CN and CP play favourites, shippers complain

Canada’s forestry and legume industries say the country’s two major railways gave priority to other commodities over their shipments to the Port of Vancouver late last year, costing them millions as demand surged for Canadian goods abroad.

Canadian National Railway Co. and Canadian Pacific Railway Ltd. imposed embargoes in the Vancouver area in November and December that hurt pulp and paper mills, sawmills and exporters of legumes such as dry beans and lentils, according to industry groups.

Embargoes temporarily stop or restrict traffic related to certain customers, goods or loading points and can cause missed shipments or backed-up supply chains.

Derek Nighbor, head of the Forest Products Association of Canada, warned the railways against playing “commodity whack-a-mole.”

“There were only a few commodities that seemed to be caught in the crosshairs,” he said Monday. “We need to figure out exactly why these embargoes and stoppages are happening.”

Three sets of embargoes affected forestry products in Vancouver and Squamish, and marked the second year in a row of frequent stoppages, Nighbor said. He said the lost sales, rebooked routes and additional storage cost his sector $500 million in 2018.

Last week, the Canadian Transportation Agency flexed its newly enhanced authority under the 2018 Transportation Modernization Act and launched an investigation into whether rail companies are fulfilling their obligations following industry complaints, with hearings set for next week.

In an email, CN acknowledged the recent congestion on the West Coast. It pointed to harsh weather and the intricate supply network that feeds into Canada’s busiest port.

“CN acted swiftly and efficiently to serve its customers during this period and played its role in moving record volumes through Vancouver’s complex and multi-commodity supply chain,” spokesman Jonathan Abecassis said in an email.

CP cited record grain shipments and a busier port in recent months as global trade tensions work in Canada’s favour, with a Chinese tariff on U.S. soybeans and retaliatory European tariffs on U.S. corn spurring more Canadian exports.

“It is irresponsible to institute an investigation without at minimum reaching out to ask CP for information,” CP chief executive Keith Creel said in a statement last week, complaining that the CTA did not reach to the railway ahead of the probe.

“Are we perfect 100 per cent of the time? No,” he continued.

“The flip side of that coin is: when we are subject to unsubstantiated action, I will be the first to step up and defend the men and women who make this operation run.”

Both railways have said they will co-operate with the investigation.

Some of the recent congestion owes to greater trade with the Pacific Rim and a robust economy, said Bob Ballantyne, president of the Freight Management Association.

Nonetheless, “long-standing and fairly widespread problems” affecting some bulk goods may necessitate longer-term solutions than the investigation can set in progress, including larger freight cars and more unloading facilities.

The relentless traffic could start to crowd out some commodities, some experts say.