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Railways Getting Off Track

Boy, have the times changed. I remember when I started writing about transportation 20 years ago truckers used to have a field day every time a report came out detailing the shortcomings of the railwa...




Boy, have the times changed. I remember when I started writing about transportation 20 years ago truckers used to have a field day every time a report came out detailing the shortcomings of the railways. Never was an opportunity missed to lob a few verbal grenades at the old RAC (the Railway Association of Canada).

Were we back to 20 years ago, the trucking industry would certainly have had a ball with the latest such report reflecting the levels of satisfaction of 262 shippers with the rail freight service they receive from Canada’s Class 1 railways. The report, authored by NRG Research Group, is part of Transport Canada’s Rail Freight Service Review and it paints a worrisome picture.

But truck and rail make not quite so strange bedfellows these days, and have been warming up to each other for some time. Whether it’s Fastfrate’s 10-year partnership with CP Rail, Schneider pairing with CSX or JB Hunt’s deal with Norfolk Southern, fact is there are many motor carriers who view intermodal as a more efficient way to move freight beyond distances of 750 miles. Trucking still competes with rail but now requires a strong rail network to ensure a smoothly functioning Canadian transportation network.

So a report that shows such a low shipper satisfaction with rail service is both an opportunity and a concern. Shippers were asked to rate their satisfaction using a scale of one to seven (with seven representing very satisfied). Consider the major findings: only 17% of shippers rated their satisfaction level a six or seven whereas typical customer satisfaction research generates satisfaction ratings in the 50-70% range; even worse, only 14% of shippers who had access to only one rail line were very satisfied; and just 11% of “captive” shippers, with access to only one rail line and limited or no other shipping options, were very satisfied.

More than a third (35%) of shippers gave dissatisfaction scores of three or lower; 45% say their satisfaction level had decreased over the past three years; particularly worrisome is that 62% said they have suffered a serious financial impact as a result of poor rail freight service.

Most shipper dissatisfaction was linked to problems with on-time de-livery of cars at origin and destination; timely pick-up of empty cars after unloading; reliability of car supply, including timely release of cars into the system; consistent transit times; and responsiveness of railways to problems. In other words, all the important stuff, except for price.

Such issues present potential service concerns for motor carriers partnering with railways on intermodal moves. When something goes wrong with an intermodal shipment, shippers don’t care which mode was to blame. The carrier that booked the business is held responsible. Seems to me that Canada’s railways have some issues to address and intermodal relationships can’t continue to flourish until they do so.

-Lou Smyrlis can be reached by phone at (416) 510-6881 or by e-mail at lou@TransportationMedia.ca.

You can also follow him on Twitter at Twitter.com/LouSmyrlis.


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