‘Burdensome regulation’ not the answer to rail concerns, CN boss says

MONTREAL – The president and CEO of CN Rail says the rail industry in Canada does not need more regulation to solve rail service issues.

Claude Mongeau expressed “serious concerns” about the final report issued today by the Rail Freight Service Review panel.

He said he was also disappointed by the government’s decision to consider tabling legislation over the matter, saying it could stifle supply chain innovation and Canada’s competitiveness in the global marketplace.

“The Canada Transportation Act already provides extensive safeguards to protect shippers’ interests, and we believe a regulatory approach runs the risk of stifling innovation and thwarting the progress that has been achieved in the last two years," he said.

"In the end, supply chain partners need to embrace change to drive better service and efficiency gains. Burdensome regulation targeting railways alone is not the solution. Greater supply chain collaboration and more service innovation are what is needed to foster Canada’s prosperity."

Mongeau added that within a commercial framework, CN will continue to be an active participant to promote improved service to customers and greater supply chain collaboration.

"CN disagrees with the focus and tenor of the panel’s recommendations,” he said. “Like the dissenting panel member, we are concerned that the panel’s recommendations are drifting backward toward more regulation instead of encouraging the current momentum for positive change.”

He noted that the panel failed to act on the hard facts that were before it, which show that rail service in Canada is actually quite good overall.

More importantly, Mongeau said, the panel failed to recognize the significant positive change that has been taking place over the past two years to address key service issues, including improved customer engagement, initiatives to improve the first-mile/last-mile of rail traffic movements, and enhanced supply chain efficiency and transparency.

A press release from CN Rail says that contrary to its mandate from the government to examine service provided by the entire rail-based logistics chain, the panel focused solely on the railways – the only federally regulated segment of the supply chain – and missed the fact that all participants in the supply chain are accountable for transportation system performance, not just railways.

“At the same time, the panel arbitrarily exceeded the scope of its mandate by opining on railway competition. The panel asserted that the railways’ "market power" is a cause of service problems, while ignoring the clear evidence to the contrary and providing no support for its unsubstantiated claim.

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