CALGARY, Alberta May 28 Canadian National
Railway Co, Canada's largest rail carrier, said on
Wednesday it is exceeding grain-shipment levels mandated earlier
this year by the Canadian government despite a record crop that
has squeezed available transportation and infrastructure.
The company said in a statement that May hopper-car
deliveries to Western Canadian elevators are expected to average
5,500 per week, or 50 percent above the eight-year average and
38 percent higher than the prior record for the month.
Delays in moving the record 76-million-tonne crop have
angered farmers and sparked a government order in March
demanding the railways ramp up grain shipments or face
penalties. But the company argues that it is moving grain at a
record pace and the new rules are unnecessary.
"We have done exactly what we promised, without the need for
regulatory intervention," Claude Mongeau, the company's chief
executive, said in a statement. "In fact, the strength of our
grain transportation performance is unprecedented ... Crop
year-to-date, CN's grain volumes are 4 percent better than its
previous best and 13 percent above average performance."
Mongeau said that the company's performance would have been
even better, but said grain companies did not use available rail
capacity in late August and early September when the massive
size of the crop became clear.
The company said it is looking to move up to 6,000 hopper
cars of grain per week over the summer, in part by redeploying
some U.S. hopper cars to Western Canada for the next three
"With solid supply chain collaboration, we expect to see a
crop carry-over of grain in the range of 18 million tonnes,
which would be only about six million tonnes above the average
despite a massive 100-year crop," Mongeau said.
A government order requires CN and Canadian Pacific Railway
Ltd, Canada's second-biggest railroad, to each move
500,000 tonnes of grain per week.
Meanwhile, legislation from Canada's Conservative government
making its way through the House of Commons will give it the
authority to set minimum weekly levels of grain shipment in the
coming years. The bill follows a government order on March 7
that required the railways to move a combined 1 million tonnes
of grain each week on up to 11,000 cars.
CN shares were up 28 Canadian cents to C$65.38 in
midafternoon trading on the Toronto Stock Exchange.
(Reporting by Scott Haggett and Susan Taylor, editing by G