Tough to get CN to Restore Twice-Daily Trains Date: August 5, 2008 By ROGER TAYLOR Business Reporter Sat.

Jul 26 - 5:46 AM A FEW weeks ago a CN Rail representative came to Halifax to speak to a Halifax Chamber of Commerce audience about business in the Port of Halifax. I don’t know what else James Foote said, because the revelation that CN had experienced a 15 per cent drop in the volume of cargo it hauls in and out of Halifax came as a shock and disappointment. His comments raised the warning flag locally about what has been happening at the port, even though he wasn’t explicit about what the railway was going to do as a result of the decline in business. Foote, CN’s executive vice-president of sales and marketing, didn’t announce changes to the Halifax rail service while he was in town, but it didn’t take long for the full impact of what he was talking about to became evident to everyone. Next, the port authority released figures that showed container traffic was down 16.3 per cent. Then, CN, which is the monopoly railway in Halifax, announced it was cutting one of two daily trains that have been serving Halifax. Now, instead of bringing in a train from Montreal and another from Toronto, the only daily connection is to Toronto. While it could be argued that a single, longer train serving the Port of Halifax could be more efficient and therefore beneficial to shippers using the service, there is a price to pay for not having a more flexible rail option. This has all spurred various efforts locally to try and figure out a way of restoring the two-train-a-day service. CN has been officially asked by the province to reconsider its move to drop the second train, but CN isn’t interested in reversing its decision, at least not yet. Nevertheless, the provincial government has indicated that it believes the CN service to the Port of Halifax has dropped below a minimum standard of service for such an important port. In addition to going directly to the company, it has taken a different approach, calling on the federal government to create service benchmarks for railways in places where there is a rail monopoly. Supposedly, such benchmarks would help all locations with a single rail service, but the real aim is to require CN to meet specific minimum service targets for the Port of Halifax. Maintaining the service schedule for delivering containers that have landed in Halifax to Chicago within 48 hours is viewed as a core requirement for the Halifax port. While it is making conciliatory efforts to support the Halifax port predicament, CN will probably try to resist being tied to strict targets. Rather than offering only punishment if the railway does not meet goals, there are some in government who suggest the province would do better if it also offered an incentive to CN. In theory, if it is lucrative for CN to maintain certain standards of service, the railway is more likely to achieve the goal that is set.

But there is a problem with offering enticements to a North American rail operation like CN. One person’s incentive is another’s subsidy, and CN will be reluctant to accept inducements if it means hassles in doing business in the United States. One alternative may be for Nova Scotia to encourage a competing railway to start serving Halifax but unless there is enough business to support both rail operators, CN might decide to leave Halifax. And then Nova Scotia might be in a worse competitive position than with just one CN train per day. Another roadblock to competition is that CN controls the rail tracks, and any competitor would have to negotiate access rights with CN. Others have suggested the provincial government consider creating its own railway to serve the port. That idea is off the rails and deserves to stay that way. There is no doubt a solution to the rail situation in the Port of Halifax is necessary; the trouble is that none of the possible answers are easy.
( rtaylor@herald.ca)

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