Nothing like an old fashioned bio-diesel mystery

This is one extremely odd story involving CN Rail

A CBC News investigation has uncovered a cross-border mystery involving unexplained shipments of biodiesel tanker cars that were sent back and forth numerous times between Canada and the U.S. by CN Rail but were never unloaded.

According to leaked internal CN documents, the rail company stood to make $2.6 million for the effort.

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

When asked whether CN wasn’t helping to do something strange, Hallman responded: “CN met its obligations as a common carrier and we have no further comment.”

And then this…

CN internal documents obtained by CBC News show that the company had agreed to flip the shipments back and forth across the border using its rail lines and tunnels 24 times without unloading any cargo. This garnered CN $2.5 million.

Each shipment generated bills of lading, customs import and export forms that suggest total biodiesel shipments of 1,984 cars — which, taken together, would be valued in the hundreds of millions.

So any theories about what is going on?

One thought on “Nothing like an old fashioned bio-diesel mystery”

  1. Commodities are often “stored en route”. A plastics maker will fill a train car with resin pellets and ship it toward a destination, without having sold the pellets to a customer. At some time, a customer will want them, and the nearest carload of pellets will be directed toward them. Typically, a company will produce pellets at a steady rate – say a carload a day. But only sell them in bunches, a few times a week. So a customer will get a shipment that is partially on the way to him. Usually the closest one. Production is normally a bit less than order rate, so all cars eventually get sold. But sometimes a lull will have a bunch of unsold cars hanging around, and the railroad usually has “default” locations to park them.

    It sounds like this was the case.

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