A regulatory win by a small Saskatchewan grain company could eventually pay off for all shippers of special crops.
The Canadian Transportation Agency ruled May 29 that CN Rail failed to provide adequate and reasonable service to Naber Seed and Grain Ltd. during the peak grain shipping period last fall.
“It sends a clear signal to the railways that pulse shippers need a certain level of service and predictability in order to be able to compete,” said Garth Patterson, executive director of the Saskatchewan Pulse Growers Association.
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It also gives shippers confidence that if they aren’t happy with their rail service, remedies are available, he said.
Francois Catellier of the Canadian Special Crops Association said the ruling reflects that the industry’s rail requirements are different from those of bulk shippers of wheat or canola.
“Having a recognition of the special needs of our industry is important,” he said.
Naber, which operates shipping facilities at two locations in Saskatchewan and one in Alberta, launched the complaint last fall after receiving 67 percent of the hopper cars it ordered during the 12-week period ending Nov. 22, 2000.
While the ruling dealt with the specific facts of that situation, a spokesperson for Naber Seeds said the decision could have significant implications for the entire special crops industry.
“There was some recognition in the decision of the special transportation needs that the industry has and the unique type of shipping situations that special crop shippers are involved in,” said lawyer Tom Healey.
He said the decision will be a precedent for any shipper that encounters similar problems in the future.
CN argued that demand for grain movement during the period in question was extremely strong and cars for all shippers, including Naber Seeds, had to be rationed.
However the agency ruled that CN failed to provide legitimate justification for the reduction in service to Naber.
CN spokesperson Jim Feeny said the issue was mainly one of poor communications between the railway and Naber Seeds, adding the railway will do what is required to improve the situation.
Feeny defended CN’s record in moving special crops to market.
“In the vast majority of cases we are able to work it out with customers and keep the product moving and satisfy the expectations of all sides. In this case we were unable to.”
The railway had not decided as of May 30 whether to appeal the decision.
Catellier said discussions in recent months between the industry and railways have gone well and he expects to see improved service in the coming year.
Naber said the lack of cars last fall cost the company more than $1 million in lost revenues and extra costs, while CN argued it could not be held responsible for losses. The agency does not award financial damages. Healey declined to say if Naber will go to court to seek damages from CN.
The decision ordered CN to negotiate a mutually acceptable service arrangement with Naber and file reports to the agency every two weeks.
The agency rejected Naber’s request for an order requiring CN to provide 72 hoppers and 20 boxcars per week in the future, saying that could prevent the parties from negotiating a commercial service agreement.
The CTA ruling can be found in its entirety on the agency’s website at www.cta-otc.gc.ca, by clicking on press releases.
