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Hopper, tanker and intermodal railcars sit on Canadian Pacific tracks along the waterfront of Vancouver. (File Photo).Bayne Stanley/The Canadian Press

It was billed as an investigation into possible rail-service problems at Canada’s most important port, the first hearing of its kind held by the Canadian Transportation Agency. Instead, representatives of Canada’s two major railways tried to turn the tables on the regulator, mounting defences of their service to shippers at the Vancouver port and questioning the need for government scrutiny and a public airing of customer complaints over two days at a downtown hotel on Tuesday.

The Canadian Transportation Agency launched the investigation after complaints of poor service by shippers that rely on railways to reach the port of Vancouver and overseas buyers. The groups, representing shippers of forest products, potash and crops, say the railways are giving priority to certain commodities while halting their rail cars, forcing them to incur charges for idle ships and rail cars and unfilled contracts.

The port of Vancouver is Canada’s busiest, moving 142 million tonnes of grain, consumer goods and other products in 2017, and is a key gateway to Asian markets.

The hearing called by the quasi-judicial regulator of the air travel, marine and rail industries is scheduled for Tuesday and Wednesday. The CTA has the power to issue orders against industry members to ensure the transportation system works in the interest of customers, businesses and people who rely on it.

Representatives of the three major railways that serve the port, BNSF, Canadian National Railway Co. and Canadian Pacific Railway Ltd., took turns defending their respective company’s performance on Tuesday.

Any slowdown in freight movement was brief, beyond our control and temporary, was their message. In any case, BNSF and CP said the slowdown stemmed from congestion at the CN freight yard.

“I wish to reiterate CP’s concern as to the lack of foundation, evidentiary or otherwise, on which this investigation has been initiated,” said Cassandra Quach, counsel for CP. “We are unaware of any accusations … that we have not fulfilled our service obligations … in the Vancouver area.”

Fiona Murray, vice-president of public and government affairs for CN, told the CTA panel that November and December’s 10-per-cent rise in rail traffic in the Vancouver area created congestion that, if not controlled through restrictions on train movement, could have rippled across the wider Canadian and U.S. supply chains.

She called the suggestion the railway discriminates against certain commodities “incorrect,” and demonstrates a misunderstanding of “how and why” railways manage traffic under “exceptional circumstances.”

“Our operations in the Vancouver area are fluid … . Please note that I did not say perfect,” said Ms. Murray, who called criticism of the port’s operations “irresponsible and potentially damaging” to Canada’s international reputation as a reliable trading partner.

Generally, CN operates trains to the port’s north shore, while CP serves the south; the carriers interchange or swap trains, locomotives and crews to keep rail traffic moving smoothly. For this reason, congestion at CN’s yard cascaded through the region and caused CP traffic to slow.

Greg Squires, a CP manager, said CP restricted or halted some freight operations near the port three times in December due to congestion on CN lines, to avoid seeing customers’ freight “trapped” in clogged rail yards.

The CTA panel is scheduled to hear testimony from groups representing railway customers, terminal operators and the port of Vancouver.

As the hearing’s first day wound down, CN reported financial results after markets closed.

For the three months ended Dec. 31, CN said profit fell by 55 per cent to $1.14-billion, or $1.56 a share, from the fourth quarter of 2017, a period in which the company received a U.S. tax break. Revenue rose by 16 per cent to $3.8-billion. On an adjusted basis, CN’s per-share profit rose by 24 per cent to $1.49 a share, or $1.1-billion. Analysts expected per-share profit of $1.47.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 24/05/24 4:00pm EDT.

SymbolName% changeLast
CNR-T
Canadian National Railway Co.
-0.08%173.35
CP-T
Canadian Pacific Kansas City Ltd
+0.17%109.15

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