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Alberta Wheat Commission calls for Reciprocal Penalties in Transportation Reforms

The Alberta Wheat Commission (AWC) says measures to improve railway accountability are needed to restore confidence in Canada’s grain transportation system.
In its preliminary recommendations to the Canada Transportation Act (CTA) Review Panel, AWC calls for the mandatory inclusion of reciprocal penalties in Service Level Agreements to ensure rail companies meet their service obligations or face immediate financial consequences.
 
“AWC has made a conscious decision to focus our lobbying efforts on this issue because we believe it is fundamental to the success of the review process,” says AWC Chair Kent Erickson. “We believe that reciprocal penalties will reduce the need for regulatory interventions and will provide meaningful, long-term solutions to the issues that grain transportation has historically faced.”
 
Without mandatory reciprocal penalties, Erickson says there is no reason for a shipper to attempt to conclude a Service Level Agreement.
 
“Railway tariffs impose set penalties on shippers if they fail to meet their contractual obligations, for example loading and unloading of cars within a specified time,” he says.  “To ensure balance and equity in the supply chain, it is critical that penalties are also in place for railway non-performance.”
 
To be effective, AWC recommends that reciprocal penalties be accompanied by expanded powers for the Canadian Transportation Agency to ensure the agency has the ability to enforce adequate levels of service that meet the commercial needs of system users.  The current definition of “adequate and suitable accommodation” in the Act is vague.  AWC recommends the definition be amended to state that “a railway company shall fulfill its service obligations in a manner that meets the rail transportation needs of the shipper.”
 
AWC looks forward to its continued involvement in the CTA Review and to working with industry partners to ensure that the growing demand for quality Canadian products, as well as increased market access, is supported by a reliable and responsive rail transportation system. 
 
Sorce: Alberta Wheat Commission 

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