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Canadian Transportation Agency orders CN to meet service obligations for four grain shippers


The Canadian Transportation Agency (CTA) recently determined that Canadian National Railway Co. did not meet obligations under the Canada Transportation Act to provide an "adequate and reasonable level of service" for the movement of western grain in crop year 2007-08 for four shippers: North East Terminal Ltd., Paterson Grain, Parrish and Heimbecker Ltd., and North West Terminal Ltd.

The agency also ruled that CN did not breach its service obligations to the Canadian Wheat Board and Providence Grain Group Inc., two shippers that were part of a service complaint against CN along with the four previously mentioned shippers.

The CTA based its decision on a three-pronged benchmark comprising the number of rail cars requested by the shipper and confirmed for delivery by CN; the timeliness and predictability of car deliveries; and several factors that affect railway performance, such as weather, terminal unloads, excessive car demand in peak periods, operational restrictions and derailments.

The agency ordered CN to confirm a minimum of 80 percent of grain shippers' requested cars, deliver 90 percent of confirmed cars on time or in the subsequent two weeks, and meet performance standards on a 12-week rolling average throughout each crop year. CN remains obligated to deliver all remaining confirmed cars.

"The purpose of this new performance benchmark is to ensure that CN delivers an adequate and reasonable number of rails cars on a predictable basis, unless CN is able to demonstrate that exceptional circumstances prevent it from doing so," CTA officials stated in their decision. "The performance benchmark specifies a required outcome, but the agency will leave the means of achieving this outcome to CN's discretion."

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More News from 9/26/2008