“I really do see this as a sustainable model and you’ll see more of it at CP.”
– MURRAY HAMILTON
The record pace of grain shipping the final half of the last crop year was no fluke according to Canada’s railways, even though some observers suspect the drop in other rail traffic due to the recession was a big factor.
“I really do see this as a sustainable model and you’ll see more of it at CP,” Murray Hamilton, Canadian Pacific Railway’s director of grain said in a Dec. 2 interview after speaking at the Fields on Wheels conference in Winnipeg.
A top executive at Canadian National Railway has said the same, the conference was told by Mark Hemmes president of Quorum Corporation, the firm that’s been monitoring the performance of Canada’s grain handling and transportation system for almost 10 years.
“The grain handling and transportation system in Canada is working better than it ever has before,” Hemmes told the Canada Grains Council’s grain symposium in Ottawa Nov. 25. He delivered the same message at Fields on Wheels.
“This last six months of the (2008-09) crop year movement of grain has set new records and new standards – a whole new set of benchmarks in the performance of the grain handling and transportation system, in particular how the railways have been delivering.”
It’s quite a turnaround. Over the past few years grain companies have increasingly complained about poor railway service, accusing the railways of failing to fill car orders on time. Some grain shippers have taken legal action through the Canadian Transportation Agency (CTA). Transport Canada is reviewing the railways’ performance moving all traffic.
LIKE A MACHINE
But during the last two quarters of the crop year that ended July 31, the grain transportation system was “just like a machine,” Hemmes said.
“A lot of it has to do with the fact all the other traffic dried up,” Hemmes said.
It’s rare to see West Coast grain car unloads hit 4,800 a week, but this spring more than 5,000 were unloaded weekly for 11 straight weeks, peaking one week at 5,400.
Hemmes, quoting one grain company executive, said of grain and the railways’ improved service: “It’s kinda’ nice to be the pretty girl at the dance.”
There are other signs of improvement. The total time grain stays in the pipeline dropped to 50 from 80 days.
“We’ve done some analysis that on a ballpark basis says that every time that you cut a day out of the time grain spends in the logistics system in Canada you take about $2 million a year of costs out,” Hemmes said.
The average car cycle – the time it takes to load a car, move it to port, unload it and return it to the country to be reloaded – dropped to 16 days from 20.
The number of train starts has dropped by a third because more grain is moving in longer trains.
Despite some impressive statistics, there’s still lots of room for improvement, Hemmes said. The average car cycle has improved to 16 days, but averages are deceiving. The cycle sometimes can be as long as 22 days.
“That’s why they (grain companies) get so frustrated with the service that’s provided by the railways,” Hemmes said.
Rob Davies, CEO of Weyburn Inland Terminal, said car arrivals had dropped to plus or minus four days from eight.
“It’s not great service, but it’s less bad so we’re feeling better,” he said during the grains council meeting.
Saskatchewan farmers Roy Orb and Garth Burns both said rail service is poor.
“We need better and more reliable service,” said Burns, who farms near Drake, Sask. “We pay for a service we’re not getting.”
Whether the unprecedented pace of grain shipping will continue when other traffic picks up remains to be seen, Hemmes said. He admits to being skeptical, but at the very least the railways have demonstrated what they can do, setting themselves new benchmarks.
CP’s Hamilton however, is confident. When asked if CP can keep grain moving at the current rate when other traffic picks up he replied: “Absolutely.”
Collaboration with customers has been the key to increasing grain shipments, he told the Fields on Wheels meeting. CP has gone to a “demand-pull” model for grain shipping, trying to match customer demand with CP’s operating capacity.
One important new CP innovation is called “power on.” It cut three days out of CP’s car cycle, reducing it to 12 days or even fewer sometimes.
Locomotives pick up 112 empty hopper cars at Vancouver and deliver them directly to a country elevator, where the locomotives (power) stay with the cars as they are being loaded. Crews instead of equipment are moved back and forth.
“The net effect for us in the supply chain is we were able to move 16 per cent more grain with two per cent less assets crop year over crop year,” Hamilton said.
“I can’t say enough about it. Looking at ways to deliver demand-pull has, I think, really benefited our overall capability to move grain.” [email protected]