CN found in breach of service to grain shippers

OTTAWA — Four out of six grain shippers have been vindicated in their cases against CN Railway, which they claim has not been providing an adequate and reasonable level of service for the movement of Western grain for crop in 2007 and 2008.

The Canadian Transportation Agency ruled that CN did not fail to meet its obligations under the Canada Transportation Act for services to Canadian Wheat Board and Providence Grain Group Inc.

However, the CTA did side with North East Terminal Ltd., Paterson Grain, Parrish and Heimbecker Limited, and North West Terminal Ltd. in similar complaints.

“Our grain terminals are now struggling to get rail cars when we need them for our markets because CN’s program requirements have been so rigid and unworkable for us,” said GNP Transportation & Logistics manager Perry Pellerin. “As a result, none but the largest grain handlers with multiple elevators could fit within CN’s service model, which strongly favored those who can ship in large rail car blocks, week after week, to a single destination.”

In its ruling, the quasi-judicial agency determined that a performance benchmark should be applied as a basis for determining whether CN is providing the shippers proper levels of service, including the confirmation of the number of rail cars requested by the shipper, as the timeliness and predictability of railcar delivery.

CN has been ordered to confirm 80 percent
of grain shippers’ requested rail cars

"This provides shippers with certainty that they will receive a reasonably high number of rail cars based on their order," states the agency.

Effective immediately, CN must confirm a minimum of 80 percent of the grain shippers’ requested rail cars; and deliver 90 percent of those cars on time or in the subsequent two weeks.

If not, CN must be able to demonstrate "that exceptional circumstances prevent it from doing so."

The agency also urged CN to recognize factors that affect railway performance such as weather, terminal unloads, excessive demand for rail cars in peak periods, operational restrictions and derailments.

Keith Bruch, vice-president of operations for Paterson Grain, said the situation highlights the dangers for the captive grain shippers, who have no choice but to deal with a single railway company at most Prairie grain elevators.

“Without adequate competition in Canada’s rail system, there must be some way to ensure accessible service for all shippers — not just a select few,” Bruch said. “The laws governing grain shipping were created in recognition of this imbalance. It’s a shame that we are forced to continually battle to have CN comply with those laws.”

Earlier this year, Transport Canada launched a review of rail freight service standards.

The scope of the review is Canada’s rail-based logistics chain, including shippers, terminal operators, ports and vessels. It will focus on service provided by CN and CPR, including wheat transport, as well as other freight tracked to and from ports and border crossings.