August 13, 2008 / 1:08 AM / in 9 years

Canada says rail service review may take 18 months

TORONTO (Reuters) - A review that will examine freight services provided by Canadian National Railway Co and Canadian Pacific Railway Ltd could take up to 18 months to complete, the Canadian government said on Tuesday.

The review, which was announced last year and began in April, covers Canada’s rail-based logistics chain including shippers, terminal operators, ports and vessels.

It will be a two-phased process, Ottawa said in an update. The first phase will investigate problems and analyze data, and the second phase will see a three-person panel consult participants and make recommendations.

“The fact that we are moving forward with this review is good news for shippers of a broad range of commodity groups and will benefit grain farmers as well,” Canadian Transport Minister Lawrence Cannon said in a statement.

“I am particularly interested in the development of indicators that would help monitor system performance and expedite improvements when problems arise.”

Canada’s two railways, CN and CP, have enjoyed a booming business in recent years, but some customer groups, particularly grain shippers, say service levels have deteriorated while rates have climbed.

Canadian grain shippers rely on the railways to ship their products from the Prairies, one of the world’s largest exporting regions, to ports more than 1,000 km (600 miles) away.

Reporting by Lynne Olver; Editing by Peter Galloway

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