No shipper-railway consensus on service agreements

Progress Jim Dinning says railways and shippers 
should give his “three-tier” service proposal a chance

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Shippers and the railways remain divided on what should be included in federal legislation to improve freight service, says a report presented to Transport Minister Denis Lebel.

Jim Dinning, a former Alberta cabinet minister appointed last fall to facilitate discussions between the carriers and their customers on freight service agreements, said some progress was made in six months of talks.

He urged both sides to give a proposed three-tier service proposal a fair chance. Basically it would set different levels of service for small, medium and large shippers, based on annual carloads.

This would represent “a workable solution and an improvement over the status quo,” he added.

Dinning’s report came as the opposition parties pressed Lebel to move on legislation promised last year granting shippers a right to a service agreement and a process to impose one if negotiations with the railways fail.

Lebel said in a statement June 22 that he hopes the two sides can build upon the progress achieved during the facilitation process. He urged both sides to employ five Dinning recommendations in any future commercial negotiations.

Meanwhile the government will proceed legislation this fall.

The minister said he would discuss the proposed bill with shippers during July.

Implement service review

NDP Transport Critic Olivia Chow has presented Parliament with a bill to create a more balanced relationship between the carriers and shippers. She said her bill was needed to end government stalling since the release in December, 2010, of the final report of the Rail Freight Service Review.

Meanwhile, Liberal MP Ralph Goodale has called repeatedly for the government to move on implementing the service review.

Chow said the railways have mounted a vigorous campaign against the service proposals “that has reached right into the Prime Minister’s Office.

“The railways are making their best profits ever, but not sharing any gains with their customers,” she said.

Spokesmen for CN and CP said the railways have made huge improvements in service reliability in recent years and warned legislation won’t improve the situation.

Chow told the Commons that her Rail Customer Protection Act “would give every rail customer the right to have service agreements with rail companies, including performance standards, consequence for non-performance including penalties, proper notification for service changes and a requirement to use the dispute resolution process in the event of a disagreement.”

“Rail customers in Canada have suffered losses for years due to unreliable freight services — which also cost the economy hundreds of millions of dollars every year,” she said.

Her bill would “spell out the core components of an agreement aimed to protect rail customers.”

Dinning urged the railways and shippers to use a proposed service agreement template and a commercial dispute resolution outlined in his report. The approach could be updated from experience.

He called on Transport Canada “to monitor the use of the service agreement template and commercial dispute resolution process.”

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