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Eight fixes for an ailing grain shipping system

Railway in fog
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Here are excerpts from the Crop Logistics Working Group (CLWG) on its eight recommendations to improve the grain-handling and transportation system. The full report can be found here.

Recommendation 1: Enhance Transparency in the Rail Market

CLWG members request that the government encourage CN and CP to accurately report car order fulfilment data in a way that is reflective of all rail cars ordered by shippers, and is not artificially restricted by the individual railway’s car-ordering programs. If the rail companies are unwilling to amend their methodology to reflect true demand and to provide this data voluntarily, it is encouraged that the government amend current transportation information regulations to compel provision of the data required and at a level of detail sufficient to allow for the establishment of adequate measures.

Recommendation 2: Enhance CTA Provisions and Processes Related to Commercial Contracts

In a free market, a supplier who fails to meet commitments or refuses to make commitments loses the business. No such market discipline exists for rail companies. Provisions to allow for penalties or liquidated damages to be assessed to rail companies are intended to simulate the result that the market would otherwise provide; that is, impose a consequence for failing to meet or make commitments. Therefore, amendments are needed that provide for financial consequences for non-performance in SLAs (service-level agreements).

Recommendation 3: Enhanced Powers of the (Canadian Transportation) Agency

Where the agency sees trends in service failures, it would be useful for the agency to have the authority to undertake investigations on its own initiative. The agency is in the best position to recognize such trends and shippers may be reluctant to bring complaints forward for fear of retaliation and because of the costs and uncertainty of outcome.

Recommendation 4: Continued Assessment of Grain Movement Volume

In preparation for the case where rail company performance be determined to be inadequate, a mechanism that allows for the reinstatement of minimum volume requirements must be retained. To this end, it is recommended that the amendment to the CTA (Canadian Transportation Agency) in the Fair Rail for Grain Farmers Act allowing for minimum volume requirements to be imposed through an OIC (order-in-council) be maintained. Furthermore, it is also recommended that any use of this authority is supported by penalties that are sufficient to provide adequate incentive for the rail companies to take action.

Recommendation 5: Enhanced Competitive Tools

To enhance the applicability of interswitching it is recommended that the 160-kilometre limit for interswitching distances, as enabled by Bill C-30, be made permanent. Other suggestions to enhance the effectiveness of interswitching include: ensure physical switches are operational, and clarify who is responsible for crew maintenance and siding scheduling.

Recommendation 6: Expand Agency Involvement in the Rail Line Discontinuance Process

It is recommended that the agency be permitted to investigate cases of rail line abandonment. It is also recommended that the agency be permitted to intervene in the discontinuance process to ensure that prospective buyers are given the proper opportunity to preserve the infrastructure and ensure continued service. Allowing the agency to become more involved in the process will ensure that, at a minimum, the existing process is followed, as well as promoting full consideration of economic impacts and assessment of options to maintain use of the rail line.

Recommendation 7: Expansion of Crops Listed in Schedule II to the CTA

It is recommended that soybeans and chickpeas be added to the list of crops in Schedule II to ensure they have the same regulatory protection as other western Canadian crops. Furthermore, it is proposed that Schedule II be periodically reviewed to ensure that it captures all crops grown extensively in Western Canada.

Recommendation 8: Increased Protection and Support for Producer Car and Other Small Shippers

These shipping methods provide alternatives to the general grain-handling and transportation system, and allow stakeholders to take advantage of a wider range of marketing opportunities. Without enhanced legislative and regulatory protections, these shippers will gradually receive less service until such point that they are no longer economical. More specifically, the continued ability to ship producer cars and for other small shippers to receive adequate service needs to be recognized and ensured.

About the author

Reporter

Shannon VanRaes is a journalist and photojournalist with the Manitoba Co-operator. She has previously reported for the the Metros, Winnipeg Sun, Outwords Magazine and the Portage Daily Graphic.

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