor service with no guarantees of improvement.
 
He demanded that legislation be tabled by the time Parliament rises in June so it can be examined over the summer and debate begin in early autumn.
 
In a later interview, Goodale said forcing railways to agree to service terms with shippers is more important this year because the CWB is losing its marketing monopoly and its clout to demand better rail service.
 
"The only solution here is a legislated solution," he said.
 
"The railways are not going to move unless a law is passed telling them because they hold all the cards and have had for a very long time."
 
He said the CWB had the clout to challenge the railways and win several hundred million dollars in compensation. A grain company would be reluctant to challenge the carrier for fear of retaliation, he said.
 
Transport minister Denis Lebel made no timing promise but reiterated an earlier promise that legislation will be produced. He suggested it would not be written until Dinning is finished his efforts and files a report.
 
"He has held many meetings with stakeholders," Lebel said.
 
"The facilitator's work will inform the legislation that our government is committed to introducing. We will continue and we will deliver the job."
 
Questioned about the issue 8 Mar 2012 after a speech to the Canadian Cattlemen's Association, agriculture minister Gerry Ritz said the railways should be co-operating.
 
A Crop Logistics Group appointed by Ritz to deal with transportation issues in the aftermath of the end of the end of the CWB monopoly is developing "a good roadmap forward," he said. "It would be unfortunate if the railways did not recognize that."
 
He said legislation will be approved as a backstop to make sure service agreements are honoured.
 
Barry Wilson.