Canadian Transportation Agency Orders CN to Improve Grain Shipper's Access to Rail Cars

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OTTAWA - July 6, 2007 - The Canadian Transportation Agency, in its Decision No. 344-R-2007, has found that the Canadian National Railway Company (CN) breached its statutory obligations to provide Great Northern Grain Terminals Ltd. (GNG) with adequate and suitable rail service. The complaint alleged that CN discriminated against GNG in the distribution of rail cars, rendering GNG and other small grain handling companies uncompetitive in the marketing of grain.

The Agency found that "in establishing car supply policies that have restrictive terms and conditions like minimum order durations and exclude significant segments of the shipper community, CN unilaterally becomes the arbiter of which of its captive shippers are eligible for a competitive advantage." The Decision also states that "through its virtually exclusive control of rail service in portions of the western Canadian grain market, CN creates an imbalance and, inevitably, as seen in this case, a failure in the market place."

In order to remedy this situation, the Agency ordered CN to:

  • put in place a program whereby GNG can order blocks of 50 rail cars in advance;

  • not prohibit or restrict GNG from trading cars;

  • advise GNG of the publication/methodology it uses in its determination of allocating rail cars and encouraged the railway to make this information available to other shippers on its Web site; and

  • implement the Agency's directions by the beginning of the 2007-2008 crop year, commencing August 1, 2007.

Although the Agency's jurisdictional scope in this matter was limited to GNG's service problems, the Decision acknowledged that "the systemic nature of CN's conduct has undoubtedly affected other grain shippers", and expressed the need for "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."

Sections 113 to 116 of the Canada Transportation Act stipulate that railway companies must provide an adequate and suitable level of service to shippers. A shipper may file a complaint with the Agency if it feels that a railway company is not providing such service.

The Canadian Transportation Agency is a Government of Canada administrative tribunal with quasi-judicial powers that is responsible for helping achieve an accessible and efficient transportation system. The Agency deals with rate and service complaints arising in the rail industry; disputes between railway companies and other parties on issues such as crossings and noise; applications for certificates of fitness for the proposed construction and operation of railways; approvals for railway line construction; regulated railway interswitching rates; and revenue caps for the movement of Western grain by rail. The Agency also develops costing standards and regulations, and audits railway companies' accounting and publication/statistics-generating systems.

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Marc Comeau
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(819) 953-9961

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