Canadian National Railway Gets First Fine for Not Moving Enough Grain
Canadian National Railway is being fined by the federal government under the Fair Rail for Grain Farmers Act for failing to move a minimum amount of grain each week (Globe and Mail). The monetary penalty, which has yet to be determined but can be up to $100,000 a week, is the first to be charged under the federal legislation which was passed in the spring to address grain farmers’ complaints that Canada’s two major railways were providing poor service, resulting in significant financial losses to farmers. Grain farmers were also claiming, at the same time, that CN and CP were dedicating too much of their efforts to hauling crude oil and other petroleum products, at the expense of the grain industry.
Canada’s Agriculture Minister Gerry Ritz said he was “concerned” CN was not meeting the minimum volume requirements. He said, “Using all means available, our government will continue to defend farmers and all shippers to ensure that our economy is well served by Canada’s rail logistics system.” A Ministry of Transport spokesperson said, “As CN was not able to meet the minimum volume requirements, the Minister has decided to issue administrative monetary penalties to the company.”
In addition to the grain-specific legislation passed this spring, the federal government passed the Fair Rail Freight Service Act last year to help level the playing field for shippers who had been complaining for years that they were more-or-less at the mercy of CN and CP when it came to shipping prices and quality of shipping service. Shippers were concerned, among other issues, about delivery times, standard of freight cars, and recourse when the two rail giants did not live up to their end of service arrangements.
Some shippers and rail analysts have suggested that the quality of service provided by CN has been decreasing since it was privatized in 1995, as the company has been focusing too much on the bottom line and its stock ratings.