Lower costs for Canadian grain shippers

NITL (The National Industrial Transportation League) -- Logistics Management, 3/4/2008 12:23:00 PM

Canadian federal transport leaders this week hailed a decision that will lower costs for the rail shipment of western Canadian grain bound for export markets.

Transport Canada said Transport Minister Lawrence Cannon welcomed the recent decision by the Canadian Transportation Agency regarding a downward adjustment to the revenue caps for Canadian National Railway and Canadian Pacific Railway for the movement of western Canadian grain.

"Farmers need an effective, efficient and reliable transportation system to remain competitive," said Cannon. "I am pleased with the Agency's decision as it should result in lower freight rates for western farmers shipping their grain to export markets and therefore more competitive prices."

According to Transport Canada, the Canadian Transportation Agency announced a final adjusted volume-related composite price index of 1.0639 for railway revenue caps for the movement of western grain for crop year 2007-2008. This represents an estimated $72.2 million reduction (or about eight percent) to the 2007-2008 revenue caps, which translates to $2.59 per ton based on forecasted tonnage of 27.85 million metric tons.

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