(Bloomberg News circulated the following article by Eric Torbenson on March 8.)
OTTAWA — Canadian National Railway Co. is discriminating against small grain shippers and choking off their access to railroads with new standards for minimum shipments, 11 terminals said in a complaint to regulators.
Canadian National, the nation’s largest railroad, has set the minimum train size for advance booking at 100 cars, well above the capacity smaller grain terminals can typically fill, the complaint to the Canadian Transportation Agency said.
The group, led by Great Northern Grain Terminals Ltd., a closely held processor, contends only 22 percent of grain elevators in Western Canada can fill 100-car trains.
“We’re completely dependent on the railways for our own viability,” Bruce Horner, chief executive officer for Nampa, Alberta-based Great Northern, said in a press conference in Ottawa today. “All of our hard work could be put into jeopardy by a single change from CN.”
The grain processors say they fear rival Canadian Pacific Railway Ltd. of Calgary, Alberta, the nation’s No. 2 railway, will match Canadian National’s strategy. Canadian Pacific spokesman Ed Greenberg said his railway has no plans to do that.
Canadian National hasn’t seen the complaint and can’t respond, spokesman Jim Feeny said.
‘Frustration’
“There’s been a certain amount of frustration that’s been built up among some of the smaller grain operators,” Feeny said. Poor weather and a two-week-long conductors strike last month created a grain backlog that the railway has addressed by using longer trains.
That change has made it harder for smaller grain producers to get service even as the situation improves, he said.
The group of grain terminals will jointly finance the complaint to the Transportation Agency, which enforces laws and regulations that apply to railroads such as Canadian National.
The agency has 120 days to rule on the complaint, said spokesman Marc Comeau in an interview. He said the railroad has obligations to serve facilities next to its tracks.
The agency can impose any remedies it sees fit. In a 2002 ruling, the agency ordered the railroad not to limit equipment made available to Naber Seed & Grain Co., a Saskatchewan grain- shipper that had faced rationing.
“We’re fully supportive of the action taken by Great Northern,” said Maureen Fitzhenry, a spokeswoman for the Canadian Wheat Board. “The change reduces flexibility in shipping to ports. It tends to put grain at port in ways that may not be aligned with the way vessels arrive in port.”
Shares of Canadian National rose 98 cents to C$52.43 at 4:10 p.m. on the Toronto Stock Exchange.