CN Rail: Controversy, Contradictions, and Questions

Officials on scene of another CN Rail derailment west of Edmonton, near Peers, Alberta. Photo Credit: Xm105fm, mytowntoday.ca

Controversy continues to follow CN Rail, despite its best efforts to “move on” as stated by Chief Operating Officer Jim Vena, after its recent Gainford, Alberta derailment and fire.

The visceral images of a railway resorting to a “controlled burn,” (translation: setting its own freight on fire) left many residents living along rail corridors concerned as to how a similar situation would be handled if such an event happened in their own community, where an intentional burn-off might prove a far more complex, dangerous, or simply impossible to do.

No sooner had CN extinguished the flames from  one fire that it found itself engulfed in yet another.

 CN Fudging the Records

A CBC News investigation found allegations that CN Rail has been routinely under-reporting minor derailments and misrepresented its yard efficiency measurements across both Canada and the U.S.

A whistleblower lawsuit launched by former CN employee Tim Wallender claimed, in court documents, that CN covered up derailments and cooked up statistics at its Memphis, Tennessee yard in order to bolster the railway’s efficiency ratings.

More disturbingly, CBC News found numerous other CN Rail employees, past and present, from both sides of the border who apparently corroborated Wallender’s accusations, alleging that the railway’s managers ordered minor derailments not to be reported and instructed employees to “fudge” internal company records tracking train speeds and so-called “dwell time,” meaning how long freight is parked in the rail yard.

However, CN spokesman Mark Hallman rejected the allegations stating that “the notion that CN would condone any misreporting in that context is untenable.”

Employees and Management Differ in Opinion

However, some of CN’s employees who actually work in the rail yards have expressed an opinion contrary to Hallman.

“Eureka,” said former CN yardmaster and conductor Adrian Telizyn of Fort St. John, British Columbia. Telizyn told CBC News that, when he worked for CN, it was routine practice to pull locomotives across the scanner, which time-stamps arrivals and departures, to make it appear that the train had left the yard.

“We had it drummed into our heads if trains aren’t running on time, somebody would want to know why and it could mean our jobs,” continued Telizyn. “The screen would show  the train had left my terminal on time when in fact it travelled across the scanner and stopped…and then we tied it down and locked the doors, (of the locomotives) got off.”

Telizyn explained that therefore customers tracking their freight would log onto CN’s system to find their container, which would show up as being en route to market when, in fact, it was parked just outside the yard.

A Contributing Factor To Noise and Vibration as Well?

One of the main complaints we receive here at this blog concerns is not only how long diesel locomotives are often left idling, but where they’re left idling.

If the employee assertions are correct, could this explain part of the often unfathomable reason as to why locomotives have been reported to be left idling in areas (such as just outside the yard) which thoroughly impact residents in terms of excessive noise, vibration, and fumes?

A Toronto-area CN Rail employee who spoke to CBC on the condition of anonymity for fear of losing their job stated that CN is so obsessed with dwell times that it spends “small fortunes” on taxis to pick up crews in southern Ontario that move trains short distances to park them outside of rail yards. He further claimed that employees shuttle trains back and forth between yards so that they aren’t recorded on CN computers as sitting still.

“There is no doubt that the senior management, superintendents know that this is going on. Their bonuses are based on the dwell time and the train speed,” he further alleged to CBC.

Further Internal Concerns Raised at CN

What is even more shocking was a February 2012 letter written by then-CN executive Keith Creel who wrote to mid-management expressing disappointment at “questionable reporting practices” that he viewed as being intolerable.

Mark Hallman rejected allegations that CN sanctions improper reporting, but refused to answer questions as to which terminals were misreporting dwell time, or how widespread the practice is.

Minor Derailments “Covered –Up”

CBC also reported allegations by various CN employees that CN managers ordered staff to cover up or suppress information about minor derailments, to manipulate CN’s safety statistics.

“As a member of a train crew, I would report a derailment to the train dispatcher and then everyone and their dog heard of it,” said Telizyn. Telizyn further claimed that, “more often than not, a process kicked into gear to cover it up.” The danger in all this, he pointed out, is that the wheels of a rail car can be damaged when they hit the ground, and should then be inspected.

Instead, there were lots of times where the “shotgun, shovel, and shut up,” approach was used, said Telizyn. “Just rerail the car, let the car men inspect it, get ‘er on the train and get ‘er out of here.”

A former yardmaster in Memphis, Tennessee, Toby Lehman, said employees are required to fill out a report on minor derailments inside the yard, but claims that local management would later tell them : “It didn’t happen – just fill in the report and don’t turn it in.” Lehman estimates that at least half of these types of derailments were never reported. “Now you’re dealing with safety issues, because the FRA (Federal Railroad Administration) doesn’t have accurate stats on which to make recommendations.”

CN’s Mark Hallman similarly rejected the allegations surrounding the manipulation of data from derailments.

A “Culture of Fear”

However, private investigator Derrick Snowdy, commissioned by a New York City lawyer to seek out employees who had information about CN’s derailments, accidents, and chemical spills cited a “culture of fear” amongst front-line employees who are “terrified” of losing their jobs.

Snowdy told CBC News that many minor derailments are not reported because, “for every incident that happens, investigations slow down the rails, they’re less profitable, less money in their pockets, less bonuses, less stock options. So, in reality, the reason to avoid reporting derailments is to make money.”

Snowdy claims that he has found various tricks used in rail yards in Ontario, Quebec, and British Columbia “to dramatically under-report the actual dwell times. And this skews the reported operating ratio which is a huge component in the railway’s apparent business activities.”

Snowdy has asked federal politicians and the Ontario Securities Commission to investigate, but said that no one has had “the will, let alone the authority, to take a closer look.” And a closer look indeed, is exactly what is needed to resolve the questions surrounding CN, “North America’s most efficient railway.”

Yet Another Derailment

With one controversy following another, following the CBC News story, CN prompted derailed again, this time west of Edmonton, near Peers, Alberta.

Twelve cars derailed carrying lumber; a further derailed car was loaded with sulphur dioxide but remained upright, leading CN spokesman Patrick Waldron to tell the media that “it was not leaking, there is no environmental concern.” Not this time, at least.

Wedged in the midst of escalating questions about its rail operations, CN Rail (and rival CP Rail) both posted record third-quarter profits, amidst growing controversy and crisis about the current state of rail safety. CN’s Board further approved a two-for-one common stock split for its shareholders.

Exorbitant railway profits stand in stark contrast to the unanswered questions about defects in a large number DOT-111 rail tank cars, and liability issues for resident communities in the wake of the Lac Megantic disaster.

There’s a Limit

Perhaps though, even the railway itself is finally acknowledging the limits of its own infrastructure.

Joining the lumber industry in voicing its concerns about the ability of rail to adequately handle the shipment of its freight are Canada’s grain growers.

Record grain harvests on the Prairies are straining Canada’s transportation system, leaving farmers struggling to get their crop shipped out to west coast export terminals in Vancouver and Prince Rupert. Prairie grain elevators are full, and could use about twice the number or rail cars that they are currently receiving from the railways to move their product.

“The situation this year is unprecedented,” said Wade Sobkowich, executive director of the Western Grain Elevators Association.

While CN and CP say they are working to increase their capacity to move the crop, Sobkowich said it hasn’t been enough to handle this year’s demand. Farmers are resorting to storing grain in machine sheds or on piles on the ground as the system backs up, waiting for rail cars.

If Only Grain Was Harvested Monthly…

Sobkowich notes that the railways appear to prefer consistent year-round service, rather than taking into account the more seasonal aspects of the grain growing business.

“We’re trying to take advantage of peak price periods, we’re trying to move more during harvest time and we’d like rail companies to take into account demand for rail cars in a bigger way.”

What is truly noteworthy in all this is CN’s response to the grain industry’s concerns.

CN Rail has spent $100 million over the last two years to increase the flow of freight in Western Canada and is moving “historically high” amounts of grain to shipping points, according to CN’s Jim Feeny.

Adding More Rail Cars Not the Answer

Feeny further stated that, from the railway’s perspective, providing more cars to grain shippers “is not the answer” because, much like a freeway at rush hour, putting too many cars into the system would slow it down for everyone.”

However, Sobkowich stated that the grain customers feel squeezed by the railways, which have “the unilateral ability” to shift services, depending on the demands of other customers “and their ability to pay higher freight rates.”

Would some of those “other customers” happen to include the oil industry?

If rail cannot meet today’s fluctuating seasonal requirements of the grain industry, and if adding more rail cars “is not the answer,” then how do these acknowledged limits affect the ability of rail to handle ever-increasing quantities of crude oil, or related petroleum products? Is this not an admission that the infrastructure is not in place to handle increasing amounts of crude, and that the existing rail system is already showing stress and strain?

Given these limitations, how does rail explain its rationale of being a viable option to the building of a major pipeline to the west coast? If rail capacity is already an issue, what will happen to the industries such as Canada’s grain growers or lumber producers if shipping oil strains existing rail corridors even further?

If all it takes is a bumper crop of wheat and other grains to back up Canada’s two major railways, why clog rail corridors further with more crude?

XXX

Sources for this blog post include:

CBC News Online: October 24, 2013          “CN hiding derailments, falsifying stats, employees allege”

CTV News Online: November 3, 2013        “Crews clean up following train derailment near Peers”

CBC News Online: October 23, 2013          “CN,CP report record profits amid rail scrutiny”

Vancouver Sun: October 31, 2013               “Record grain harvest clogs west coast export terminals”