Cargo Business Newswire

Tuesday, February 18, 2014

Canadian National railway raises rates for older oil tank cars

Canadian National Railway is charging oil shippers more to transport crude in older tank cars, indicating that rail operators are actively avoiding the use of the type of cars involved in several tragic explosions.

The tiered fee structure for different models of tank cars comes after increased scrutiny on the safety of shipping light crudes by rail, triggered by a series of explosions including the Lac-Mégantic disaster that killed 47 people last summer, in which a runaway crude train exploded in the center of a small Quebec town.

North American railroads, shippers and regulators agree that older DOT-111s tank cars, created before higher standards were adopted in 2011, often fail during accidents, making them more likely to spill their cargo and catch fire.

"CN has structured its rates to create an economic incentive for customers to acquire, over time, more robust tank cars that meet the higher safety standard of the more recent CPC 1232 design," said Mark Hallman, spokesman for CN.

For more of the Globe and Mail story: theglobeandmail.com