Shippers frustrated by inadequate rail service won’t likely be keen to copy an agreement struck by CP and the Canadian Wheat Board to improve grain shipments.
The agreement is short on specifics especially whether it contains any financial penalties for non-performance, said Bob Ballantyne, president of the Canadian Industrial Transportation Agency.
The railways want to avoid heavy regulation under a federal rail service policy announced prior to the May 22 election, and that’s why CP went for an agreement with the CWB that’s very much a work in progress, said Ballantyne.
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Transport Canada wants the railways and shippers to agree on a template for service agreements, he said. While the election has delayed things, it’s still hoped a proposal will be ready by late May or early June.
AGREEMENTS REACHED
Shippers are watching how well the service agreements the railways have reached with the ports and other customers work, said Ballantyne. Most participants are encouraged by improved railway service but are waiting to see how they will work over the long term.
CWB spokeswoman Maureen Fitzhenry said the agreement sets out initiatives aimed at increasing capacity in the grain transportation system. Details, such as financial penalties for delays, weren’t being released to protect commercial confidentiality.
The agreement, reached March 28, said the parties will “work together to identify key performance indicators for placement and movement of the grain (car) fleet. Meeting these performance indicators will enhance productivity and increase supply-chain capacity for the movement of Canadian export wheat and barley. Over the remainder of the crop year (which ends July 31), the focus will be on joint initiatives such as bulk scheduling, improved order sequencing, and consistent reliable service from country to port.”
RECTIFYING SITUATION
Grain shipments on CP had fallen 25 per cent in the past year, said Fitzhenry. Since the agreement was reached, the railway has tried hard to rectify the situation.CN introduced a “score card” system for tracking grain movements, and the railway claims “there have been no problems this year.”
CP experienced unusually difficult conditions on its line through the Rocky Mountains this winter, with avalanches and heavy snowfalls repeatedly disrupting operations, said spokeswoman Breanne Feigel.
Grain companies that actually load the cars haven’t seen the details of the agreement and don’t know how it will affect them, said Wade Sobkowich, executive director of the Western Grain Elevator Association.
“It sounds like a high-level agreement on goals and objectives that says nothing about where the cars will be moved for loading,” he said.
“There’re a lot of plugged elevators on CP lines in Western Canada and farmers need to get the grain moving so they can start delivering again.”
LONG-STANDING COMPLAINT
Sobkowich said he is concerned the agreement might favour board grains over canola, pulse and other crops.
He said his members have been complaining to government about “how poor CPR service had been for many months.” Last fall, CP only supplied about 70 per cent of the cars grain terminals requested.
“For the months of December and January, this has dropped to approximately 50 per cent,” said Sobkowich, while on-time performance of grain trains “has averaged 40 per cent for the entire crop year, and has been as low as 10 per cent in some weeks.
“When combining both the car order acceptance level and car spotting performance, CPR has been providing less than 30 per cent of the required cars on time.”
Grain companies have tried to divert grain to terminals served by CN, which has provided better service, he noted. Delays getting grain trains loaded and moved to the West Coast or Thunder Bay means lengthy holdups for ship waiting for the product and costly demurrage payments for farmers.
“CPR service is currently at the lowest level experienced by our members in their collective memory,” Sobkowich added.
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“Itsoundslikeahigh-levelagreementon goalsandobjectivesthatsaysnothingabout wherethecarswillbemovedforloading.”
– WADE SOBKOWICH
