CTA levels breach of service against CN Rail; clears CP and BNSF

Early in 2019, the Canadian Transportation Agency (CTA) started an investigation around freight rail service levels in the Vancouver area. At the time, there was speculation as to which industry or industries had made the level of service complaint, and what commodities were all involved. The service complaint is the first test of new transportation legislation passed last fall.

This week, the CTA announced Canadian National Railway Company (CN) breached its level of service obligations by announcing its intention to impose embargoes on wood pulp shipments, several months before rail congestion and other challenges emerged in the Vancouver area.

According to a news release, the breach of service stems from imposing movement embargoes in December, 2018, rather than making “every reasonable effort to deal with those challenges” before restricting the transportation of the shippers’ traffic.

“Freight rail service is essential to manufacturers, farmers, importers, shippers, and the Canadian economy. Through this investigation, the CTA was able to quickly look into possible issues with rail service in the Vancouver area that were brought to its attention in late 2018 and early 2019. The determination provides all parties will greater clarity on when rail service embargoes are, and are not, lawful,” says Scott Streiner, chair and CEO of the CTA.

CN has been ordered by the CTA 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 CTA also made sure the rail company knows the 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.

Canadian Pacific Railway Company (CP) and BNSF Railway Company (BNSF), the two other railway companies investigated during the level of service complaint, were cleared of any wrong-doing.

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