(Refiles to clarify that most, but not all, grains go directly
to terminals, in last paragraph)
* Says huge backlog would exist even under ideal conditions
* Issued embargo notice to halt lumber shipments
* Trucker strike in Vancouver causing lumber backlog
* Says embargo not impacting or related to grain shipments
By Solarina Ho
TORONTO, March 12 Canadian National Railway Co
, the country's biggest railroad operator, said on
Wednesday it will meet the federal government's order to ship
500,000 tonnes of grain a week, but its chief executive said
there would still be a severe backlog even under ideal
Last week, the Canadian government ordered the country's two
main rail companies to meet the weekly target in order to
address a shipping backlog from a record crop of wheat and
The enormous backup combined with a long and severe winter
have resulted in overdue orders for tens of thousands of grain
CN Rail CEO Claude Mongeau told investors at a conference in
New York on Wednesday that the railway still needs to move 10
million tonnes of grain for export, noting that is twice the
amount of potash it moves and as much as all its of lumber
shipments in a year.
CN has already moved a record amount of grain from early
September to early December - 22 percent more than average,
Mongeau said, beating its best peak period in history.
"We'll meet the order and go from there," Mongeau added.
Had the size of last year's harvest been known earlier,
Mongeau said grain elevator companies could have moved an
additional 10,000 car loads of grain earlier in the season to
clear inventory for storage.
"Under any scenario, even if the grain elevators had done
what they could've done, even if we had no winter, we would
still have a huge backlog," he said.
"I regret that the government has a accusative tone ... we
shouldn't be singled out to give the impression that somehow
it's a railroad problem."
The federal government's order took effect immediately and
will last for 90 days, although it can be renewed. It also gives
Canada's rail companies four weeks to ramp up deliveries.
Separately, Montreal-based CN said it placed an embargo on
rail shipments to container-stuffing facilities in Vancouver
last Sunday due to an ongoing strike by container truck drivers
at Canada's largest port.
The facilities accept railcar shipments of products - in
this case lumber - that need to be transferred into smaller
containers, which are then trucked to the port.
"We put the embargo on to avoid any further backlog building
up," said CN spokesman Jim Feeny. "We are looking for
exemptions; if they're able to handle the railcar, we'll take
The embargo only applied specifically to the Vancouver
facilities and did not affect the bulk of grain shipments, he
The government order on grain shipments was not the reason
for the embargo, Feeny added, as grains are typically shipped
directly to the terminals and most do not go through the
(Editing by G Crosse)