WINNIPEG – Grain containers are bumping up against the railway revenue
cap, says a University of Manitoba transportation expert.
Barry Prentice, head of the university’s Transport Institute, says the
cap is a disincentive to shipping grain in containers rather than in
bulk.
“My recommendations would be take the revenue cap off containerized
grain completely,” he said. “Just apply it to volumes moving in bulk.”
Under the cap, which was introduced Aug. 1, 2000, the railways’ revenue
from hauling grain cannot exceed a certain dollar amount, which is
calculated each year by the Canadian Transportation Agency.
The cap includes revenue from both bulk and containerized shipments of
grain.
Because it’s cheaper for the rail companies to ship grain in bulk, they
have no incentive to use higher cost containers, since that would
simply mean less profit.
“If the railway has a choice between the low cost or higher cost to get
the same revenue out of containers and bulk, why would it ever ship
anything by container?”
