CN sues Richardson to stop grain movement south to US...

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CN sues Richardson to stop grain movement south to US...

Mar 7, 2014 | 10:46 1 Someone needs to be taken out to the woodshed!

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CN Sues Rail Regulator
Blacklocks

Canadian National Rail is suing a federal regulator and
the nation’s largest agri-business in a dispute over
switching grain cars.

CN lawyers declined comment on their Federal Court
appeal claiming a right under a 1912 contract to
refuse to ship competitors’ cars in Manitoba. The suit
comes amid unrelated complaints of inadequate rail
service, including claims by Agriculture Minister Gerry
Ritz that the economy has been “held hostage by this
poor service”.

Richardson International Ltd. of Winnipeg last May 29
contracted a rival railway, Burlington Northern & Santa
Fe Manitoba Inc., to forward a hundred empty grain
cars along a CN track to a Richardson elevator in
Letellier, Man. Under the Canadian Transportation Act
railways are required to pick up and hand off cars to
competitors even on their own track, in a system called
“interswitching”.

However Canadian National refused, citing a 1912
contract that prohibits Burlington’s predecessor
company Midland Rail Co. of doing “local business”
along CN track in Manitoba: “In the more than 100
years since the 1912 agreement was entered into,
neither Midland nor Burlington Northern & Santa Fe
transacted local business on the CN line under the
auspices of the 1912 agreement.”

The Transportation Agency earlier ruled that CN
misinterpreted the pre-WWI agreement and that the
railway had to interswitch the grain cars from
Richardson’s elevator 90 kilometres south to the U.S.
border.

Canadian National sued both the agency and
Richardson to overturn the judgment. A CN official told
Blacklock’s the railway will continue to switch cars as
ordered by the earlier ruling pending an outcome of its
appeal.

Both CN and Canadian Pacific Rail have been
condemned by legislators for late delivery of cars
resulting in delayed export shipments. “We are losing
customers,” MP LaVar Payne (Conservative-Medicine
Hat, Alta.) told reporters. “Certainly the railways have a
monopoly, and quite frankly, I have seen over the years
it doesn’t matter what the railway – they’re not
providing the service.”

“It’s really terrible,” Payne continued. “Their service has
been lousy, quite frankly. And in my riding of course
the CPR is there, and so I don’t really have a lot of
good warm feelings towards the CPR because I don’t
think that they’ve been doing the job that they should
be doing.”

Conservative MP Ed Komarnicki (Souris-Moose Mtn.,
Sask.) said government action appeared necessary to
improve rail service: “We need to do everything we can
in the short term, but also obviously need some long-
term direction as well.”

Parliament last year passed Bill C-52 the Fair Rail
Freight Service Act that allowed commercial shippers
to request contracted terms of service from railways
with resort to binding arbitration and $100,000 fines
for non-compliance. Shippers had criticized C-52 as
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