Big day for shippers

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GOVERNMENT OF CANADA ACTS TO IMPROVE RAIL FREIGHT SUPPLY CHAIN

WINNIPEG — At an event held in Winnipeg today, the Honourable Rob Merrifield, Minister of State (Transport), and the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food, met with stakeholders from across the rail-based freight supply chain to announce the Government of Canada’s response to the Rail Freight Service Review. The review was launched in 2008 to address ongoing issues with rail freight service, raised by users of the rail supply chain.

“Our government is focused on the economy. By launching the Rail Freight Service Review, our government made a commitment to help ensure Canada has the rail system it needs to support a strong economy, and our domestic and international trade,” said Minister Merrifield. “Today we are following through on that promise with measures to enhance the effectiveness, efficiency and reliability of the entire rail freight supply chain.”

The review was conducted in two phases. The first phase comprised analytical work to achieve a better understanding of the nature and extent of problems and best practices within the supply chain, including those experienced by shippers, terminal operators, ports and vessel operators, with a focus on railway performance. An independent panel, chaired by Walter Paszkowski, led the second phase, which included extensive consultations with stakeholders across the supply chain. The panel’s final report was also made public today.

The government accepts the panel’s commercial approach and intends to implement the following steps to improve the performance of the entire rail supply chain:
• initiate a six-month facilitation process with shippers, railways and other stakeholders to negotiate a template service agreement and streamlined commercial dispute resolution process;
• Table a bill to give shippers the right to a service agreement to support the commercial measures;
• establish a Commodity Supply Chain Table, involving supply chain partners that ship commodities by rail, to address logistical concerns and develop performance metrics to improve competitiveness;
• in collaboration with Agriculture and Agri-Food Canada, Transport Canada will lead an
in-depth analysis of the grain supply chain to focus on issues that affect that sector and help identify potential solutions.

“Railways, farmers and all shippers depend on one another for their survival and profitability, and we’re making sure they have the tools they need to capture efficiencies and strengthen that partnership,” said Minister Ritz. “Today’s announcement is further evidence of our government’s consistent commitment to put farmers first and make sure the agriculture industry remains strong.”

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“The Rail Freight Service Review has been a very important undertaking for Canada’s rail system, involving close consultation with key stakeholders,” said Minister Merrifield. “I would like to thank the panel for its diligent and thorough work. At the same time, I urge every stakeholder in the supply chain — including the railways and shippers — to work cooperatively to implement the commercial approach.”
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Contacts: Robert Lynch
Office of the Minister of State (Transport)
Ottawa
613-991-0700 Media Relations
Transport Canada, Ottawa
613-993-0055

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Backgrounder

GOVERNMENT OF CANADA RESPONSE TO THE RAIL FREIGHT SERVICE REVIEW

The Rail Freight Service Review

The Rail Freight Service Review (the review) was launched in 2008 to address ongoing issues with rail freight service and fulfil a government commitment as part of the 2008 process that amended the Canada Transportation Act. The amendments focused on shipper protection provisions related to rates and charges.

The review was conducted in two phases: analytical work to achieve a better understanding of the nature and extent of problems within the logistics chain (including shippers, terminal operators, ports and vessel operators), followed by consultations with stakeholders on issues and recommended solutions. This second phase was led by an independent panel of three eminent persons. Mr. Walter Paszkowski, who was appointed chair, has an extensive public policy background. Mr. David Edison has extensive railway experience and Mr. William (Bill) LeGrow has extensive experience as a rail shipper.

The panel consulted with 85 different stakeholders and received 141 written submissions from across the rail-based logistics chain. On October 8, 2010, the review panel released its interim report to the public. Then, after considering feedback from stakeholders, the panel submitted its final report to the Minister of State (Transport) on December 22, 2010.


Government of Canada Response

The government accepts the panel’s commercial approach and its four key elements:
• Railways should provide 10 days’ advance notice of service changes.
• Railways and stakeholders should negotiate service agreements.
• A fair, timely and cost-effective commercial dispute resolution mechanism should be developed.
• Supply chain performance should be monitored through enhanced bilateral performance reporting between shippers and railways, and through public performance reporting.

While accepting the recommendation to initiate a six-month facilitation process, the government will go further than the panel outlined in its report. The facilitation process will not only focus on developing a streamlined commercial dispute resolution process but also develop a template service agreement, in consultation with shippers, railways and other stakeholders.



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To support these commercial measures, the government will go further than the panel recommended and intends to proceed with tabling a bill giving shippers the right to a service agreement with the railways and provide a process to establish an agreement, should commercial negotiations fail. While it is always preferable to achieve commercially negotiated agreements, when this is not possible, the proposed bill would provide a recourse to establish such a service agreement between a shipper and a railway.

In addition to supporting the panel’s recommendations, the government’s response goes further by taking a broader supply chain perspective. First, Transport Canada will establish a Commodity Supply Chain Table to provide a forum for exporters to address issues that affect the freight logistics system and develop supply chain performance metrics that would be publicly available. Second, in collaboration with Agriculture and Agri-Food Canada, Transport Canada will lead an in-depth analysis of the grain supply chain to focus on issues that affect that sector and help identify potential solutions.

The government’s response also goes further by taking a broader supply chain perspective.
• First, Transport Canada will establish a Commodity Supply Chain Table to provide a forum for exporters to address issues that affect the freight logistics system and develop supply chain performance metrics that would be publicly available.

• Second, in collaboration with Agriculture and Agri-Food Canada, Transport Canada will lead an in-depth analysis of the grain supply chain to focus on issues that affect the sector and help identify potential solutions.

The government’s response combines a commercial approach, supported by a proposed bill to give shippers the right to a service agreement and takes a broader supply chain perspective to continue addressing logistical issues and develop public performance metrics. That is the best way to achieve timely, flexible and customized solutions, improve relationships and enhance the effectiveness, efficiency and reliability of the entire rail freight supply chain.

Further information can be found on the Rail Freight Service Review website.

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Wheat growers press release to follow.

This is a BIG DEAL for all shippers. and helps show the value of farmers pulling in one direction.

If any of you have seen the work of Greg Cherewyk (Pulse Canada) or Richard Phillips (Grain Growers of Canada) thank them, and all other members of the shippers coalition.

One thought is with the better than average odds of an upcoming election.
What happens?
Either way I would encourage you all to contact your list of MP's and thank them for this. Encourage the CPC to get on this and ask the Libs to help out in any way they can. This issue crosses political lines. With the exception of the BQ. This will hurt the way the railways do business, and HQ is in Montreal.

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Media Release
March 18, 2011

Wheat Growers Applaud Government Response
to Rail Service Review


The Western Canadian Wheat Growers Association is pleased with the action the federal government intends to take to improve rail service in the hauling of grain and other commodities.

The federal government announced today it will be adopting several recommendations of the Rail Freight Service Review panel and is implementing further measures to improve rail service. The further measures include the tabling of legislation requiring the railways to enter into service agreements with shippers, the establishment of supply chain performance metrics and a separate analysis of the grain supply chain.

“These measures should lead to improved railway performance and accountability,” says Kevin Bender, President of the Wheat Growers. “We are especially pleased the government intends to move forward with improvements in legislation now rather than take the wait-and-see approach that the panel initially recommended.”

Among the panel’s recommendations to be adopted are improved notice provisions of service changes; negotiated service agreements; a commercial dispute resolution mechanism; and improved monitoring and reporting. In its submission to the panel’s interim report in November, the Wheat Growers supported these measures and also called on the panel to recommend a separate review of grain transportation issues.

“The service agreements are important in establishing performance standards for the railways and shippers, and for spelling out the consequences of non-performance,” says Bender. “The Wheat Growers see these as key to improving service over the long-term.”

The Wheat Growers will also be looking forward to the analysis of the grain supply chain. In our latest submission to the review panel, the Wheat Growers called for such a review to consider the revenue cap, the establishment of a two-tier revenue cap, the introduction of discontinuance provisions relating to producer car sidings, and a review of the Canadian Wheat Board’s role in the grain transportation system.

“We appreciate the government’s commitment to undertake a separate review of the grain supply chain,” says Bender. “That process, together with the initiatives announced today should significantly improve our industry’s ability to meet the needs of our customers on a more timely and reliable basis.”

For further comment, please contact:

Kevin Bender
President
(403) 350-4949

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CN critical of Rail Freight Service Review final report - encourages stakeholders to embrace a commercial approach

MONTREAL, March 18 /CNW Telbec/ - CN (TSX: CNR) (NYSE: CNI) today expressed its serious concerns about the final report of the Rail Freight Service Review (RFSR) panel that was issued today and its disappointment with the Government's response.

While CN is pleased that, in releasing the report, the Government recognized the importance of a supply chain approach and noted its preference for commercial solutions, CN is concerned that the Government's decision to consider tabling legislation could stifle supply chain innovation and Canada's competitiveness in the global marketplace.

Claude Mongeau, president and chief executive officer, said: "CN disagrees with the focus and tenor of the panel's recommendations. Like the dissenting panel member, we are concerned that the panel's recommendations are drifting backward toward more regulation instead of encouraging the current momentum for positive change.

Mongeau noted that the panel failed to act on the hard facts that were before it, which show that rail service in Canada is actually quite good overall.

More importantly, the panel failed to recognize the significant positive change that has been taking place over the past two years to address key service issues, including improved customer engagement, initiatives to improve the first-mile/last-mile of rail traffic movements, and enhanced supply chain efficiency and transparency.

Contrary to its mandate from the government to examine service provided by the "rail-based logistics chain," the panel focused solely on the railways - the only federally regulated segment of the supply chain - and missed the fact that all participants in the supply chain are accountable for transportation system performance, not just railways.

At the same time, the panel arbitrarily exceeded the scope of its mandate by opining on railway competition. The panel asserted that the railways' "market power" is a cause of service problems, while ignoring the clear evidence to the contrary and providing no support for its unsubstantiated claim.

Mongeau added, "CN is pleased that the Government on its part recognizes the positive momentum in the railway industry, is anchoring its preference on commercial solutions, and is focusing on the end-to-end supply chain. This is the only way in our view to achieve lasting service improvements. We are, however, disappointed that the Government considers legislation may still be needed. The Canada Transportation Act (CTA) already provides extensive safeguards to protect shippers' interests, and we believe a regulatory approach runs the risk of stifling innovation and thwarting the progress that has been achieved in the last two years."

Within a commercial framework, CN will continue to be an active participant to promote improved service to customers and greater supply chain collaboration. CN looks forward to working with all stakeholders on the Government's commercially-focused initiatives, such as the development of a sound commercial dispute resolution process and the sharing of relevant data across all supply chain participants.

Mongeau said, "CN remains fully committed to its strategic agenda of operational and service excellence. Deeper customer engagement is the right way to do business and the best way to help our customers across Canada win in their own end markets.

"In the end, supply chain partners need to embrace change to drive better service and efficiency gains. Burdensome regulation targeting railways alone is not the solution. Greater supply chain collaboration and more service innovation are what is needed to foster Canada's prosperity."

CN - Canadian National Railway Company and its operating railway subsidiaries - spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, and Jackson, Miss., with connections to all points in North America. For more information on CN, visit the Company's website at www.cn.ca.

[Burbert]

tommie4cwb coulda done all this wit a
phone call, to his buds at the RR's.
Nothing here that tommie doesn't do each
and every day, after all he has a home PC
and kin market the world everday.... Nope
no credit fer the cwb, after all ain't
they still gagging?

[parsley]

Every time this board purp crawls out of his Mac, it costs money.

[wd9]

That'll be the day, railroads actually doing what they agree to. Sorry, but never gonna happen. As we speak, 57 lawyers and 143 professional lobbyists are pulling with the strength of a locomotive the other direction determining in their own minds what the wording actually says.

[bucket]

The government's response:

"To support these commercial measures, the government will go further than the panel recommended and intends to proceed with tabling a bill giving shippers the right to a service agreement with the railways and provide a process to establish an agreement, should commercial negotiations fail. While it is always preferable to achieve commercially negotiated agreements, when this is not possible, the proposed bill would provide a recourse to establish such a service agreement between a shipper and a railway. "

The election will stop any government actions in their tracks.

Once again the government will DO NOTHING but come asking farmers for their support and cash for the election.

[ajl]

I just don't see how bureaucrats and
lawyers are going to do anything for grain
movement. Things that would help include
better weather with fewer mountain
avalanches, labour legislation that would
reduce union power in this industry so
there is more flexibility, and a return to
global recession so that CP is less
distracted by hauling other stuff. Any
chance of any of these things happening?

[bucket]

How about running rights if they don't want to move grain.

The railroads were built on taxpayers dollars. The profit they are guaranteed every year should have had the lines between thunder bay and banff twinned by now. Just to speed up traffic.

It is really idiotic to see a train stopped on the mainline of the prairies waiting for another train to go by and then listen to cp or cn say how efficient they are.