A coalition of inland terminals and smaller grain companies has filed a service complaint against Canadian National Railway.
It is asking the Canadian Transportation Agency to force CN to change its allocation policy, which coalition members say favours larger shippers with the ability to spot 100 cars at a time.
The complaint filed March 8 demands that “the rationing process utilized by CN be fair, fully transparent and not discriminatory” and that the railway make available a fleet of grain cars that allows it to meet service obligations to Great Northern Grain in Alberta’s Peace River area and other small grain companies.
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At the core of the complaint, which is led by GNG of Nampa, Alta., and supported by the Canadian Wheat Board, is a decision by CN this crop year to give preference to larger shippers willing to advance book 100-car shipments per week to the same port for up to 42 weeks.
“It is a question of efficiency,” said CN communications official Jim Feeny. “We use the 100-car facilities to maximize the flow of grain. Smaller shippers still can get cars but it’s fair to say that when people have invested in infrastructure to create efficiency, there is a reward.”
The coalition, whose members have applied for intervenor status with the transport agency, include Great Sandhills Terminal, Northeast Terminal, Northwest Terminal, Parrish and Heimbecker, Paterson Grain, Prairie West Terminal, Providence Grain Group, Southwest Terminal and Weyburn Inland Terminal, as well as the wheat board.
Western Canadian Wheat Growers Association, although not a commercial enterprise able to ask for intervenor status, said last week it supports the complaint.
While efficiencies created by 100-car blocks can help the system, it does not work for all shippers, president Cherilyn Jolly-Nagel said.
“It is important that all grain companies have access to rail service that meets their needs and the needs of their customers.”
A win by GNG will increase competition and flexibility in the system, she said.
The main complainant will be helped with costs by all the interveners.
“This crop year, without any warning, CN made a change that may put an end to small grain shippers,” Bruce Horner, chief executive officer of Great Northern Grain told a March 8 news conference in Ottawa.
“This change will prevent companies like ours from getting enough rail cars to stay economically viable and if it isn’t stopped, it will leave only very large players to ship and handle grain out West. We intend to stop it.”
Sites that cannot accommodate CN’s new 100-car rule, or for whom it is not a good business plan, must spend more money to bid on smaller car allotments that are a secondary priority for the railway.
Ward Weisensel, the wheat board’s chief operating officer, told the Ottawa news conference that the board supports the level-of-service complaint because CN’s change has reduced flexibility in getting grain to ports where it is needed, leaves ships waiting and will cost farmers money in demurrage.
“CN is unilaterally and fundamentally shifting the economics of large and small grain companies with the change it has made to its advance products program,” he said. “This shift is a dangerous one for the grain industry of Western Canada.”
Rob Davies of Weyburn Inland Terminal told the Parliament Hill news conference his terminal is big enough to handle 100-car allotments and is served by Canadian Pacific Railway but he supports the application because the CN rule is not practical.
He said there is a fear CP may feel obligated for competitive reasons to follow CN’s lead.
At the transport agency, communications official Marc Comeau said it has a 120 day deadline for decisions if both sides do not agree on an extension.
He noted that the grain coalition said it wants a fast resolution of the complaint.
One of the demands is that CN be forced to make at least 50 percent of its car fleet available to shippers through general distribution that does not involve long-term commitments in advance bookings.
