Liability in Marine Ports: Who Pays?

liability in marine

Liability in Marine Ports: Who Pays?

Who pays for damage or loss of containers and cargo during shipment? There is no straight forward reply to this question, since there are several situations which must be evaluated before compensation can be issued. The situations also vary, whereby some may be asking who pays for the damage or loss of cargo during transit, while others will ask who pays compensation during storage at ports. This clearly shows how vast the nature of claims is in the maritime industry. To help shed some light on the topic and make it more understandable, some important situations linked to maritime related compensation cases and solutions need to be addressed.

Container Loss and Damage During Shipment

In most situations, the freight agents will usually take responsibility of the cargo after inspection and payment of the shipping charges. By law, all shipping agents are required to have compensation insurance, which covers any loss or damage to the containers and cargo while in transit. Failure of having the insurance can result in the agent being liable to pay compensation from their own pocket. Even with insurance protection, the insurance company still must investigate the situation to determine who is responsible for the damage or loss and hold them responsible for compensation.

During the shipping process, cargo will usually change hands from the inspection and freight agent to road transport companies, port authorities, marine vessels and vice versa. This means the time and place of the accident will play an important role towards determining who is responsible for paying for the damage or loss of cargo. For this precise reason, you will find that each of the handling companies require deliveries to be signed after inspection, before passing the consignment over to the next handler. This allows easy tracking of the shipment, which helps determine when the damage or loss occurred and therefore, who is responsible for paying the compensation for the damage or losses incurred.

Consequently, each of the handling companies must have effective accident and damage protection insurance policies. Furthermore, they should ensure that they have qualified staff, minimizing the risk of any accidents or losses occurring. In most cases, maritime accidents, such as the loss or damage of containers at port, are linked to the shipping vessels or port authority.

However, for vessels out at sea, weather and other natural causes could result in the loss or damage of cargo while in transit. A different insurance policy will come in to effect in either situation, since some policies require the shipping company or port to offer compensation for damage or loss caused by them. However, accidents related to bad weather will usually be compensated by the general maritime accident insurance companies.

Other types of liabilities can be:

  • Theft of cargo from containers: The responsibility of safeguarding a container carrying your cargo begins from the time the shipping agent inspects the container and places the seal on the container door. At this point, the agent should sign a receipt stating that they have received the container and cargo in good condition; removing any kind of liability for the primary shipper. For this reason, it’s best to contract shipping agents to take over container shipments right from their origin, since this reduces the overall risk and hassle on the container owner.

The delivery note must have the door seal number, which must be verified by the owner, before the container is given over to the next handler. In most situation, the original seal will remain on the container until delivered and only broken when the container owner is present. Situations requiring seals to be broken in transit, require the shipping agent’s representative to be present at the breaking of the seal. Furthermore, the representative must also take responsibility and be accountable for the container and its cargo, before resealing the container and recording the new seal number. This helps to prevent theft, which could occur during transit.

  • Road traffic accidents:  Road accidents could find either the shipping agent or transport vehicle paying compensation for losses, if the container is damaged. It is possible to find container transport trucks tipped over across the road and containers damaged or even looted. In such a situation, the transport vehicle liability insurance would be responsible for compensation of the losses.
  • Marine vessel container loading and port storage: In some situations, containers have also been noted to slip from the hoisting cranes while being arranged and stacked at the port storage facility or while being loaded on to ships. In this case, the port authority would be responsible for the compensation of the container and cargo it bears.
  • Ship listing and container overboard: Although rare, container ships list or tilt due to improper arrangement of the container loads. This could result in the containers falling over board at port or while at sea. In both situations, the container ship is responsible for compensation of the lost containers and cargo. Listing mainly occurs due to human error, but weather conditions may also be responsible. Advances in weather technology prediction have greatly improved evidence that most ship listing cases are blamed on human error; making the vessel responsible for the compensation of lost containers.

Compensation in the maritime shipping industry plays an important role towards protecting each stakeholder involved in the shipping of cargo. Each of the different organisations handling the containers and cargo are held responsible and must have proper insurance protection to avoid liability.

Container damage and loss has greatly reduced in the marine shipping industry due to advances in technology. However, it is still important that each person understands the exact process linked to claiming compensation for loss or damage to containers while in transit.

Potential Marine Port Trucking Crisis

marine port trucking crisisPotential Marine Port Trucking Crisis   

Could there be a crisis in the North American port trucking industry? According to Phil Davies of Davies Transportation Consulting, there is. The recent strike taken by Vancouver port truckers could be just the tip of the iceberg, according to Davies. In fact, truckers engaged in a stoppage at ports in New York, New Jersey, Georgia, and Seattle.

One of the primary areas of concern has to do with the reduction of productivity across many North American container terminals. In markets with weak numbers, terminal operators are forced to bring their own labor costs under control. Obviously, the truckers will be the first to take a hit and that doesn’t sit well with that group.

Another issue appears to be time management. There are too many trucks sitting idle outside of terminals because of a rise in turn times (PDF report). Since truck owners are paid by the trip, anytime they are delayed because of terminal congestion, it costs them money. They want to get in and get out as quickly as possible.

In a recent report, Phil Davies points out various factors that can contribute to poor productivity in truck handling. These include the following:

  • Large container ships: When larger container vessels become the focus of a terminal, congestion is created as resources are deployed for those kinds of ships; while others wait their turn.
  • Restrictive union contracts: The average shift for a truck gate is 8 hours. Apparently, that’s only the situation in North America. Around the rest of the globe, you’ll find that gate operations are ongoing around the clock. One of the reasons that North American operations haven’t adopted this strategy is because of challenges with adapting long-shore collective agreements. At current contract rates, it becomes cost prohibitive to incur overtime. Ironically, this is what is contributing to those longer turn times which the truckers have an issue with.
  • No proper incentives for efficiency: A lack of financial incentives at North American terminals means operators aren’t likely to go the “extra mile” to change the status quo. Down under, at Port Botany Australia, financial penalties that are tied to mandatory performance standards have actually dropped the turn times to 30 minutes or less. Compare that with the average 64 minute turn time at the Port of Vancouver and the 90 minute turn time at Los Angeles and you can see why those incentives could motivate better productivity.

Then there is the issue of the logistics service “blame game” to contend with. This crisis factor was highlighted in the Surface Transportation Annual Review 2014. This survey found that the warehouse distribution centers laid blame with the rail sector for delays. On the other side, the container sector found fault with the level of service delivered from drayage companies.

Clearly, these entities need to be brought to the table for a dialogue about how to improve the situation. None of these problems are insurmountable, as long as concessions are made and everyone keeps their eye on the big picture of improved productivity. 

Marine Industry Supply Chain: Tips for Better Optimization

Marine Industry Supply ChainMarine Industry Supply Chain: Tips for Better Optimization

Getting a product from manufacturing to a store shelf requires a solid supply chain logistic strategy. A weak link involved in the supply chain could cause a complete collapse of the entire system. That is why it is vital for businesses to embrace the following nine items as a kind of marine industry supply chain logistics checklist.

  1. Set Objectives: For their supply chain to be effective, a company needs to have a clear picture of the end game. Yes, it’s about moving goods. However, there are other factors like managing labor fees, transportation costs, and environmental impact that have to be considered when developing these strategies. All of the costs associated with the shipment of goods are “hard numbers” that should be easy to access and update.
  2. Computer Models: Utilizing a thoroughly integrated computer program to analyze data is extremely important for companies who are developing their supply chain logistics. It’s a way of seeing how things will work, before they are put in to practice. The right model should allow a company to predict the costs of a specific shipment based on inventory weights, routes, and even weather conditions.
  3. Embrace the Variables: Even the best model can’t predict the unpredictable. A strong supply chain needs to be able to adapt to the unforeseen. For instance, would your company be able to compensate if a shipment was stuck in a snowstorm for 72 hours? It has happened.
  4. The Right Data: It all comes down to the numbers. Without the right set of data points, your optimization programs will fail. All the factors need to be included in the algorithms you’ll develop for your supply chain formulas. Those factors also have to be current and easy to access.
  5. Total Integration: In order to promote total integration, all of the collected data needs to seamlessly transfer between programs. Keeping track of shipments between ports, warehouses, and retail outlets requires inputting data about orders, sales, operational fleet size, routes, and drivers. Since all of those data points could be coming from different sources, you can see the need for integration. Your clients need to be able to track their shipments from end to end.
  6. Execution: Just because you’ve worked out a comprehensive supply chain strategy doesn’t mean it will be easily implemented. The best strategies are those that can be easily adapted by everyone involved in the supply chain. The real test would be if you were to go on vacation. Can your system be handed off without triggering a breakdown in the chain?
  7. Staff: You’re not going to be able to simply hit “enter” and have all of the information instantly utilized. Your staff needs to become proficient with the use of your models and with importing data. In other words, don’t make things too complex. Also, factor in the need to provide training for your staff. There will be a learning curve.
  8. Monitoring: Once things are up and running, your supply chain will require constant monitoring. There has to be room to make adjustments that suit the business, without alienating customers. Even the best supply chains can benefit from reviews. In other words, there is always room for improvement.
  9. Return on Your Investment: While there are hundreds of cheap boilerplate contracts and purchase order templates that can help keep costs down, your supply chain optimization system is not going to be free. You can utilize established platforms, but you’ll still need to invested time and money into making these programs work for your specific company. Before you proceed with a supply chain overhaul, an honest assessment of your needs is required. This will help to ensure the best return on your investment. If that means bringing in outside help or going offline with your shipments, then that’s what you’ll have to factor in to your bottom line.

Marketing Shipping Ports: International Branding

marketing shipping portsMarketing Shipping Ports: Internationally Branding Your Shipping Port

Branding isn’t just for products like toothpaste and sodas. It is also an essential element to help a shipping port have a strong presence in a very competitive global marketplace. Some ports seem to operate under the assumption that they only need be up and running in order to attract business. The underlining thought being “where else are the ships going to go?”

Nonetheless, branding a port’s identity can help build on a solid reputation and open the doors for new business. It’s all about taking a “forward looking” approach to port operations. For a port operation to develop a comprehensive branding strategy, they first have to identify their customers. This isn’t just about continuing the relationships that have already been established; this also requires meeting the needs of new and potential clients. What are they going to be looking for from a port? Is it about the volume of business it can handle? Safety concerns? Environmental impact? All of those elements can be part of a port operations brand.

A key component of marketing shipping ports is managing expectations. A company has to be able to deliver on the promises it makes to its customers. In the shipping industry, that could come down to a matter of successfully handling traffic. Can you consistently offload and process containers in the amount of time you’ve estimated? Meeting expectations supports your brand and that can be highlighted in all types of marketing materials. Consider FedEx’s slogan, “When it positively has to be there overnight.” That is a simple promise to make when you consider the services they offer, yet it is what FedEx’s entire business is built around. A port should strive for that same approach in their branding efforts.

Assessing the competition is also key in helping a port develop a strong brand. What is your port operation offering that is different from your competitor? This type of approach is important for smaller operations who are hoping to step up into the big leagues. You need to find a way to stand out from the pack.

This doesn’t mean you should overreach. Many ports like to position themselves as a global and local type of operation. Can you be both? Actually, you can. However, it will help to build upon one of those facets before going overboard. For instance, if you can establish open communication with local community leadership on issues such as infrastructure expansion and its environmental impact, you’re creating a brand that proves your commitment to your business’s community. That is a positive message that can be built upon for a global audience.

A company’s history can also play a vital role in brand identity. If a port can find a way to tell their story in a compelling manner, then foreign customers will appreciate the longevity and dependability of that operation. Experience matters and that is what should be conveyed through any branding message.

Revitalizing a port’s brand isn’t the type of project that should be undertaken internally. There are many successful marketing companies that can help a port reshape and reimagining their brand. Those same consultants can plan out an entire campaign and provide the support to launch those marketing strategies. Try to name several port operations. Chances are the ones that are at the top of the list are also the ones who have done the most work with their branding efforts.

In the end, the time spent carefully thinking and planning out the brand of your port will be worth the investment if it means more customers.

The Benefits of Marine Spatial Planning

marine spatial planningThe Benefits of Marine Spatial Planning

A basic fact of port operation is that there will come a time when it needs dredging. As vessels grow bigger, the ports need deeper channels to handle the larger traffic. Unfortunately, the unintended consequences of dredging could prove harmful to fish-spawning beds. This happens as newly dredged sediment invades those fragile eco-systems. Not only is marine life impacted, but also the stakeholders in the port operation who are striving to maintain their own eco-friendly compass. One way to tackle this issue head on is through a comprehensive Marine Spatial Planning (MSP) program.

A proper MSP begins with open lines of communication between the port authorities, engineers, local government agencies, and environmental advocates. Of course, the stakeholders should also be involved in the process. They may even turn out to be valuable liaisons between the groups.

At a recent gathering sponsored by the World Ocean Council, the concept of Marine Spatial Planning took center stage. When done the right way, MSP becomes a program that incorporates the needs of the many, as opposed to a single group with an agenda. The goal is to develop a system that ensures responsible use of the ocean, without adding on the burden of additional regulations.

The Washington D.C. conference highlighted three potential conflict areas that a proper MSP program should address. These include:

  1. Use to Use: How resources inside the planning area, outside the planning area, and emerging/future resources will be utilized.
  2. Use to Resource: How a marine resource such as wind or solar can be developed to offset carbon emitting fuel sources.
  3. Use to Objectives: How the vision for the port comes together while considering all of these elements.

A perfect model for a successful Marine Spatial Planning program can be found in Norway. This process began several decades earlier and involved stakeholders from the initial planning phase. That is when a specific list of priorities for MSP were discussed and worked through. Only after everyone was in agreement regarding issues like the impact to the environment, employment opportunities, and general port operations did the actual work of dredge planning begin. It was a perfect “meeting of the minds” between the oil, gas, fishing, and tourism industries.

For any type of MSP to work, the parties involved need to streamline the conversations that involve local interest groups and the government. For instance, in the New England area, the fishing and tourism businesses feel that oil and gas development aren’t compatible. In the Gulf of Mexico region, they see their energy industry as the mainstay of any economic success. It’s clear that these divergent interests need to be brought together before any type of work alienates the local interests. The last thing anyone wants is a prolonged battle in the courts that ties up development at a port for years.

An organization like the World Ocean Council is poised to act as a facilitator between these various factions. A Marine Spatial Planning program is a great way for marine facilities to remain proactive with the kind of development and expansion that can be a huge benefit for all involved. 

Marine Port Downtime: Ports Struggling with Unscheduled Downtime

marine port downtimeMarine Ports Struggling with Unscheduled Downtime

An idle port is a port that is not making any money. However, despite indications that overall shipping is on an uptick, average downtime rates have gone up in the past year. In a recent survey, 90% of the involved ports reported experiencing some level of downtime. This downtime, when terminals sat idle, resulted in loses that totaled over £100,000 per year, per port. That amount of lost revenue is hard to make up and it can have a huge impact on a port operation’s bottom line.

The cause of this marine port downtime might have less to do with any actual decrease in traffic and more to do with accommodations. Many ports simply cannot handle an increase in container traffic. When the basic infrastructure needs of shipping vessels are lacking, there can be congestion and delays. Those incidents have a ripple effect that can add to a port’s operating costs and may lead to that persistent downtime.

Many ports are taking a proactive stance by developing nearby hubs to handle the increased traffic flow. However, these infrastructure improvements aren’t happening across the board. Too many marine ports are happy to keep the status quo. Unfortunately, they aren’t looking towards the future, especially what an investment in expansion could mean for their business. Ironically, these are the same ports that are reporting downtime losses.

A positive example of how a port can avoid downtime issues can be found at the UK Port of Felixstowe. Recently, Felixstowe has shelled out around £300m to reconfigure their existing fender systems. That is just one of the measures that Felixstow has undertaken in order to remain competitive. They’ve made these infrastructure investments based on industry projections that suggest they could double their capacity within ten years. With optimistic projections like that, the port managers had incentive to spring into action. They’re not going to let any business float by.

The ports that are not taking a proactive approach towards minimizing downtime lose more than just revenue. There could be issues with lack of credit, requiring the need for financial restructuring. When these marine port operations continue to post losses, they are put in a vulnerable position for a take-over. Additionally, relationships between shipping companies and these ports can be forever harmed. Why would a shipping line return to a port that can’t handle their business?

The more struggles that a port has, the greater the risk that shipping companies will look for alternative solutions. Could this be one of the contributing factors as to why many American manufacturers are bringing their operations back to the US?

All of this follows the sage business saying that goes, “If you want to make money, you have to spend money.” That holds especially true for the marine port industry.

Key Issues of Canadian Logistics

Canadian logisticsKey Issues of Canadian Logistics

In order for the Canadian transportation system to meet the demands of a trade-reliant economy, adjustments will have to be made all across its logistical supply chain. This will mean a cohesive working arrangement between the Canadian government and the private sector. Yes, a working arrangement is in place today; however, it needs to be adjusted to align with the changing times. This will allow Canadian businesses to remain competitive in the global marketplace.

It is this issue of increased globalization that is forcing a top to bottom review of Canadian logistics. To meet the growing demand from emerging economies found in China, Brazil and India, the production and excavation of Canada’s natural resources is on the rise. Along with those increases in production comes a greater dependency on the transportation system.

Keep in mind that these upgrades don’t have to occur just within the Canadian borders. A perfect example can be found in the expansion project underway in the Panama Canal. By building out the current lock system, more shipping traffic can flow through the canal. That can have a huge impact on the Canadian economy as more goods can be exported in less time.

The issue of accommodating larger ships is also in play across ports, railways and trucking companies. Coordinating efforts to keep up with the demand is much needed. If there is a breakdown anywhere along the supply chain, then the entire system suffers. Since the United States is still the largest trading partner that Canada has, a focus on improved transborder shipments is essential. This is why an initiative by Beyond the Border is aimed at streamlining the transportation chain all across the US/Canada border.

It’s not just commodities that will require a functioning and expanded transportation system. As the foreign economies grow, Canada can expect to see a rise in tourism. According to some estimates, the total number of airline passengers booking flights through Canada could rise by 3%. To hold these passengers, the standard 74-seat airliner needs to grow to 95 seats. Those planes are already being built. This presents a unique opportunity for the Canadian airline carriers to get on board with an expansion program, or risk being left behind. This goes for both the low-cost airlines and the big players. Suppose new airliner designs require larger runways. Will Canadian airports be able to meet the challenge of welcoming those aircrafts?

On the roads, cross-border passenger traffic is also expected to increase between Canada and the US. Both governments are working on upgraded driver’s licenses that will ease the flow at border crossings. Furthermore, frequent travelers should be able to make use of pre-clearance systems at participating border crossings.

The bottom line is that there won’t be a segment of the transportation industry that will be left untouched by a projected increase in traffic. By getting out in front of these challenges, Canada can play a vital leadership role in modeling how supply chains can adapt. The prevailing wisdom is that we’re all in this together, so let’s make it work

Creating Marine Port Clusters in Canada

marine port clustersCreating Marine Port Clusters in Canada 

The potential for marine ports to expand is an issue that many major facilities around the globe are contending with. This is actually good news because the demand for expansion means that shipping numbers are up across the board.

 Q: How can a terminal that is “locked down” expand?

 A: By setting up marine port clusters in the area.

Port clusters are a group of complementary companies that set up business in a region to service common clientele. University research has shown that regional clusters of interlinked industries, organizations, and institutions act as a fertile ground for innovation, entrepreneurship, and the upgrade of competitive advantage among firms.

A perfect example of this type of development can be found at the Port of Savannah in Georgia. Because of the increasing demand, additional marine ports were built as a kind of satellite terminal. These operations are owned by CSX and Norfolk Southern. Combined, they were able to move 314,623 containers last year. That certainly takes some of the burden off of the Port of Savannah and keeps operations moving.

In addition to the marine ports, there have been several logistic zones set up around the main port. These include the Crossroads Business Park and the Savannah River International Trade Park. These facilities allow major players like Target and IKEA to set up distribution centers (DC) that can take advantage of the expanded Port Authority terminals.

Across the Atlantic, the Port of Rotterdam has set up its own cluster zones. It is through these ports that the goods of Europe flow. The vitality of the European Union depends on this commerce.

For its part, Rotterdam set up a specific organization, Deltalinqs, charged with coordinating all the work of the cluster operations. Deltalinqs represents over 600 companies in the surrounding area. That is just a fraction of the 3,550 companies that use the Port of Rotterdam for some type of cargo handling.

Thanks to the development of these marine port clusters, the Port of Rotterdam is also able to accommodate other types of businesses beyond the shipping industry. The result has been that energy and chemical companies now make up 50% of the total revenue generated at the port.

Marine Port Congestion

Even with the clusters in place, congestion is still a major issue for any company doing business through Rotterdam. This has driven the logistics company, Waalhaven Group, to move its operations 200 km beyond Rotterdam. The affordable land prices and access to infrastructure is drawing other customers to Waalhaven.

Next to Rotterdam, Antwerp is the largest marine port in Europe. Here too, the available land can’t meet the demand for expansion. To accommodate the expansion, Alfaport Antwerp is partnering up with Flemish officials to create an environment that will be friendly to incoming businesses as the plans for port clusters are being developed.

The coalition, put together by Alfaport, consists of 400 members from various industry groups. Among the associations involved in the development are the Antwerp Stevedores Association, the Antwerp Shipping Federation, the Royal Belgian Association of Shipowners, the Royal Association of Trafficflow Controllers and the Association for Forwarding, Logistics and Freight Interests in Antwerp.

Here in Canada, marine port operations can learn a lot from these port cluster expansions. As a port executive, it would make sense to initiate these conversations with the government and key partners as shipping traffic increases. By involving the government and shipping associations at the early stages, port officials can get everyone on the same page and keep them there.

Keep Your Port Running During a Disaster

port runningKeep Your Port Running During a Disaster

A comprehensive port security plan is implemented to safeguard what comes in and what goes out of a harbor. These measures include inspections and reviews of a select number of vessel cargos. Inquiries are also made of the crew members as they enter through security checkpoints. These types of procedures can insure a port’s level of security.

However, what happens if an unpredictable disaster strikes? There is no way any port can be 100% protected from events like crippling weather storms, terrorist attacks or ship collisions. These events don’t have to lead to port operations coming to a standstill. Not if you have a viable mobile command center ready to deploy at a moment’s notice.

The goal of these mobile command centers (MCC) is to provide a continuation of operations through the use of communication and tracking equipment that can be powered up from any location. A proper MCC will be able to fully integrate into all of a port’s operational systems by literally flipping a switch. Already, these types of MCC units are being deployed in major ports across the globe and they are proving to be a valuable asset.

This past July, the Georgia Ports Authority launched its upgraded mobile command center that was specifically designed to continue port operations in the event of a devastating hurricane. As the past several storm seasons have proven, any port along the eastern coast of America is vulnerable to a direct hit from a major storm. By having a MCC unit in place, port managers can assure the users of their port that cargo will continue to flow with only minor disruptions in the event of a hurricane.

Georgia’s MCC is a 53-foot unit equipped with nearly a dozen computer workstations. There are also onsite security cameras, fully upgraded radios and dispatch consoles. All of the collected data used by the MCC is viewed on the flat-screen televisions that have been custom mounted. All aspects of port operations from issuing payroll to coordinating freight movements can be conducted through this command center. With a cost of $1.5 million, it is a fraction of the billions of dollars’ worth of goods flowing through the port. Fortunately for this port, the bulk of the funds were allocated through a grant from the U.S. Department of Homeland Security. When you consider that every day a port sits idle, millions of dollars can be lost, this is clearly a wise investment.

The busy port of Seattle, Washington recently upgraded their mobile command center with an $800,000 vehicle. The unit includes touch screen control panels and a conference seating area capable of accommodating up to six staff members. This MCC can also function as a 911-dispatch center in the event of losing communications with the rest of the city.

These MCCs are meant to be deployed in a wide range of situations including fires, chemical spills or even visits from VIPs that require heightened security. Every port has the responsibility to be prepared for the unexpected. With all the amazing advancements in communication and other forms of technology, there is no excuse for a port to not be ready.

Is your port ready for an emergency? 

The Fair Rail Freight Service Act

Fair RailThe Fair Rail Freight Service Act

Are you familiar with Bill C-52? This is the Fair Rail Freight Service Act that was recently passed into Canadian law. The goal of the act was to improve rail service for any business that depends on the railways for their logistics. According to the law publications, here is how the lawmakers framed the bill’s objectives:

  • “Give freight shippers the right to enter into service agreements with railway companies and establish an arbitration process in the event of a dispute between a shipper and a railway company regarding such an agreement;
  • Streamline administrative procedures related to air transportation;
  • Update certain provisions related to the administration of the Act.”

How would this new bill be put into practical application for your shipping? Especially when you deliver large goods across the country?

Consider the canola industry. This segment of the agriculture industry depends greatly on rail service to transport massive amounts of seed, oil, and meal to the export processing depots. Without reliable rail service, the supply chain of this industry could collapse and it wouldn’t take much disruption to bring everything to a halt. Because of this, the Canadian Canola Growers Association (CCGA) were one of the leading advocates on getting this bill passed into law.

For too long, poor rail service across Canada has impeded growth for many companies. With the implementation of this bill, they are eager to see if the changes will have a lasting impact on their bottom line.

One of the key components of Bill C-52 is the ability for shippers to secure a service agreement. These agreements should spell out, in no uncertain terms, what is expected of the rail agency in regards to shipment protection and delivery deadlines. These agreement will also include a clause that will activate an arbitration process if there is a failure on either the part of the rail company or the individual businesses to finalize the agreement.

What is crucial to make a bill like this work is the penalty for poor performance. As indicated in Bill C-52, there could be fines of up to $100,000 charged against the rail agents for any case in which they drop the ball on a service agreement. Given some past occurrences, this could be a very costly clause if the railways don’t get their acts together. Will they pay the fines, improve service, or find ways around Bill C-52? Only time will tell.

To insure that the bill is being applied as it should, objective third party representatives will need to step in to monitor the situation. All of these work methods will come under intense scrutiny during the mandatory Canada Transportation Act review. This will happen next year and should shed light on all the areas that could benefit from improvement in the years to come. Hopefully, the railways will score high marks if they embrace Bill C-52 as a better way of doing business.