CN found in breach of service to 4 grain shippers

Thu Sep 25, 2008 2:40pm EDT
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WINNIPEG, Manitoba (Reuters) - Canadian National Railway, Canada's largest railway, failed to provide adequate service to four small grain shippers last year, the Canadian Transportation Agency said on Thursday.

The transportation regulator said the railway breached its service obligations to Paterson Grain, Parrish and Heimbecker Ltd, North East Terminal Ltd and North West Terminal Ltd for the year ended July 31, 2008.

The CTA said CN Rail would have to meet prescribed performance standards for the four shippers.

"The purpose of this new performance benchmark is to ensure that CN delivers an adequate and reasonable number of rail cars on a predictable basis, unless CN is able to demonstrate that exceptional circumstances prevent it from doing so," the CTA said in its decisions.

But the agency said the railway did not breach its obligations to the Canadian Wheat Board and Providence Grain Group Inc, which had also complained about rail service.

Rail service is a long-standing issue for Canada's grain industry, which relies on two national carriers to ship grain from the Prairies, one of the world's largest exporting regions, to ports more than 1,000 km (600 miles) away.

Canadian law compels CN and Canadian Pacific Railway to provide adequate service to shippers.

This was the second complaint in two years against CN launched by small grain shippers.

(Reporting by Roberta Rampton; Editing by Peter Galloway)