OTTAWA — A federal regulator has sharply criticized Canadian National Railway Co. but stopped short of the ultimate sanction against the company — allowing someone else to use its tracks, the National Post reports.
In a potentially precedent-setting ruling released yesterday, the Canadian Transportation Agency said CN “failed to provide adequate and suitable service” to Naber Seed & Grain Co. Ltd., a specialty crop shipper in Saskatchewan, during the 2000-2001 crop year.
“CN’s grain-handling and transportation system is not geared to meet the needs of the special crop shippers but, rather, is adapted to optimize CN’s asset utilization and to meet the needs of major grain shippers,” the agency found.
While the agency imposed a strict regime of operational measures on CN and said it plans to monitor the situation for a year, it denied Naber’s request that a smaller railway, OmniTrax Canada Inc., be allowed to use CN’s lines to provide additional cars.
Such so-called “running rights” are anathema to the major railways, who claim that having other companies use their lines presents a safety hazard, decreases efficiency and will make it harder to raise capital.
As well, there is the unspoken concern smaller operators could use running rights to cherry-pick the most lucrative traffic from the major carriers.
While the federal transport act permits running rights, there has never been a successful application for them in Canada.
Mark Hallman, a spokesman for CN, said the CTA’s decision is the correct one.
“The way the agency has to deal with particular complaints is to look for specific remedies … because of the incredible implications of going to open access,” he said.
Mr. Hallman and an official at Naber both said yesterday service has improved, largely because of a new car-ordering system.
The case has been widely watched in transportation circles because it was seen as potentially precedent setting.
“It’s disappointing and unfortunate. Here was an opportunity to give an almost pilot-type, controlled, real-life test to running rights in a situation that was clearly envisaged by legislators and the agency stopped short of doing that,” said Ian May, chairman of the Western Canadian Shippers Coalition.
CN is facing a similar case involving running rights, this one an application by another railway, Ferroequus Railway Co. Ltd. of Edmonton, to use CN’s lines to haul grain from Camrose, Alta. to Prince Rupert B.C. A ruling in that case, which began in late April, is pending.