Court Decision Brings More Fairness to Rail Shippers

RETA has blogged earlier on impending federal legislation to improve rail freight service in Canada. Up to this point, Canadian National Railway and Canadian Pacific Railway have essentially enjoyed a monopoly in moving freight by rail and have been able to call the shots, often resulting in poor service according to its customers. The legislation will hopefully help level the playing field somewhat by creating more opportunities for rail shippers to get fair service agreements from CN and CP. The Rail Freight Service Review Panel believes improving shippers’ leverage with the railways is the best way to achieve results that more closely resemble those that would be expected from competitive markets.

Rail shippers got some more good news recently with a Federal Court of Appeal decision that allows businesses that move freight by rail to appeal penalties and ancillary charges imposed by rail companies, even when those charges are written into confidential contracts (MM&D). The judgment stems from a dispute between Peace River Coal Inc. and Canadian National Railway over an additional fuel surcharge tariff imposed by CN that Peace River Coal was unsuccessful in contesting. The Federal Court of Appeal decision  means that the Canadian Transportation Agency must now hear complaints by shippers about what they view as unfair penalties and ancillary charges imposed by the rail industry.

The Canadian Industrial Transportation Association (shippers) is pleased with the decision and looks forward to improved commercial negotiations between the railways and their customers (CITA).

~ by railroaded on November 8, 2012.