MANAGING TRAFFIC - GREGORY S. JOHNSON CANADIAN SHIPPERS UP IN ARMS OVER RAIL REFORM

MANAGING TRAFFIC - GREGORY S. JOHNSON CANADIAN SHIPPERS UP IN ARMS OVER RAIL REFORM

Canadian rail shippers are pushing hard to make sure language in the proposed National Transportation Act of 1995 doesn't gut gains won eight years ago.

The rail reform measure presently before Parliament could result in shippers having access to just one rail carrier, said Ron Garson, manager of distribution at Robin Hood Multifoods Inc. in Markham, Ontario."What they're trying to do is make it a little more difficult to use pro- active shipper devices in the old act," said Knute Bjorndal, manager of transportation at Weyerhaeuser Canada in Vancouver, British Columbia.

With the railways being granted ease of exit, shippers worry about maintaining a competitive stature, said Mel S. Nunweiler, general distribution manager for Canadian Forest Products Ltd. in Vancouver.

Shippers could lose the right to competitive access switching under the bill, designed to update NTA, passed in 1987. They'll have to prove they're captive, like they did in the days of regulation, said Maria Rehner, president of the Canadian Industrial Transportation League in Toronto.

The proposed changes mandate that the National Transportation Agency hears a shipper's case only if there's no other forum available to adjudicate the problem, she said. "Suppose you can get relief for an inter-switching problem in Superior Court or the provincial courts, but the judge hasn't heard of what inter-switching is."

A bevy of groups have joined CITL in a shipper coalition opposing the proposed rail reform legislation. CITL, the Western Canada Shippers Coalition, the Canadian Pulp and Paper Association and the Canadian Manufacturers' Association plan to inundate legislators with recommendations before Parliament rehears the bill in September.

Shippers also are furious that the federal government is changing Section 27 of the NTA, which addresses shippers' rights, apparently to make CN North America more attractive for prospective buyers. Shippers charge these changes could make their life even more unbearable. "This is getting curiouser and curiouser," said Ms. Rehner.

SHIPPER RESISTANCE KILLS RATE HIKE PLANS

Just as they indicated five weeks ago, shippers have proven so resistant to carrier attempts to impose a mid-summer general rate increase, that Roadway Express Inc. has given up trying to nudge prices upward.

A mid-summer rate boost looked like a sure thing when Roadway in June backed CF MotorFreight, which had proposed a 3.5 percent rate increase.

But in the face of stiff opposition from shippers, many of whom made no secret of their ability to divert freight to non-union regionals, Roadway this week said that instead of imposing a second general rate increase, it would look to renegotiate discount rollbacks shipper-by-shipper.

Roadway's backdown is an attempt to show good faith with its shippers while at the same time making sure it hangs on to any wavering customers, said Judy Colfer, traffic manager at Mine Safety Appliances Co. in Pittsburgh.

Most shippers don't seem surprised at Roadway's turnaround, particularly as they blame the troubles of most ailing LTL haulers on rampant rate discounting. "And it's unfair to make shippers pay higher rates to make up for those carriers who are driving down freight rates," said Dale Sheehan, corporate traffic manager for Conair Inc., the East Windsor, N.J., consumer products maker.

SHIPPER SIDES WITH RAILROAD THIS TIME

Here's a switch - a shipper that's choosing not to fight abandonment of its only rail line.

Union Pacific Railroad has filed to abandon its 5.8 miles of Industrial Lead between Alexander and Grace, in eastern Idaho, but that doesn't seem to faze Farmland Industries Inc., which has a grain elevator in Grace.

The Kansas City, Mo., agricultural products giant normally proves stiff opposition for railroads attempting abandonments, but this time, Farmland is siding with UP.

"Of course, we're concerned. We never like to see a rail abandonment. But this is predominately a truck market, and I can understand UP's position," said Dave Hanson, Farmland's western region manager from Odgen, Utah. If UP were to fix the line, the carrier couldn't possibly recoup its maintenance costs.

"The costs of rehabilitating the bridges on the line are way out of proportion to any revenue," said John Bromley, a UP spokesman. The track is part of UP's 23-mile Dry Valley branch.

Mr. Hanson said grain bid prices at Grace are tabbed to include truck hauls

from the elevator to a railhead at Bancraft, a few miles away, so direct rail hauls are rare. During the past year, the elevator at Grace shipped just 40 carloads of barley and wheat, said Keith Sarbo, Farmland's merchandising manager at Odgen.