Canadian railroads criticize grain transport reform

by Emily Wilson
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A grain transportation reform package recently unveiled by Canada's federal government was met with criticism from that country's two railroads. Key elements in the legislative program include an 18% reduction in grain freight rates from 2000-2001 levels and expanded logistics tendering authority for Canadian Wheat Board shipments to export points.

"This unbalanced approach will have serious consequences for Canadian National's existing rate and service packages offered to grain shippers," said Paul Tellier, president and c.e.o. of Canada's largest railroad. Noting that the company had invested more than C$214 million in grain-related capital projects since 1995, Mr. Tellier said C.N. "will have to carefully analyze all grain-related expenditures in light of the reduced revenues from this sector."

However, Canadian Transport Minister David Collenette said the reform would result "in a stronger grain handling and transportation system in Canada, one that is more commercial, competitive and accountable. It will also strengthen Canada's ability to reliably deliver grain to international markets."

The reforms, which are scheduled to be implemented by Aug. 1, call for C.W.B. tendering for logistical services for grain shipments through the ports of Vancouver, Prince Rupert, Thunder Bay and Churchill, for at least 25% of the ports' volume in 2000-01, and reaching a minimum of 50% in 2002-03.