(Adds comment from CN)
By Rod Nickel
May 5 The Canadian unit of global grain trader
Louis Dreyfus Corp has filed a complaint with the
Canadian government about service from the country's biggest
railway, Canadian National Railway Co, following a
record-breaking harvest that has led to transportation
Louis Dreyfus Commodities, which operates a canola-crushing
plant at Yorkton, Saskatchewan, and 10 country elevators in
Western Canada, filed a complaint on April 16, the Canadian
Transportation Agency said on Monday.
The agency said Dreyfus complained about CN's service based
on a contract between the two companies. The grain handler has
also requested that the agency issue an interim order requiring
CN to abide by contractual terms during the proceedings.
The complaint, while not the first of its kind, highlights
the unusually fierce animosity between grain handlers and
railways during the winter with mounting pressure from farmers
and politicians to unplug an unprecedented backlog that stranded
up to C$20 billion ($18.2 billion) worth of crops.
Huge crops of wheat and canola, combined with a frigid
winter caused CN and rival Canadian Pacific Railway Ltd
to fall behind on filling requests for grain hopper cars to
country elevators. This caused grains and oilseeds to pile up in
commercial and farm storage, including the largest wheat stocks
in 20 years as of March 31.
The complaint was filed under the Canada Transportation Act.
Under provisions of the act, if the CTA determines a railway is
not meeting its contractual obligations, it can order it to meet
them within a set time period.
Canadian National spokesman Mark Hallman said the record
harvest has created demand for rail service that exceeds the
capacity of the supply chain. CN has attempted to allocate rail
cars among shippers fairly and consistently, he said.
"To the extent any shipper is afforded preference, by law or
otherwise, this will necessarily be at the expense of the rest
of the industry," Hallman said. "CN will keep customers
informed of any adverse impact this complaint could have on
Brant Randles, president of Louis Dreyfus Commodities, said
the company does not comment on pending legal proceedings.
(Reporting by Rod Nickel in Winnipeg, Manitoba and Gus Trompiz
in Paris, editing by G Crosse)