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The Times, They Are A Changin’ for Rail Transportation (PCN Winter 2015) DEC 22 2014 | Consumers and Producers | Pulse Crop News

This article appeared in the Winter 2015 issue of Pulse Crop News.

Greg Northey, Pulse Canada

The 2013-14 shipping season will stand out for many as a turning point for the agriculture industry. A bumper crop, a harsh winter and rail capacity that missed the mark on both accounts made Canada’s transportation system a top priority for every agriculture stakeholder in the country. The demand to do something about the grain backlog was so loud that the federal government responded with minimum volume requirements and a host of additional measures in Bill C-30 in an attempt to ‘get grain moving.’ It also expedited the Review of the Canada Transportation Act – launching it one year earlier than expected.

For many, it will seem that ‘we’ve been down this road before,’ and they would be correct.

In June 2000, the Minister of Transportation announced a comprehensive review of the operation of the Canada Transportation Act. The Review came at a significant time for the rail sector. Just five years earlier CN had been privatized and many of the regulations governing rail freight had been removed, creating a liberalized commercial environment for the railways. The June 2000 announcement gave the appointed panel one year to complete the review with the added expectation that they should suggest a resolution to the ‘thorny and long-standing issue of competitive rail access.’

To achieve this mandate, the panel adopted an expedited six-month timeline for consultations. Their interim report, released in January 2001, primarily addressed the issue of competitive rail access. At that time, there were serious concerns about the financial viability of the railways and the panel’s view was that legislators could not count on ‘large reservoirs of railway profits or great gains in operational efficiency to maintain an effective, competitive rail system.’

The final report included 21 recommendations to improve competitive rail access. Although they hoped to achieve a balance between ensuring financial viability of the railways and promoting competition in the system for the benefit of shippers, it was clear the overriding concern was providing the railways an environment where they could achieve sufficient revenues to maintain their systems.

Fast-forward 14 years and another comprehensive Review of the Canada Transportation Act has been launched. The 2014 review has strikingly similar timelines but is taking place in an almost completely different economic environment for the railways.

As things stand today, the railway companies are achieving significant financial success with optimized logistics systems that focus on generating revenues, cost control and asset utilization. This CTA Review does not need to focus on maintaining railway viability. Instead, the focus of this review must be on the competitiveness of Canadian businesses and the creation of a rail-based transportation system that provides the best possible service to rail customers while ensuring the optimal economic prosperity of all stakeholders in the supply chain.

The 2014 Review is providing the agriculture industry an opportunity to significantly reshape the rail transportation system to one that has the capacity and adaptability to avoid a grain backlog like what was experienced this past winter. The CTA Review advisors targeted the end of December for the completion of their initial consultation phase and have actively engaged the agricultural community in the previous two months.

Throughout 2015, it will be important for the agriculture industry to take stock of the various recommendations and priorities identified during the initial consultation and work together on promoting and communicating joint solutions to improve the rail transportation system. Pulse Canada continues to work to build partnerships and have formed the CTA Review coalition with many of the organizations in the Ag Transport Coalition.

The pulse industry is just one of many interested stakeholders in the agriculture industry, and the agriculture industry is just one of many interested stakeholders across Canada looking to influence a review that will assess rail, marine and air provisions within the Act. But with active involvement from pulse growers and the trade, a commitment to partnerships with counterparts in ag industry and a willingness to work with the broader shipping community, the Canadian pulse industry can and will continue to drive change.

Stay tuned, because the ‘times they are a changin’.’