Canadian Manufacturing

CN, CP fined combined $150K in 2014 over grain shipments

CP disputing its $50,000 fine on basis grain shipment shortfall was result of matters beyond its control

MONTREAL—Canada’s two largest railways were fined a total of $150,000 for failing to transport the minimum required grain volumes last year, Transport Minister Lisa Raitt said.

Canadian National Railway Co. (CN) will pay $100,000 for violations under the Fair Rail for Grain Farmers Act related to shipments for the weeks of July 28 and Sept. 7.

However, Canadian Pacific Railway Ltd. (CP), which was assessed a $50,000 penalty for the week of Sept. 7, is disputing the fine on the basis that the shortfall was a result of matters beyond its control.

The missed targets were the result of “broader supply chain issues, specifically the Labour Day holiday shutdown at the Port of Vancouver the week before,” it said in an emailed statement.

“These events outside of CP’s control in the supply chain contributed to delays in the movement, loading and shipping of railcars on CP,” the company said.

Transport Canada said it continues to review the remaining fall data on grain volumes to ensure the railways adhered to the volume requirements.

The department said it would fine the railways as much as $100,000 per week at the minister’s discretion.

It issued notices of violation Dec. 12.

Montreal-based CN said it would be paying the lower $50,000 per week administrative monetary penalty.

“CN is heartened that the Transport Canada enforcement officer’s investigation appropriately took into account factors beyond CN’s control and also reflected the important role that others play in the grain supply chain,” spokesperson Mark Hallman said.

He said the railway continues to move record grain shipments from the 2014-15 crop year.

By the end of 2014, it had 1,500 orders on its wait list, the equivalent of about three days of shipments.

“To date, CN has exceeded its government-mandated minimum grain volumes by more than 1.5 million metric tonnes,” CN said.

The railway said its grain volumes are subject to market demand, corridor constraints and the performance of other supply chain partners such as grain elevator companies.

CP said it has stressed and will continue to stress that the Canadian grain supply chain must operate on a 24/7 basis to support balanced pipelines, reduce congestion and drive velocity.

It noted that in 2014 it moved record amounts of grain that were 21 per cent above the three-year average and up 16 per cent over the previous record crop year of 2008-09.

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