Canadian rail shippers slam railways' 'virtual monopoly'

[John Ashworth]

Canadian rail shippers slam railways' 'virtual monopoly'

by Procurement Leaders Staff
08:47 03 July 2012

A Canadian trade group has called on the federal government to revise the Canada Transportation Act to improve rail freight services and end the "virtual monopoly" of the nation’s railway companies.

The publication of an open letter by Coalition of Rail Shippers (CRS) to minister of transport, Denis Lebel, followed last week’s release of the Dinning report after efforts failed to bridge the gap between rail customers and the railways.

CRS argued that, at that time, the government had pledged to bring in legislation this autumn to give shippers the right to service agreements with the railways and a process to establish such agreements should commercial negotiations fail.

"The government has asked stakeholders to engage in the process and rail shippers are keen to do so," said the chair of the CRS Bob Ballantyne.

"We are proposing measures that will address the imbalance in market power enjoyed by the railways. It is critical that the proposed legislation succeeds in establishing a climate where normal commercial negotiations can take place."

The CRS principles include services and obligations, communication protocols, performance standards and consequences for non-performance.

“Many resource-based rail customers are captive to the virtual monopoly power enjoyed by the railways. This unacceptable imbalance of power has led to inadequate service which impacts the competitiveness of Canadian businesses and their ability to serve export markets. Shippers look forward to working with government officials over the summer on this legislation to redress the imbalance," added Ballantyne. "Our goal is to have legislation that will level the playing field between customers and railways for the benefit of job creation and economic growth for all of Canada."