Please pass this along to your Federal Mp add a note about what it costs your Farm if you will
thanks
just_wondering
April 10, 2008
For Release: Immediately
Balanced accountability key to addressing railway service issues
Winnipeg – The most fundamental issue that must be addressed in the Railway Service Review is to ensure a balance in accountability between a shipper and a railway, according to the Western Grain Elevator Association (WGEA). The WGEA notes the commencement of the railway service review announced by the Honourable Lawrence Cannon on Monday April 7, 2008, as a result of the rapidly deteriorating rail service being experienced by shippers.
“If you build a house on a poor foundation it won’t be long before that house falls down”, said Wade Sobkowich, Executive Director of the WGEA. “Likewise, the key to effective and long term solutions in the grain transportation system is by first ensuring a balance in accountability between a shipper and a railway and an obligation on a railway to provide adequate service.” Sobkowich added that country elevators are required to load unit trains within specified time periods to achieve incentives and terminal operators must unload cars within 24 hours or they pay demurrage. However, there is no corresponding accountability on the railway side for a failure to supply, spot, and deliver railcars within specified time periods.
In a normal commercial setting, competition will respond to opportunity to achieve this balance. With only one or two dominant carriers, the rail freight market does not function in a normal manner and in the absence of real competition the only option for the disadvantaged party is to try to artificially re-establish this balance through legislation or regulation. “In the past, concern about re-regulation as a solution has been expressed. Grain shippers are free enterprisers and would rather not see onerous regulation on commerce, but where rail competition is almost non-existent, a solution with a linkage to the legislation will have to stand in its place,” said Sobkowich.
Along this vein, some have expressed that investment in the rail transportation system may diminish without further de-regulation. Sobkowich said the positioning of this message is concerning since shippers are only asking for a re-balancing of the system to foster acceptable service levels; “If it is true that the railways will stop investing in the rail infrastructure in Canada if they have to provide adequate service to shippers, it speaks volumes about how shippers are being treated today and only punctuates the need for additional disciplines in the system in the first place.” The WGEA notes that regulation was put in place due to the fact that the railway monopolies were started and provided by the government many years ago, but that present laws to curb this monopoly power are not working.
The inability for shippers to plan movements is the single biggest issue in grain transportation. Service for grain shippers has deteriorated over recent months and years, which has prompted the need for a Railway Service Review in the first place. On average, shippers are seeing a weekly spotting performance of approximately 40% of car spotting plans, which have been rationed considerably relative to demand. The WGEA eagerly looks forward to participating in the review process.
The WGEA is an association of nine farmer-owned, public and private grain businesses operating in Canada, which collectively handle in excess of 90% of western Canada’s bulk grain exports. Costs for grain movements through WGEA members are approximately one billion dollars.
Contact: Wade Sobkowich
Executive Director
(204) 942-6835
thanks
just_wondering
April 10, 2008
For Release: Immediately
Balanced accountability key to addressing railway service issues
Winnipeg – The most fundamental issue that must be addressed in the Railway Service Review is to ensure a balance in accountability between a shipper and a railway, according to the Western Grain Elevator Association (WGEA). The WGEA notes the commencement of the railway service review announced by the Honourable Lawrence Cannon on Monday April 7, 2008, as a result of the rapidly deteriorating rail service being experienced by shippers.
“If you build a house on a poor foundation it won’t be long before that house falls down”, said Wade Sobkowich, Executive Director of the WGEA. “Likewise, the key to effective and long term solutions in the grain transportation system is by first ensuring a balance in accountability between a shipper and a railway and an obligation on a railway to provide adequate service.” Sobkowich added that country elevators are required to load unit trains within specified time periods to achieve incentives and terminal operators must unload cars within 24 hours or they pay demurrage. However, there is no corresponding accountability on the railway side for a failure to supply, spot, and deliver railcars within specified time periods.
In a normal commercial setting, competition will respond to opportunity to achieve this balance. With only one or two dominant carriers, the rail freight market does not function in a normal manner and in the absence of real competition the only option for the disadvantaged party is to try to artificially re-establish this balance through legislation or regulation. “In the past, concern about re-regulation as a solution has been expressed. Grain shippers are free enterprisers and would rather not see onerous regulation on commerce, but where rail competition is almost non-existent, a solution with a linkage to the legislation will have to stand in its place,” said Sobkowich.
Along this vein, some have expressed that investment in the rail transportation system may diminish without further de-regulation. Sobkowich said the positioning of this message is concerning since shippers are only asking for a re-balancing of the system to foster acceptable service levels; “If it is true that the railways will stop investing in the rail infrastructure in Canada if they have to provide adequate service to shippers, it speaks volumes about how shippers are being treated today and only punctuates the need for additional disciplines in the system in the first place.” The WGEA notes that regulation was put in place due to the fact that the railway monopolies were started and provided by the government many years ago, but that present laws to curb this monopoly power are not working.
The inability for shippers to plan movements is the single biggest issue in grain transportation. Service for grain shippers has deteriorated over recent months and years, which has prompted the need for a Railway Service Review in the first place. On average, shippers are seeing a weekly spotting performance of approximately 40% of car spotting plans, which have been rationed considerably relative to demand. The WGEA eagerly looks forward to participating in the review process.
The WGEA is an association of nine farmer-owned, public and private grain businesses operating in Canada, which collectively handle in excess of 90% of western Canada’s bulk grain exports. Costs for grain movements through WGEA members are approximately one billion dollars.
Contact: Wade Sobkowich
Executive Director
(204) 942-6835
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