CN fears drift to reregulation

CN late Friday issued a statement expressing “serious concerns” about the final report of the Rail Freight Service Review (RFSR) panel released earlier in the day.

Claude Mongeau, president and chief executive officer, said: “We are concerned that the panel’s recommendations are drifting backward toward more regulation instead of encouraging the current momentum for positive change.”

Mongeau (pictured at left) said the panel failed to act “on the hard facts … which show that rail service in Canada is actually quite good overall.” He said the panel failed to recognize change taking place over the past two years, including improved customer engagement, initiatives to improve thefirst-mile/last-mile of rail traffic movements, and enhanced supply chainefficiency and transparency.

The CEO also said 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 claim.

Mongeau added, “CN is pleased that the government on its part recognizes the positive momentum in the railway industry, is anchoring its preference on commercial solutions, and is focusing on the end-to-end supply chain. Thisis the only way in our view to achieve lasting service improvements. We are, however, disappointed that the government considers legislation may still be needed. The Canada Transportation Act (CTA) 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.”