<<Is cmdshell the way to go>>
Please try the following:
1) Verifying the credentials
> Grant explicitely to the agent service account to execute xp_cmdshell in master database
> Try to re-run as-it is
2) If the above does not nork...
> Grant the ability to the agent service account to execute xp_cmdshell in master database
> set up a proxy cmdshell with the agent service account, to do that, run...
exec sp_xp_cmdshell_proxy_account 'YOURDOMAIN\SQLAgentServiceAccount','password'
> then wrap the cmdshell file call into a stored procedure ...
> you can call the above procedure from a job step as a TSQL call as opposed to a direct cmdshell call.
hope this helps...