Retail Council of Canada calls for government intervention in Marine Atlantic rate increases

TORONTO, Feb. 8, 2012 /CNW/ - The federal government must prevent Marine Atlantic from imposing unreasonable shipping rate increases, in order to protect the affordability of food for citizens of Newfoundland and Labrador, says Retail Council of Canada (RCC).

"Marine Atlantic recently announced shipping rate increases that will cost grocers anywhere from $250,000 to $400,000 more each year to ship produce and other fresh food from Nova Scotia to Newfoundland and Labrador," said David Wilkes, Sr. V.P. Grocery, RCC. "The federal government must act to prevent these increases, as Marine Atlantic is the only game in town in terms of quickly shipping any food requiring refrigeration, and inevitably these excessive shipping fees will be reflected in higher food prices."

Twice daily, Marine Atlantic ships out of North Sydney, Cape Breton and arrives at the west coast of Newfoundland in Port Aux Basques, after a nine hour sail. To ensure that their merchandise gets on the ship, grocers have to pay a premium of $400-$500 per trailer. In the last few years, the fuel surcharge has increased from 13.8 per cent to 21 per cent of the fare.

The main concern for grocers is the "drop-trailer fee" which Marine Atlantic charges to load and unload the truck trailers at the dock.

Marine Atlantic has full authority to set its own fees. The drop trailer management fee is currently $210 and will rise to $260 each way on April 1.

"There is no reasonable justification for this increase - the federal government must intervene," said Wilkes. "Marine Atlantic has stated that they have always operated at a loss but the federal government is now demanding that the corporation find additional savings and efficiencies," continued Wilkes.

"Increasing drop trailer fees is simply a strategy for Marine Atlantic to increase its revenue on the backs of grocers and the backs of grocery shoppers in Newfoundland & Labrador," concluded Wilkes.

The only other shipper who provides service to Newfoundland and Labrador is Oceanex which ships out of Halifax twice a week.  Oceanex currently does not have adequate refrigeration capabilities to get produce to Halifax, so grocers cannot use Oceanex to ship fresh food.

"Marine Atlantic is effectively a monopoly," Wilkes added, adding the government must protect the interests of the people of Newfoundland and Labrador by ending these unnecessary and unjustifiable increases by Marine Atlantic.

"When the cost of doing business rises at an unreasonable rate, this prohibitive effect eventually trickles down to consumers, which is not what grocers want. They want to provide consumers in Newfoundland and Labrador with fresh food that is affordable."

Jim Cormier
Director, Atlantic Canada
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