The battle has been joined over joint running rights.
Ferroequus Railway Co. wants to run grain trains over Canadian National
Railway’s main line from the Prairies to the export terminal at Prince
Rupert, B.C.
In an application seeking approval from the Canadian Transportation
Agency, the railway says its plan would create competition, which would
result in increased efficiency, improved service, lower freight rates
and better use of the northern port.
But that has triggered a strong response from CN, which says the plan
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would be disastrous for the Canadian rail industry.
The national railway says granting the Ferroequus application would
trigger an “open access environment.”
And that, it said in a 34-page brief submitted to the agency, would be
bad news for all concerned.
It said other carriers, including United States-based railways,
inevitably would apply for running rights to cover the entire Canadian
rail network.
“This would enable guest railways to cherry pick the most profitable
traffic, leaving CN to support the burden of financial investment in
rail infrastructure without the benefit of that revenue source,” said
the brief.
CN spokesperson Jim Feeny said in an interview that would hurt not only
the rail companies but also the businesses and industries that depend
on them.
“We are saying the system works very well and if you introduce concepts
like open access, it’s going to work against the interests of not just
the railways but the shippers as well,” he said. “It would starve the
system’s ability to invest in itself.”
In its application, Ferroequus says its plan would clearly be in the
public interest, especially for grain shippers.
“(Ferroequus) wishes to provide to the shipper a previously unavailable
competitive alternative to move Canadian Wheat Board grain from
Canadian Pacific Railway lines to Prince Rupert,” it said.
Ferroequus says it will provide a locally focused and more flexible and
timely service, which will benefit shippers and farmers.
“Timeliness in grain service is in the best interest of the producer,
because the producer is not paid for the grain until that product is
delivered into the system,” it said.
Besides the benefits to farmers and shippers and the efficiency of the
rail system, Ferroequus said its proposal will also result in increased
economic activity along the rail lines in question, and lead to better
use of Prince Rupert, which will reduce congestion at the port of
Vancouver.
In its response, CN rejected virtually all the points made by
Ferroequus and said the company failed to show there is any need for
new rail service to Prince Rupert.
“There is no evidence that we’re failing to meet our level of service
obligations,” said Feeny. “In fact our service is exemplary right now.”
This is the second time Ferroequus has asked for permission to run
trains over CN lines.
In May, the railway, along with Omnitrax Canada, sought permission to
pick up grain and other freight from customers along certain CN lines
and haul it to export positions, what are known as solicitation rights.
The agency dismissed the application, saying that running rights allow
a railway only to traverse the track of another railway from one point
to another without stopping to pick up freight.
In its latest application, Ferroequus says it just wants transit rights.
In its response, CN asked the transport agency to dismiss the
application on the grounds that Ferroequus is in fact asking for
solicitation rights again.
It said the access tracks to the Prince Rupert Grain Ltd. terminal are
private tracks linking CN to its customer.
“Therefore the PRGT is a CN customer being solicited by (Ferroequus).”
