Grainnet

Canadian Grain Shippers File New Case Against CN Rail Service

Winnipeg, MB--Six western Canadian grain shippers announced on Sept. 5 they will file new level-of-service complaints against CN Rail, which has failed to comply with the spirit of a recent Canadian Transportation Agency (CTA) ruling.

The outcome of the case will have major implications for grain transportation in Canada.

The first complaints, from the Canadian Wheat Board (CWB) and North East Terminal Ltd., were filed with the CTA.

The CTA ruled in July that CN had failed to fulfill its obligations to Great Northern Grain, a northern Alberta inland grain terminal.

Because of the systemic nature of the rail shipping problems, the CWB and nine other grain shippers were core interveners in that case, also supported by the governments of Alberta and Saskatchewan, other grain-industry organizations and major farm groups.

"Farmers and most of Western Canada's grain shippers continue to be left at a disadvantage from ongoing, system-wide service shortfalls at CN," said CWB President and CEO Greg Arason, noting that four meetings with CN since the CTA's July ruling have not reached a satisfactory outcome.

He said the minor changes made recently by CN will not result in enough flexibility to efficiently move farmers' grain to port.

In their applications, the grain shippers are asking the CTA for an interim order to suspend CN's advance-products program (which will award rail cars to bidders Sept. 6) until a resolution can be found.

They have also formally indicated a desire for a mediated solution that would avoid full litigation before the CTA panel.

The CTA found in July that problems with CN's rail car distribution program were not isolated to one company, but "systemic in nature".

The Agency also found that CN's current rail car distribution practices "have resulted in the replacement of a reasonably accessible, transparent, user-needs based car allocation process with a more restricted, less transparent regime that does not provide an adequate level of services for grain shippers.

"The consequence of this is a radical and detrimental transformation of the nature and operation of the marketplace within the grain handling and transportation system in Western Canada." (Page 20, Decision No. 344-R 2007)

The CTA's decision emphasized the Agency's expectation that its findings would "help to encourage a new and open dialogue between CN and its shippers so that they are able to reasonably deal with car-supply issues independent of regulatory intervention to the greatest possible extent."

Garnet Ferguson, general manager of North East Terminal Ltd. in Wadena, SK, said a meaningful dialogue has not occurred with CN since July.

"The changes that CN has made amount to nothing more than tinkering," Ferguson said.

"We need equal and accessible rail service for all shippers - not just a select few.

"We believe CN has failed in its legal obligation to provide us with adequate service."

The other grain shippers who will file their cases this week are: Parrish & Heimbecker Ltd., Paterson Grain, Providence Grain Group Inc. and North West Terminal Ltd.

The case is also actively supported by Great Northern Grain Terminals Ltd., South West Terminal Ltd. and Weyburn Inland Terminal Ltd.

For more information, please visit http://www.cwb.ca/public/en/hot/rail/ , which includes a link to the July CTA ruling.

For more information, please contact Maureen Fitzhenry at 204-983-3101 or 204-227-6927, Trent Weber at 204-926-8559 or 204-782-3225.