Extra teeth demanded for rail service bill

What they describe as the worst rail service in three years has prompted shippers to propose amendments to toughen the federal government’s proposed Fair Rail Freight Service Act.

A coalition of shippers laid out proposals Friday for new amendments to the Act, now proposed in federal Bill C-52, in a bid to help balance their relationship with the railways, according to Wade Sobkowich, executive director of the Western Grain Elevator Association (WGEA).

“Service is very poor on both railroads,” he said in an interview March 22. “Overall the railways are delivering less than 50 per cent of the rail cars in accordance with their own service plans.”

C-52, first tabled in mid-December 2012, is supposed to compel the railways to reach service level agreements with shippers, making it easier to resolve rail service complaints.

But to do that, the Coalition of Rail Shippers (CRS) — which includes the WGEA, other crop commodity groups, as well as mining, feed, fertilizer, forestry and automotive companies — wants six amendments to the bill, which is now before the House of Commons transport committee:

  • Better define “adequate and suitable accommodation” and “service obligations.”
  • Allow the arbitrator to rule on a wider range of items in a Service Level Agreement (SLA).
  • Allow the arbitrator to include a mechanism for resolving disputes within an SLA.
  • Allow single shipper tariffs to be eligible for Final Offer Arbitration.
  • Allow the shipper to identify the matter in dispute before the arbitrator.
  • Remove the ability for the railways to use “the network” as an excuse for poor service.

Coming out of the committee’s most recent meeting on C-52 on Tuesday, Regina-area Liberal MP Ralph Goodale took to Twitter to criticize the Conservative government as “indifferent to shippers’ needs for new law creating market power balance with the railways.”

In the meeting, he tweeted, shippers were asking why the railways can force shippers to pay demurrage, “but (the) shippers have no reciprocal power.”

There are many examples of poor railway service, Sobkowich said Tuesday. In one recent case a railway failed to deliver a train to an elevator one week, then delivered the next week’s train to the elevator and soon after delivered the late train. When the elevator couldn’t load all the cars on time, the railway penalized the elevator, he said.

In another case a railway failed to pick up a loaded train, delaying its delivery to Vancouver, delaying exports.

“We had a vessel waiting three weeks for grain and incurring demurrage charges,” Sobkowich said. “The bottom line is the railways can charge the shipper even if it’s not the fault of the shipper and we still have no way to get compensation for our damages.”

Ship demurrage right now is only $7,000 a day, he added, but noted it’s normally around $30,000 and has been as much as $120,000 a day.

Rail service started to decline in January, Sobkowich said. “It’s at the point now where it’s extremely bad.”

“The problem is that shippers currently have no ability to negotiate acceptable terms and hold the railways accountable to those terms,” CRS chairman Bob Ballantyne said Friday.

Without the proposed changes, he said, “shippers will continue to find themselves without any material ability to obtain adequate levels of service.”

Canadian National Railway (CN), for one, currently blames bad weather.

“Traffic patterns have been disrupted due to recent and ongoing extreme winter conditions across the Canadian Prairies,” CN said in an unrelated service update released Friday.

“Trains running along our main line between Edmonton and Winnipeg have experienced delays as a result of particularly heavy snowfalls and strong wind conditions in Alberta and Saskatchewan.”

CN said Friday it had detoured some of the affected traffic over its Prairie North line and has “deployed extra resources wherever possible” to fix the problems.

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man. A version of this article appears in the March 28, 2013 issue. Online version includes files from AGCanada.com Network staff.

Related story:
Grain farmers hail rail freight service enforcement, Dec. 11, 2012

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