Rail duopoly needs watchdog: shippers

Canada's two largest railways need to be monitored by a federal watchdog to keep their duopoly powers in check, says a former rail executive who is leading the charge for disgruntled shippers, the Toronto Globe and Mail reports.

Bob Ballantyne, chairman
of the Coalition of Rail Shippers, said that Canadian National Railway Co. and
Canadian Pacific Railway Ltd. can’t be trusted to measure their own operating
performance. Instead, the coalition is proposing that Ottawa appoint an
independent agency to regularly provide arm’s-length scorecards of the
country’s rail service.

A former vice-president at
a CP consulting affiliate, Ballantyne served as president of the Railway
Association of Canada from 1988 until 2000, when he retired at age 65 as head
of the lobby group. In 2003, he came out of retirement to become president of
the Canadian Industrial Transportation Association, one of 18 organizations
that belong to the coalition now pushing for tough new regulations over
Canada’s rail industry. Coalition members represent a range of interests, from
agriculture and mining to forest products and chemicals.

"I don’t have a
problem with my conscience in doing this. In some cases, there are people who
joke, ‘Bob, you’ve gone over to the dark side.’ But an opportunity came up. I
understand both sides, from a rail and from a shipper perspective," Ballantyne
said in an interview.

Ballantyne, 75, made the
comments after he and three other advocates for rail shippers held a news
conference in Ottawa to voice their complaints about what they call spotty
service by Montreal-based CN and Calgary-based CP. The coalition worries that
Ottawa’s Rail Freight Service Review Panel will issue a final report at the end
of this year that will gather dust, especially because an interim report by the
panel recommended that any new regulations be derailed – at least until CN and
CP be given until 2013 to voluntarily step up their game and become more
focused on customer grumblings.

"I had a long and
happy relationship with CP, so I’m not anti-railroad, and most shippers aren’t,
either," Ballantyne said. "The railways want to be profitable. The
shippers just want some balance in how that is achieved. We don’t want
heavy-handed regulation."

CN spokesman Mark Hallman
countered that the coalition is off-base in lobbying for intrusive rail
regulation. The review panel’s research found that a robust rail regulatory
framework is already in place in Canada, as well as "world-class speed of
rail delivery" and "solid Canadian railway transit times and order
fulfillment performance," Hallman said in a statement.

"The panel did not
undertake any research on the issue of competition in the rail-based logistics
chain. So CN cannot understand why the panel could reach a conclusion that CN
and CP possess market power," Hallman said.

CP spokesman Mike
LoVecchio said the freight carrier has already negotiated service agreements
with key customers, ports and terminals.

"We offer a
commercial dispute resolution process to all customers that is confidential and
cost effective using Canadian Transportation Agency mediators," he said,
stressing that CP backs "commercial principles coupled with a stable regulatory
regime."

CP also disagrees with the
panel’s recommendation that extra regulation may be required in 2013.