Shippers say it’s no coincidence that service has deteriorated since introduction of legislation giving them more leverage
Freight service improved when Ottawa was preparing legislation last year to balance the market power of shippers and the railways, but has since slipped back to unsatisfactory levels, shipper representatives say.
As “recently as two weeks ago we had mills just about shut down because they couldn’t get boxcars in Western Canada, and not just one,” Western Canadian Shippers Coalition spokesman Ian May told the Commons transport committee, which is studying the bill.
He said shippers don’t think it’s a coincidence that service has deteriorated since the legislation — which didn’t give railways what they wanted — was introduced in December, he said.
“I can tell you that the operating model… is asking for 40 cars and being told, ‘Well, I can give you 30,’ and then receiving 20,” he told the MPs.
While the legislation won’t solve all the problems, “we expect an improvement. It may be worse than you folks realize,” said May.
He was joined by representatives of the forest products, grain, coal, propane, fertilizer and other industries that ship by rail in large quantities.
Nearly two-thirds of railway customers surveyed by the the Coalition of Rail Shippers say poor service has cost them money.
“The reality is that many shippers have limited choices when it comes to shipping their products,” said coalition chair Bob Ballantyne.
“It is therefore necessary to use the law to give shippers more leverage to negotiate service agreements with the railways.”
The group asked for six amendments to stiffen the legislation to “limit the opportunity for railways to mount legal challenges designed to either frustrate the intent of Parliament, delay decisions and lead shippers both large and small into expensive legal battles,” said Ballantyne.
The executive director of the Western Grain Elevator Association noted grain elevators must pay a penalty if they don’t load a unit train in 24 hours, but there’s no penalty if a railway causes delays that cost shippers money.
“This is a gap we’re trying to do our best to make sure this legislation corrects,” said Wade Sobkowich.
The result is extra charges for farmers because such delays mean extra charges for ship demurrage and even lower payments from the ultimate customers, said Richard Phillips, executive director of the Grain Growers of Canada.
“At the end of the day it all does come back down to the farmer,” he said. “We’re the ones who suffer when things don’t work properly.”