In Defense of Rail: Claude Mongeau's Contribution to the Logistics Discussion

An abrupt farewell to the jig-inspiring music and the busy clinks and clangs of dishes filled the silence. The webcast streaming from the Winnipeg Chamber of Congress began and Claude Mongeau was set to hit the stage. Mongeau’s stance on logistics was likely already understood by all in attendance, given his role as CN’s president and CEO; what was striking, however, was the emotion his speech conveyed.

“The government is about to speak, and railroads — and railroads alone  — are about to be regulated in a way that I don’t think is good for the country, and I don’t think is good for the grain trade either,” said Mongeau, who likened himself to a general losing a battle.

2013/2014 Grain Cars Spotted
2013/2014 Grain Cars Spotted from Perspectives on a 100-Year Crop

Besides an obvious distaste for recent government decisions around logistics, Mongeau was quick to address various aspects of the rail system that have been under fire. Acknowledging not enough trains were moved in the winter months, Mongeau explained that the winter saw some of the harshest conditions in decades and counter-argued that elevators should not have over-booked and should have pushed for grain movement earlier.

“This is a complex supply chain — railroads are not alone,” Mongeau insisted.

Regulations will do nothing to deal with supply chain efficiencies, he affirmed and reaffirmed in his speech. They will instead stifle innovation, hurt investments and turn the clock back 50 years. Thus, should Bill C-30 be moved into law, Mongeau fully intends to argue for increased regulation at the elevator-level also.

Overall, the address was an informative and impassioned amalgamation of criticism, suggestions, veiled threats and pleas for collaboration. Mongeau evoked feelings of sympathy and guilt, while also inspiring a certain level of frustration induced by hypocrisy. He may have felt like a sergeant losing a battle, but Mongeau appeared as a cornered politician, begging for a stop to finger-pointing, while his remained outstretched.

Here’s hoping this address signals the end to the entire supply chain’s much-needed vent session. Let’s now move forward with constructive discussions around the suggestions presented along the way.

 Watch Claude Mongeau’s entire Winnipeg address online courtesy of CN.  

3 thoughts on “In Defense of Rail: Claude Mongeau’s Contribution to the Logistics Discussion

  1. Best thing that ever happened to the oil industry was breaking up Standard Oil. The competition bred innovation and efficiency. Investors made a fortune. I’m afraid this bill will do exactly what Mongeau says and not move sufficient product. The rail system is at the limit of what it can carry. Our exports are growing every year. This bill ignores the fact that this country needs to invest in infrastructure. I say break CN and CP into 10 different companies and grant equal running rights. We would likely need a separate body to handle logistics, but we need that anyway. This would create a real market in rail. Create efficiency and innovation. Monopolies are not efficient because they have no reason to be.
    Well, that’s my 2 cents

  2. I agree with Shane that breaking the rail companies into smaller companies with equal running rights is the absolute best case scenario! But until the government gets this idea through their head, the railways absolutely need some form of regulation to keep the monopoly in check. I don’t want to see the cap come off until there is competition in the market

  3. One of the frustrations I feel sitting where I do, is that I don’t know how accurate some of Mr. Mongeau’s criticisms are. I know there that with the elevators I deal with, there is no time wasted when car’s arrive. Car loading is always the first priority. Is the same true at the coastal terminal end? I don’t know, and given the laid-back character of the west-coast, I suspect there is room for improvement in the unloading end of the system. I wish I knew for sure. There is however one statement in Mr. Mongeau’s address that I found to be very troubling. Mr. Mongeau suggested that increasing the inter-switching distance would allow other rail companies to “poach” CN’s business. As the Western Canadian Wheat Growers Association suggest, CN is not entitled to this business. They should have to earn it. I would suggest that in this instance it is Western Canadian farmers who be entitled. They should be entitled to expect at least some level of competition for the business of hauling their grain. Mr. Mongeau’s address reinforces the impression that now there is none.

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