U.S. operators will be delighted Ottawa is hamstringing Canadian railways with new rules on moving freight at below\u002Dmarket rates. Read on.
The omnibus bill to implement the 2023 federal budget contains measures that will increase costs for railway shippers and ultimately all consumers. The extension of the regulated “interswitching” distance hides, under innocuous bureaucratese, enormous costs that will have to be shouldered by all rail shippers.
To be completely clear: the federal government is forcing the railways to offer shippers a below-market rate set by the government for the transfer of train cars to the railway network of a competitor. That government-set price likely won’t allow railway companies to break even. In the end, these costs are passed on to consumers and eventually paid for in large part by you and me at the checkout counter.
Encouraging the switching of cars from one railway to another undermines the fluidity of our logistics chains and can lead to delays. In fact, the hit to productivity of complicating our supply chains is largely what led to the elimination of the 2014-17 policy. Considering the supply chain problems we’ve faced since then, building back an extra layer of complexity seems reckless.Article content
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