On 16 October 2014 the RGI hosted a Critical Conversation on the current state of railway-shipper relations in Canada, bringing together representatives from Canadian National (CN) and Canadian Pacific (CP) railways, shippers, transportation associations, former senior officials of the Government of Canada, and academics, to actively explore this complex and challenging topic.
The event was intended to be a start in considering alternatives to rising government regulation of railway-shipper relationships; and in developing alternative mechanisms of governance that could play out closer to the marketplace — with appropriate considerations for economics, efficiency, capacity, and competition.
Railway networks are a vital component of Canada’s trade-dependent economy. Many supply chains in Canada would not have grown to prominence without railways providing them with connectivity to global suppliers and markets. And with 21st Century globalization that dependence is rising.
The performance of railways affects virtually every player in the supply chains they serve, not just the railways’ direct customers. In recent years the federal government has taken a more active role than it used to in dealing with individual shippers’ complaints. Two new pieces of legislation to that effect were passed by Parliament in 2013 and 2014. But no matter how focused a piece of legislation is on a particular constituency, it always affects everyone in an interconnected system like this.
For Canada’s network of rail transportation and those who use it, one of the toughest nuts to crack is to ensure reliable and fair service to every player—small and large—without undermining the finite capacity of the system or the stable flow of traffic. The balance is delicate.
Because all shippers have a right to access the system by invoking the railways’ common carrier obligations, and because the system’s capacity is finite and can partially collapse from congestion if over-accessed, the background paper for this event described the situation as analogous to a “Tragedy of the Commons.”
With new business and global trade opportunities on the nation’s doorstep, and with regulatory solutions having reached what looks to be about the limit of their potential to sort things out, there seems to be a need for new approaches to avoiding and resolving conflict over the uses and performance of the network.
Critical Conversation Resources
Railways in Multiple Supply Chains (Ireland, 2014)
Railway Regulatory Freedoms: Rights and Obligations (Mulder, 2014)