For the third time in less than a year, Canadian National Railway is in hot water with a group of grain shippers.
This time it’s over new grain car shipping rules introduced by the rail company on Feb. 1.
Five grain companies, along with the Canadian Wheat Board, have asked the Canadian Transportation Agency to order the railway to go back to the previous system.
The same group won service complaints against CN in March and September 2007, arguing successfully that the railway’s shipping programs discriminated against small shippers.
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There is usually a 120-day deadline for the CTA to rule on such complaints, but agency spokesperson Marc
Comeau said the CTA will deal with this latest complaint more quickly.
“They have requested emergency relief so we’re hoping to have a decision in the next couple of weeks,” Comeau said.
Under the new program, shippers are to place orders for empty cars to be placed at specified loading locations, one week to 24 days in advance.
Until now, cars have been allocated based on what needs to be moved to ensure that the right grain arrives at export position at the right time to meet arriving vessels.
Keith Bruch, vice-president of operations for Paterson Grain, one of the complainants, said the new program is inappropriate for the grain industry.
“It does not recognize the industry’s unique requirements and will cause substantial commercial harm to shippers and farmers, who rely on adequate rail service,” he said.
The Canadian Wheat Board said it will make it more difficult to move grain efficiently from prairie to port.
The marketing agency said it’s not in the interest of the railway, shippers or farmers to “push” to port grain that is not immediately required to load vessels.
“The new system forces us to guess at our rail car orders, risking the wrong grain moving to port at the wrong times,” said Ward Weisensel, the board’s chief operating officer.
That could result in port congestion at port terminals, millions of dollars in shipping penalties borne by farmers, and damage to Canada’s reputation as a reliable supplier.
In its response to the complaint, CN insists the new system is designed to “improve the reliability and quality” of service provided to CN’s shippers.
The railway says it consulted with grain shippers over the two months before the introduction of the new system, and made adjustments to the new plan based on feedback from those meetings.
In its brief to the CTA, the railway said it’s crucial for the carrier to know in advance where empty cars are to be placed.
“An expression of demand for service to a destination alone is incomplete and incapable of being fulfilled,” it said, in asking for the complaint to be dismissed. “A true demand for service must include the origin.”
The complainants told the CTA they believe CN initiated the new system to avoid implementing a number of directives issued by the agency in an earlier service complaint. CN denied that is the case.
In July 2007 the agency upheld a service complaint against CN filed by Great Northern Grain of Nampa, Alta., supported by a number of other shippers and the CWB, and ordered CN to make changes to its car shipping and allocation program.
The railway did make changes, but the shippers filed a second complaint in September 2007 saying the new rules still left small shippers at a disadvantage.
In January the agency upheld the portion of the complaint covering 2006-07 and said it would rule on 2007-08 after gathering more information on rail service from August 2007 and April 2008.
In its brief, the CWB said the introduction of a new system in the middle of the crop year is an attempt by CN to make it difficult for the agency to determine whether the previous service complaint for 2007-08 should be upheld, an allegation denied by CN.
