Canadian Pacific to review pricing for grain hoppers in light of court decision
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Hey there, time traveller!
This article was published 29/10/2008 (6220 days ago), so information in it may no longer be current.
CALGARY – Canadian Pacific Railway Ltd. (TSX:CP) says it will review its products and pricing after losing an appeal of a February regulatory decision on the company’s grain hopper car maintenance revenues.
The Federal Court of Appeal recently upheld a Canadian Transportation Agency order adjusting the railway’s maximum revenue entitlement for grain shipments, retroactive to August 2007.
In criticizing the CTA decision in February, Canadian Pacific said at the time it would translate to a $2.59 per tonne impact on its revenue.
The company said Tuesday that the appeal decision will result in a decrease of $23 million to what CP says it was entitled to earn for grain shipments for part of the 2007-2008 crop year.
“CP will review the court’s decision and available legal recourse,” the railway said in a statement.
“CP will review its products and pricing as it relates to this decision and will communicate this to customers in the near future.”
Canadian National Railway Co. (TSX:CNR) estimated the CTA decision will reduce its Canadian grain revenues by $23 million for the 2007-08 grain crop year and prompt a careful review its future investments in grain-related equipment and infrastructure
“The ruling transforms a business now generating slightly below average profits into CN’s least-profitable commodity group,” the company said.
“It is especially frustrating to CN that the rate reduction is retroactive: rates that were set in the spring of 2008 are to be applied to grain that moved in August of 2007.”