SASKATOON, Sask. — Naber Seed and Grain of Melfort says rail-car rationing has cost it business, but CN Rail says the practice has been healthy for the intricately balanced grain transportation system, the Saskatoon StarPhoenix reports.
Rationing and allocating a limited number of rail cars ensures fairness for companies like Naber Seed, said a Canadian National Railway policy manager who testified Friday before a Canadian Transportation Agency tribunal.
When the forecast demand for rail cars exceeds the number of cars that can be unloaded at port on time, the railway must hold off on filling every single order to prevent a more troublesome backlog, said Hedley Auld.
Rationing and allocation of cars then comes into play, said Auld, a manager with the grain marketing business unit in Winnipeg.
Naber Seed, a Melfort-based seed processing company, has filed three complaints since 1998 over a perceived failure on CN Rail’s part to deliver enough rail cars to plants in Melfort and Star City, and Kathryn, Alta. Naber Seed has asked the agency tribunal to consider giving running rights to Hudson Bay Railway Co. to service its plants instead of CN Rail.
Naber officials have told the tribunal that the railway delivered only 64 per cent of requested rail cars between Nov. 26, 2000 and April 22, 2001 — the 20-week period that forms the basis of the most recent complaint.
Auld explained that throughout the history of the grain transportation system in Western Canada, regulations and policies — including rationing — have been developed to ensure backlogs and disruption are avoided. Simply adding more cars to meet the need will disrupt the system as a whole, he said.
According to statistics compiled by CN, 679 of the 1,657 orders for cars placed to CN between April 2001 and January 2002 were later cancelled or changed by Naber Seed. When CN compared how many cars can be slotted at Naber Seed’s plants and how many were delivered, the railway estimates it delivered about 98 per cent.
The railway and Naber Seed forged their relationship in 1996 when the seed company opened a new processing plant near Melfort with some financial help from CN Rail. As the company and its business with CN grew, Naber became increasingly unhappy with its rail service and began filing complaints with the Canadian Transportation Agency.