The head of Canada’s biggest grain company is deeply disappointed with the Canadian Transportation Act review panel’s report.
“I think the report (released in February) misses the point,” said Richardson International’s president and CEO Curt Vossen in a recent interview. “Very little of the concerns and observations put forward by shippers are included in that report. I look at it and I am disappointed. And it’s not just grain. I think all shippers’ views have largely been dismissed.”
The uncritical report simply fortifies the railway view that all is well and they did what they need to do, Vossen said, a view he doesn’t share.
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“I don’t agree. I think the report is very remiss and very insubstantial in its conclusions,” he said.
Vossen said he agrees with those who think the report, based on industry consultations overseen by former cabinet minister David Emerson, reads as if it were written by the railways.
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The report recommends the maximum revenue entitlement (MRE) be phased out over seven years. That regulation caps the total amount of money the railways can collect for shipping grain, while guaranteeing the railways a profit and freight rate flexibility.
Most farm groups and the Western Grain Elevators Association (WGEA), which represents the West’s major grain companies, say removing the MRE will result in higher shipping costs without improving service.
The railways contend regulations, including the MRE, discourages railway investments.
“In CN’s view, normal commercial relationships and a stable regulatory environment are essential for an effective, well-functioning rail transportation marketplace, including that for grain,” CN spokesman Mark Hallman said in an email.
The report also failed to recommend the railways be subject to penalties when they fail to meet service levels agreed to in contracts with grain shippers — something the WGEA has sought for several years.
Vossen isn’t the only grain company boss to condemn the report.
“They should throw the report in the garbage,” Paterson Global Foods chief executive officer Andrew Paterson told Reuters in February. “It is very railroad friendly.”
No accountability
For grain companies it boils down to a lack of railway accountability, Vossen said. They can promise to deliver a certain number of cars during a specific period, but when they don’t there are no penalties. However, in contrast the grain companies must load and unload cars within 24 hours.
“If I fail to do so I lose my incentives or I’m penalized,” Vossen said.
“You want to hold us accountable 100 per cent of the time, then we want to hold you accountable 100 per cent of the time.”
Vossen said he doesn’t hold the railways accountable for things they can’t control, such as the coldest winter in 100 years in 2013-14.
“But I blame them for the things that were under their control — like cutting back on crews and power and not allowing for surge capacity,” he said. “I blame them for that because it was very short sighted and self-serving.”
