CP Rail’s grain-shipping service has never been worse in living memory, according to the Western Grain Elevator Association (WGEA), prompting it to renew calls for federal legislation to improve it.
“We expected the upcoming release of the Rail Service Report to result in improved service by the railways in an attempt to counter the serious performance concerns uncovered by the review panel,” WGEA executive director Wade Sobkowich said in a news release Feb. 28. “However, this is not the case. Since August 1, 2010, cars required versus car orders accepted by CP, on a weekly basis, have averaged only 65 per cent.”
When combining both the car order acceptance level and car spotting performance, CP has provided less than 30 per cent of the required cars on time, the WGEA says.
“CP service is currently at the lowest level experienced by WGEA members in their collective memory and clearly underscores the need for legislative change,” the WGEA release states.
The WGEA represents most of Western Canada’s main grain companies, which collectively handle 90 per cent of the West’s bulk grain exports. WGEA members pay the railways almost $1 billion a year to transport grain, accounting for 20 per cent of railway revenue.
The WGEA says Canada’s railways need to be regulated because there isn’t enough competition between them to allow market forces to encourage consistent grain-shipping service. The amendments to the Canada Transportation Act the WGEA wants would set a base expectation for rail service and meaningful penalties to be paid to shippers when service is inadequate.
“A sustainable system of meaningful performance measurements and related penalties that improve service for all players in the system is required,” Sobkowich said. “A sustainable solution of this nature cannot be negotiated on a commercial basis in the absence of underlying legislation, given the imbalance in negotiating power between shippers and railways.
“If the railways are genuine in their intent to provide adequate service, then the legislative provisions we are proposing will never be used. They would only come into effect if the railway fails to perform.”
CP Rail’s quarterly report released in January shows an increase in service to all sectors except grain, the WGEA said.
CP booked 17.5 per cent fewer grain cars in this 12-week period of 2010 than in the same quarter in 2009 – the equivalent of 8,626. Assuming the average value of the grain that didn’t move was $350 a tonne, in total $272 million worth of farmers’ grain didn’t get shipped, the WGEA said.
A response from CP Railways was not available at press time. [email protected]
“CPserviceiscurrently atthelowestlevel experiencedby WGEAmembers intheircollective memoryandclearly underscorestheneed forlegislativechange.”