The Canadian House of Commons passed the Fair Rail Freight Service Act, which encourages shippers and railroads to negotiate service agreements and gives shippers access to an arbitration process if no agreement is reached.
The Canadian Transportation Agency will serve as arbiter when needed and will have the authority to mete out a fine of up to $100,000 for violations of arbitrated agreements. Officials say this new rule will encourage collaboration and boost efficiency in the supply chain.
"Our government is pleased to see that another significant step has been reached regarding this important legislation,” Minister Denis Lebel said in a statement. “Once adopted, this new act will contribute positively to relations between shippers and railway companies, and enhance the effectiveness, efficiency and reliability of the entire rail freight supply."
Earlier this month, the U.S. Surface Transportation Board adopted a new arbitration program for shippers and railroads, which will start June 12. Officials said the changes would lead to more parties using the arbitration process, which will ultimately reduce costs for all industry shareholders involved. - Jon Ross