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Martin Murray

Railroad Versus Shippers - Canadian Edition

By December 12, 2012

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Railroads versus Shippers The Canadian government seems to do what its American counterpart is unwilling to do, that is to get embroiled with the long-standing dispute between freight shippers and the Canada's largest railways. The Canadian Transport Minister announced the introduction of a new bill that would give companies that ship goods by rail the right to a service agreement with railways. In addition it will create an arbitration process to establish an agreement when commercial negotiations fail.

Naturally the railway companies, Canadian National Railway (CN) and Canadian Pacific (CP) see any legislation unnecessary indicating that there is no evidence of performance issues that would require any government interference. Shippers have reported that service from CN and CP has improved since the government started its Rail Freight Service Review back in 2008. However the government wants to ensure service improvements with legislation requiring railways to provide service contracts within 30 days of a shipper's request. If the terms cannot be agreed, the shipper can seek arbitration through the Canadian Transportation Agency. If a violation of the arbitration then occurs penalties could then be imposed up to $100,000.

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