Railway association report shows Canadian railways are low-cost winners

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by Emily Atkins

Canada’s average rail freight rate is 11 percent lower than that of the U.S. and significantly lower than rates in other parts of the world.

The  Railways Association of Canada (RAC) recently published these findings in a report it commissioned from global transportation consulting firm, CPCS. Using publicly available data, the study, International Comparison of Rail Freight Rates, surveyed 11 countries representing two-thirds of global GDP.

The report found that Canadian rates are significantly lower than those of market-based economies in Europe and Asia – all of them leading trading nations like Canada.

The CPCS study compared railway freight rates across 11 countries, including Canada, all of which are home to high-performing rail systems.

Rail freight rate comparison

In 2021, shippers paid 4.16 U.S. cents per revenue ton-mile on railways in Canada and Western grain shippers paid nearly 30 percent less than the average rate at just 2.97 U.S. cents per revenue ton-mile.

Canadian rail freight rates have grown more slowly than U.S. rates – 43 percent vs. 72 percent – over the last 33 years and at less than half the rate of commodity and general prices over that same period.

“We’ve known for a long time that Canada’s freight railways are the safest in North America. They are also the most cost effective on the continent and have among the lowest rates in the world,” said Marc Brazeau, president and CEO of RAC.

The report found that rail freight rates in China and Russia are lower than Canada’s, but it points out that both are state-owned, and thus are not on a level playing field with Canadian railways. India, where the railway is also government owned and operated, and Japan show the highest rates.

The RAC advocates for almost 60 Canadian freight and passenger railways.