VANCOUVER – Canada’s rail freight service review is off to a slow start, according to a partner in the firm that is leading the process.
QGI Consulting was given the contract in August to conduct most of the first phase of the review. Already, the Edmonton firm knows it won’t meet the March 31, 2009, deadline for filing its final report to Transport Canada.
Mark Hemmes, partner in the Quorum Group of Companies, which owns QGI, said they have received better-than-expected co-operation from the railways, but Canadian National Railway and Canadian Pacific Railway have been late in sending required data.
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The delay means the report won’t be delivered until May or June.
But Hemmes said it is better to be thorough than timely.
“If you’re going to do it, do it right,” he said.
“This is not a simple series of issues. This is really complicated stuff and it really deserves a good looking at if you’re going to do it right.”
Hemmes told delegates attending the Canada Grains Council’s semi-annual meeting that contrary to popular belief, there has been a steady improvement in rail service in the nine years that his other firm, Quorum Corp., has been montoring Canada’s grain transportation system on behalf of the federal government.
The time that grain spends in the system has decreased in part due to elevator consolidation and in part due to better service from the railways, which have reduced the average car cycle to 16.4 days from 20 or 21 days.
“So if everything is getting better, why is it that everybody is ticked off and demanding a rail service review?” said Hemmes.
The answer lies in consistency of service.
For instance, the standard deviation on a 17.4 day car cycle can be 9.3 days, which shippers find unacceptable.
“It basically negates some of our statistics on the car cycle. When you have that large amount of inconsistency in deliveries, how can you really say that it’s a representative number?”
The standard deviation is 48 to 60 percent of the average car cycle time.
“That’s just hard to fathom,” said Hemmes.
QGI is charged with analyzing car order and supply, transit times and other key measures. The railways will supply most of the data but shippers and port terminals will also be contacted.
In the second step of phase one of the review, QGI is expected to compile a book about how rail transportation works, an analysis of operating practices that identifies what parts of the system are working and what is broken. Here, the consultant will try to identify inconsistencies in service relating to shipping times or commodity type or specific corridors.
“Then we’re going to drill down into those areas and look for potential systemic issues,” said Hemmes.
During phase two of the review, the report prepared by QGI will be combined with a survey of shippers conducted by an as yet unnamed consulting firm and delivered to a panel that will review the data and make recommendations to government on how the system can be fixed.
That is where the metal hits the rails.
“I’m not kidding or trying to be glib when I say that when we’re done, the process begins,” said Hemmes.
He was not willing to predict when grain shippers will see changes as a result of the review, other than to say it will be well over a year away. But when they come, they will be significant.
“What I’m really hoping for out of this is that the industry really gets a better understanding of itself and can look at itself in the mirror and say, ‘now I understand.’ “
John Doran, policy adviser with Transport Canada, phrased it a different way.
“It’s probably going to be a milestone in the transportation history of this country,” he told delegates.
