Retail council calls for an intervention

Staff ~ The Telegram
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National group says federal government should stop Marine Atlantic rate hikes

The Retail Council of Canada wants the federal government to step in to prevent what the council says are unreasonable shipping rate hikes by Marine Atlantic.

The council, which represents 55,000 retail operations across Canada, says the rate increase will cost grocers anywhere from $250,000 to $400,000 a year to ship fresh food from Nova Scotia to Newfoundland. Jim Cormier, the council’s Atlantic Canada director, says the rate hikes are significant and unjustifiable.

Grocers pay a premium of $400 to $500 per trailer, and in the last few years the fuel surcharge has risen from 13.8 per cent of the fare to 21 per cent. The biggest problem for grocers, says the council, is Marine Atlantic’s raising of the drop-trailer fee, which is what the corporation charges to load and unload truck trailers at the dock.

The council wants the federal government to prevent Marine Atlantic from raising its rates.

Rate hikes ‘unreasonable

“It’s an absolutely unreasonable shipping rate increase,” Cormier said Wednesday.

“The trickle-down effect for our grocers in this, plain and simple, is it’s going to result in increased prices for food for Newfoundlanders and Labradorians, particularly in the fresh produce. When it comes to shipping fresh produce, Marine Atlantic is the only game in town. Because of competition, the grocers have been eating the last number of cost increases that have gone through from Marine Atlantic. That said, there’s always a portion of it that ends up getting trickled down to the consumer.”

That’s a problem for the province, he added, because Newfoundlanders and Labradorians are already paying more for fresh produce than consumers on the mainland.

Little competition

Marine Atlantic’s only shipping competition is Oceanex, said Cormier, which only sails to Newfoundland twice a week and doesn’t have the same refrigeration capability for produce, said Cormier. He said Marine Atlantic’s rate increases have less to do with increased operating costs than with the federal government cutting the corporation’s subsidy.

“They’re getting cut by the federal government when it comes to their subsidy, and so they’re just trying to make up the money,” he said.

“So what we’re saying is look, this is an extension of the Trans-Canada Highway. This is part of the deal to bring Newfoundland into Confederation. If you’re going to have these deals in place, then you have to respect that. And if the federal government is going to be a player in helping to ensure that Newfoundlanders and Labradorians are able to access the same services at a reasonable level to what people in the rest of the country have, then on something as basic as the need for food, particularly healthy food like you’d get with fresh produce, they have to ensure that is still able to happen.”

telegram@thetelegram.com

Organizations: Marine Atlantic, Retail Council of Canada, Marine Atlantic.The council Trans-Canada Highway

Geographic location: Newfoundland, Atlantic Canada, Nova Scotia

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Recent comments

  • Walter
    February 10, 2012 - 08:36

    Newfoundland grocers have fresh produce? Maybe coleman's in Corner Brook, but the other two, ya right!

  • Oh Please
    February 09, 2012 - 09:42

    If "fresh food" was their real concern then they would buy more of it from local farmers. You can't get any fresher than food grown here. No, this all about profits.

  • Brian
    February 09, 2012 - 08:34

    Why hasn't our provincial goverment taken the Fed's to task on this issue. This link was agreed to when we joined Canada!!!! Why are we paying as much as we are?? This was an extension of the Trans Canada Highway and we should only be paying what the gasoline cost is to travel the same distance, NO MORE!!!!

  • Townie
    February 09, 2012 - 08:19

    It is a mystery to me why grocers would absorb freight costs when their competition have the same costs. What is going on here? There must be some other side to the story.