The Canadian Transportation Agency has ruled on complaints received from six shippers that the Canadian National Railway Company (CN) was not meeting its obligations under the "Canada Transportation Act" to provide an adequate and reasonable (suitable) level of service for the movement of Western grain for crop year 2007-08.
The Agency found that CN has not breached its level of service obligations to the Canadian Wheat Board and Providence Grain Group Inc.
However, the Agency found that CN had failed to provide an adequate and reasonable level of service to North East Terminal Ltd., Paterson Grain, Parrish and Heimbecker Limited, and North West Terminal Ltd during the year ended 31 July 2008.
The CTA said that a a performance benchmark should be applied as a basis for determining whether CN is providing an adequate and reasonable level of service.
To remedy the situation for North East Terminal Ltd., Paterson Grain, Parrish and Heimbecker Limited, and North West Terminal Ltd. for crop years 2008-2009 and beyond, the Decision orders CN to provide a level of service to these four shippers as set out in the performance benchmark.
Effective immediately, CN must:
confirm a minimum of 80% of the grain shippers' requested rail cars;
deliver 90% of these confirmed cars on time or in the subsequent two weeks; and
meet these performance standards on a 12-week rolling average throughout each crop year.
CN is still obligated to deliver all remaining confirmed rail cars.
"The purpose of this new performance benchmark is to ensure that CN delivers an adequate and reasonable number of rail cars on a predictable basis, unless CN is able to demonstrate that exceptional circumstances prevent it from doing so," the CTA said in its decisions.
Rail service is a long-standing issue for Canada's grain industry, which relies on two national carriers to ship grain from the Prairies, one of the world's largest exporting regions, to ports more than 1,000 km (600 miles) away.
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