June 22, 2023

Some random transport things this morning.

Canadian rail safety technology is decades behind the USA, even though the market oligopoly of CN And CP operate in both markets. The implementation of collision avoidance, support for employees to reduce and deal with fatigue, and automatic stopping systems if problems are detected have not been implemented in Canada.

Why? Regulation of the rail industry seems to lag in almost every possible way.

A recent safety report of Canadian rail derailments have outlined the problem: governments consistently ignore their recommendations to force investment in safety.

Most of the reason for the lack of regulation is the total number of accidents have been fewer and/or in more remote locations than in the USA and Europe. No visible accidents, less regulation. The Canadian section of these companies are also benefiting—though later—from investments forced in the USA where some systems that benefit profits are then brought into the Canadian system.

In fact, the largest focus of government is not around directing the Canadian parts of the rail system, but in trying to introduce more market-based competition. Market creation, also known as deregulation, is about reducing costs for shippers (and consumers) by driving down labour costs.

As we have seen in trucking, profits are unaffected by these sorts of deregulatory environments. All that ends up happening is that companies with lower labour costs and less longer-term investments displace older companies with established labour frameworks and union contracts.

This has opened-up an interesting dynamic around investment between Canada and the USA/EU. The lack of enforced investment in safety technology has resulted in more investment in profit-maximizing automation of non-safety supporting parts of the transport system. Inspection, monitoring, logistics, just-in time systems that are all designed to avoid warehousing products.

Rail is a mostly hidden from sight part of the supply chain, but it is essential in the response to climate change. Rail systems—even when burning diesel—are massively more efficient than other forms of long-distance transport. Rail is currently 1% of the global emissions from transport and emissions are nine time less than road transport and consumes six times less total energy per kilometre of travel. This means that electrification of this part of the system is easier to achieve than other forms of travel.

In Canada, where distances are so far, it makes perfect sense to invest in rail expansion.

Unfortunately, the comparatively lax regulatory environment in Canada means poorly directed investments. A push to outsource jobs through automation instead of investments in upgrades, increases in the number of parallel tracks, and safe rail transport programs.

And, this is just freight movement. When we look at transporting people, the logic applies even more.

Ontario just realized that it is much less expensive to run rail to our Northern communities than maintaining clear road transport, re-establishing Ontario Northland rail to Timmins less than ten years after cancelling the program.

But, Canadian liberal politics cannot figure out how to do this and create jobs in Canada, relying on products designed, built, and maintained elsewhere. This would be less of a problem if technology made elsewhere could deal with the Canadian climate, but they cannot. Constant delays in procurement and Jerry-rigging of technology when it arrives reduces efficiency and safety of these systems.

An industrial strategy for responding to climate change and the future needs of the Canadian public and transport of goods must include full integration of supply chain infrastructure. The program of relying on the "market" to provide these has had 30 years of failure to deliver. There is another way.