A group of Prairie grain shippers including the Canadian Wheat Board and five of the Prairies’ smaller grain firms want “emergency interim relief” from federal regulators to put a stop to Canadian National’s (CN) new rail car allocation system.
The railway’s new system, which the companies said was launched Feb. 1, will throw grain handling “into disarray midway through the crop year,” the companies said in a release Tuesday after filing a new application with the Canadian Transportation Agency on the matter.
CN’s new program creates a system where grain is “pushed” from origin, instead of being “pulled” to destination, the grain shippers said Tuesday. “This prevents efficient matching of rail car supply to ocean vessel arrival, given that each ship must be loaded with the correct class, grade and protein level of wheat or barley.”
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“The new system forces us to guess at our rail car orders, risking the wrong grain moving to port
at the wrong times,” said CWB chief operating officer Ward Weisensel in the release. “This risks congesting port terminals and costing farmers millions of extra dollars in shipping penalties — not to mention the damage to Canada’s reputation as a reliable supplier of grain to its customers.”
The shippers said CN’s new system “removes accountability for the railway, as CN ultimately determines which grain elevators it will service in a particular week, without having made a firm commitment to the CWB and grain shippers regarding car supply.”
For example, the shippers wrote in their letter to the CTA Jan. 31, under the new system the CWB “will have no idea what car supply it will get from CN for week 29 (Feb. 10) until a few days before CWB is expected to ship product.”
The other five shippers are North East Terminals, Parrish and Heimbecker, Paterson Grain, Providence Grain Group and North West Terminals. The companies had recently won a Jan. 18 CTA decision that cited CN for coming up short on service in grain transportation in 2006-07. But the CTA also asked for more information to assess CN’s performance for 2007-08.
The shippers warned in their Jan. 31 letter to the agency that CN’s new policy will make it “difficult, if not impossible” for the CTA to see if CN breached its level-of-service obligations in this crop year. They claimed the railway is “intentionally mixing systems mid-stream” and its new system is in “direct violations of the (CTA’s) orders.”
The shippers said in their release that CN has filed a response “that includes many claims and conclusions that the grain shippers reject,” and that they will reply by Wednesday (Feb. 13).
CN was quoted by Reuters on Tuesday saying it was disappointed by the CWB’s announcement, saying the board had “deliberately chosen to mischaracterize CN’s car-ordering system,” the program will improve its operational planning and that the system “is not an allocation system.”
