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Mystery trains made CN millions?

Dec. 3, 2012 at 9:21 PM   |   Comments

MONTREAL, Dec. 3 (UPI) -- Canadian National Railway made $2.6 million in 2010 moving biodiesel repeatedly back and forth over the U.S. border without unloading the tankers, records show.

The Canadian Broadcasting Corp. reported Monday it had obtained leaked documents revealing the cross-border mystery. CN Rail spokesman Mark Hallman told the broadcaster last week the carrier was just fulfilling its contractual responsibilities.

"CN received shipping directions from the customer, which, under law, it has an obligation to meet," Hallman said. "CN discharged its obligations with respect to those movements in strict compliance with its obligations as a common carrier, and was compensated accordingly."

CN employees told the CBC the tanker car movements between Port Huron, Mich., from Sarnia, Ontario, from June 15-28, 2010, were highly unusual. In all, documents indicated nearly 2,000 tanker loads were counted, the CBC said.

"In 25 years, I'd never done anything like it," said one worker who talked to CBC News on the condition he not be named. "The clerk told me it was some kind of money grab. We just did what we were told."

In one email the CBC obtained, Teresa Edwards, CN's manager of transportation for Port Huron/Sarnia, wrote the train was to move at least once daily to Port Huron, clear customs and return to Sarnia.

"If we can get in more flips back and forth we will attempt to do so," Edwards wrote. "Each move per car across the border is revenue generated for Sarnia/Port Huron.

"It will be the same cars flipping back and forth and the product will stay on the car."

The CBC said the email concludes by saying the maneuver "has the potential to make a lot of money for CN so need everyone's assistance to maximize the number of trips that we make and ensure that it all moves smooth."

HeroBX and Northern Biodiesel were listed as CN customers, but the CBC said it was unable to get responses from them, nor did Edwards return calls. Canadian and U.S. Customs officials also declined to comment on the issue.

Natural Resources Canada, which distributes $1.5 billion through its biodiesel incentive program, told the CBC it would look into the matter.

CN records show Bioversel Trading Inc., the Einer Canada company that engineered the shipping deal, is being investigated by the Canada Border Services Agency on allegations it sought to evade duties when shipping biodiesel to Romania and Italy.

Arie Mazur of Einer Canada defended Bioversel Trading's business practices and a company attorney sent an email to the CBC suggesting "a witch hunt perpetrated by our business competitors" was at play.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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