Canadian agency says CN violated service obligations to customers

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SEATTLE — A Canadian transportation regulator says Canadian National violated its obligation to serve customers by imposing limitations on shipments of wood pulp last year because of congestion on the rail network as western railroads worked to move grain harvests to ports.

In a statement issued Tuesday, April 16, the Canadian Transportation Agency cleared Canadian Pacific and BNSF Railway of the same charge.

The transportation agency, described as “an independent, quasi-judicial tribunal and regulator,” said CN announced its intention to impose wood-pulp shipments in September 2018, “several months before rail congestion and other challenges emerged in the Vancouver area,” and imposed those embargoes in December 2018 “rather than making every reasonable effort to deal with those challenges before unilaterally restricting the transportation of the shippers' traffic.”

The agency announced its intention to investigate in January “based on information received from shipper associations and other parties.”

The agency ordered CN “to develop and submit a plan to respond to future traffic surges in the Vancouver area and to avoid, or minimize, the use of embargoes. The determination also sets out criteria for the lawful use of embargoes, including that they be imposed only on an exceptional basis, be targeted to address specific challenges, and be lifted as soon as possible.”

CN issued a statement that it disagreed with the finding and plans to appeal.

“The sole breach identified by the agency related to CN's September 2018 announcement of its intention to regulate the flow of traffic of wood pulp shipments in Vancouver during December 2018 for the purposes of avoiding congestion,” the company said. “CN maintains that this was an appropriate and necessary measure in the circumstances."

At issue, it added, was congestion at CN’s Thornton Yard, along the Fraser River just east of Vancouver.

“The agency also concluded that CN's regulated flow of traffic at Thornton Yard was justified in the circumstances, as the traffic increases and congestion issues which prompted the embargoes were beyond CN's control,” the railroad noted. “The agency recognized CN’s efforts during the fall of 2018 to reduce congestion through the deployment of extra crews and locomotive power.”

Interestingly, at the time the investigation was announced it was the Canadian Pacific, not the CN, that most publicly raised objections. In a statement released in mid-January, CP President and CEO Keith Creel said he took “great exception to having our company included in a formal investigation into rail service in the Lower Mainland. We have not been made aware of any formal complaints to the CTA relating to our service in Vancouver, nor has the CTA been in touch with us prior to launching this investigation. It is irresponsible to institute an investigation without at minimum reaching out to ask CP for information.”

Creel said at the time CP had taken steps, including embargoes, to avoid congestion snarls in the Vancouver area. It announced in November 2018 that in October it had broken its previous record for carloads of Western Canadian grain and grain products shipped to the Port of Vancouver in a single month.

“CP worked closely with CN in Vancouver, including by assembling blocks of cars for the CN to simplify last mile operations, help ease congestion, and expedite recovery,” Creel’s statement said. “To further support recovery, CP implemented embargos and permits to help manage traffic into congested consignees.”

The CTA says its core mandates are “helping to keep the national transportation system running efficiently and smoothly, protecting the fundamental right of persons with disabilities to accessible transportation services, and providing consumer protection for air passengers.”

The agency said it launched its investigation after receiving the approval of Canada’s minister of transport.

NEWSWIRETrains News Wire

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