OTTAWA, Sept. 25 /CNW Telbec/ - The Canadian Transportation Agency ruled
today 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 has 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.
Based on the pleadings of the parties and all information submitted, the
Agency determined that a a performance benchmark should be applied as a basis
for determining whether CN is providing an adequate and reasonable level of
service. The benchmark is comprised of three components:
1. Number of rail cars requested by the shipper and confirmed for
delivery by the railway company. This provides shippers with certainty
that they will receive a reasonably high number of rail cars based on
2. Timeliness and predictability of the delivery of confirmed rail cars.
This takes into account the shippers' "want" date and the actual
delivery date of the cars and provides the shipper with the
predictability it needs for planning purposes; and
3. Recognition of factors that affect railway performance such as
weather, terminal unloads, excessive demand for rail cars in peak
periods, operational restrictions and derailments. While shippers need
a reasonable level of certainty for planning their operations, the
ability of a railway to provide a level of service may be compromised
for short periods of time by circumstances beyond its control and will
need some time to return to adequate and reasonable service levels.
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 percent of the grain shippers' requested rail
- deliver 90 percent 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 rails cars on a predictable
basis, unless CN is able to demonstrate that exceptional circumstances prevent
it from doing so. The performance benchmark specifies a required outcome but
the Agency will leave the means of achieving this outcome to CN's discretion,"
states the Decision.
This performance-based approach builds on previous Agency Decisions
dealing with breaches of level of service obligations, namely "Great Northern
Grain Terminals Ltd. vs CN" (Decision No. 344-R-2007, July 6, 2007 ) as well
as in its January 18, 2008 conditional rulings on these six complaints.
While the Agency has found that a performance-based benchmark provides a
sound basis for determining if a shipper is receiving adequate and reasonable
service, the benchmark established in this Decision is based on the
circumstances and factors relating to the six complaints. Therefore, the
remedy ordered is applicable only to the four named shippers.
The Agency encourages railway companies and grain shippers to enter into
a dialogue with the goal of setting performance-based standard levels which
would benefit the Western grain industry as a whole, and is prepared to assist
in facilitating such a dialogue should the parties find this helpful.
The Canadian Transportation Agency is a quasi-judicial tribunal which
acts like a court and is responsible for helping achieve an accessible and
efficient transportation system. Its decision-making process is governed by
the rules of fairness and natural justice. The Agency deals with, among other
things, rate and service complaints arising in the rail industry; disputes
between railway companies and other parties; 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.
Copies of the Decision can be obtained by contacting the Canadian
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