Railway Association of Canada

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Railway Association of Canada

• Rail Can Do More
• Presentation to the House of Commons
  Sub-Committee on International Trade, Trade
  Disputes and Investment
• On Track for the Future
• October 31st, 2001

www.railcan.ca
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OUTLINE
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• About the RAC
• September 11, 2001
• How has rail been affected ?
• Security
• Rail related border initiatives
• Rail Can Do More
• Conclusion

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ABOUT THE RAC
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• 56 members
• Represents virtually all Railways operating in
  Canada today
• Class 1s (CN and CPR)
• Short lines
• Inter-city Passenger (VIA)
• Commuter
• Tourist
• Together members carry
• 4.2 million carloads annually
• 1.7 million containers and trailers
• 51 million commuters, inter-city and tourist
  train travelers

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SEPTEMBER 11, 2001
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• A tragic day for humanity
• Today, the US is almost totally focused on
  security while Canada is focused on trade they
  because their security is threatened, we because
  out trade is threatened
• Outcomes
• Economic slow-down will be exacerbated
• Significant negative impact on corporate profits,
  especially airline, tourism and financial sectors
• Careful control and processing of individuals
  crossing borders
• Need for new spending by governments

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SEPTEMBER 11, 2001(contd)
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• Long term implications
• Potential for significant tightening of US
  security posture at Canadian border (ex.
  check-in, check-out)
• Long term Canadian economic performance closely
  tied to border efficiency
• Potential for loss of investment in Canada

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HOW HAS RAIL BEEN AFFECTED?
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• Third quarter 2001 Class 1 (CN CPR) revenues
  flat
• Rail traffic flows have not been severely
  affected by September 11th tragic events
• Impact less than other modes because of previous
  investments and best practices
• Concern about length and severity of economic
  downturn potential lag effect on rail
• Class 1 (CN CPR) companies focused on reducing
  costs in line with the slowdown
• Impact of economic slowdown on short line sector
  still unknown but could be significant
• Intercity passenger traffic up by approximately
  10

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RAIL HAS SECURITY ADVANTAGES
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• Dedicated, private and controlled corridors
• Large railways have their own police forces
• Railway security measures in place since 1997
  Memorandum Of Understanding (MOU) between RAC
  and Government of Canada
• Rail engages in large movements of high-volume
  goods with a small number of highly-trained,
  professional employees

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WHAT ELSE IS RAIL DOING TO INCREASE SECURITY ?
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• In regular contact with Transport Canada security
  officials in Ottawa
• Have taken numerous voluntary steps such as
• Linking into the North American 24-hour security
  control centre
• Increased vigilance at tunnels, bridges and other
  critical facilities
• Working with the Association of American
  Railroads to ensure coordination on a continental
  basis

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CONSIDERATIONS
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• Must ensure that any government measures adopted
  are collaborative (Canada and U.S.), reasoned
  and effective
• U.S. Government being proactive in identifying
  funding to support new border and security
  measures
• Canadian Government must take lead on ensuring
  that the flow of goods between the two countries
  is not compromised

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9
CN AND CPR HAVE BECOME TRULY NORTH
AMERICANCOMPANIES
Truck Rail Surface Export Share to the
US Volume 1999
Source Transport Canada
Deregulation of rail in Canada is a success story
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NAFTA CORRIDORS HIGHWAY vs RAIL
Vancouver
Blaine
Huntingdon
Calgary
Moose Jaw
P
C
Winnipeg
Kingsgate
Coutts
Portal
Emerson
Duluth Jct.
Montreal
Sault.Ste-Marie
CN
Portland
Massena
Rouses
CN (WC)
CN
Point / East Alburgh
C
N
BNSF
Minneapolis
Niagara
Falls
Sarnia
Buffalo
Detroit/
New York
Windsor
Salt Lake
City
Chicago
Sacramento
Washington DC
Denver
S
Kansas City
N
Colton
Barstow
Oklahoma
City
Memphis
Mexicali
Dallas
El Paso
Nogales
New
Eagle
Orleans
Pass
Legend
Rail lines are a parallel network to the highway
system
Railroad
Laredo
Miami
Highway
Railroad lines represented here are examples of
major railway connections other routes may also
offer similar connecting service
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RAIL RELATED BORDER INITIATIVES
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• Pre-September 11th, railways were proactive in
  facilitating transborder movements
• Almost two million shipments a year cross the
  border
• Electronic commerce
• Significant investment in information technology
  North American railways have the best data
  systems in the world
• Automated customs transactions and pre-filing
  systems in place for the vast majority of rail
  traffic improved customer service and reduced
  train throughput time

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RAIL RELATED BORDER INTIATIVES
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• Others ?
• Better alignment of customs policies
• Pre-qualify low risk freight and law-abiding
  people to focus resources where needed
• Customs inspections at destination or origin
  where this practice is more efficient (i.e.
  yards)
• single inspections to the standards of both
  countries for domestic and offshore shipments
• Central database and common computer systems that
  all carriers, brokers, importers/exporters would
  use to file information pertinent to crossborder
  traffic for customs and immigration purposes

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RAIL CAN DO MORE
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• Leaves a small environmental footprint
• Rail is five times more fuel efficient than
  inter-city trucking and three or four times more
  fuel efficient than automobiles
• Parallel network can lessen highway congestion
  (truck and auto) and land use consumption for
  highways
• Dedicated corridors into the US which can lessen
  bottlenecks at border crossings and facilitate
  the most efficient moves for mid to long distance
  freight shipments
• Primarily privately funded and maintained network

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RAIL CAN DO MORE (contd)
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• How can Canada achieve increased modal balance ?
• Tax harmonization/equity
• Introduce innovative transportation policies to
  promote environmental sustainability and
  efficiency
• Commercial road user fees
• Green taxes
• Incentives to use intermodal
• Develop and implement a comprehensive national
  Surface Transportation Policy
• Promote passenger rail by providing capital and
  regular operational funding for
  passenger/commuter rail

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CONCLUSION
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• Trade is critical to Canadas economic
  performance
• Border security must be enhanced yet trade must
  continue to flow, more smoothly if possible
• Rail is an important component but can do more
  with some policy realignment
• Rails proposed initiatives can help accomplish
  this