CP Rail moved a record amount of grain in November, beating its previous record set in October.
Meanwhile, CN Rail is gearing up its grain shipping after an eight-day strike resulted in delivering just 2,015 of the 5,409 cars elevator companies ordered for week 16 (Nov. 17 to 23) of the current crop year.
The Western Grain Elevator Association (WGEA) is generally pleased with railway grain shipping so far, notwithstanding the strike, executive director Wade Sobkowich said in an interview Dec. 3.
Why it matters: Transportation is the crucial final link to getting Prairie crops to customers and dollars into farmers’ pockets. Anything that hampers movement gets very expensive very quickly.
“The Ag Transport Coalition (ATC) numbers have shown CP’s performance as excellent,” Sobkowich said. “That’s really great that it has moved so much grain, especially during a critical month like November.”
Grain prices are usually their highest October to March so that’s when grain companies want to ship most of their grain to buyers, Sobkowich said. But it’s also the most challenging time for the railways to haul grain because cold weather forces the railways to build smaller trains and sometimes snow-slides block them.
Moreover, there’s a big crop to move, despite harvest delays this fall.
Quorum Corporation, the Edmonton-based firm hired to monitor Western Canada’s grain handling and transportation system, estimates based on Statistics Canada data this crop year’s grain supply (carry-in and production) at 83.6 million tonnes, up from last crop year’s record 81.94 million tonnes.
Even if updated statistics to be released soon show grain supplies are lower due to harvest losses, there’s still going to be a lot of grain to move in 2019-20, Sobkowich said.
“If the railways make grain service as high a priority as they did this fall then we’re looking forward to a good winter,” he added.
Since record grain supplies and shipping occurred in 2013-14 (which were surpassed last crop year), the WGEA has said bigger crops and grain supplies are the “new normal,” Sobkowich said.
“It took awhile for that to become a generally accepted thing, but we’ve had five years of large crops so it is the new normal,” he said. “It’s expected the railways are going to move that crop so it stands to reason they are going to hit new records as they do that.”
Meanwhile, grain is moving on CN lines following a strike by teamsters last month, Sobkowich said. However, it might not be until next spring or summer when grain shipping slows in response to lower world grain prices that, that lost rail shipping capacity is caught up, he said.
“We have rationed rail capacity in the winter,” Sobkowich said. “How quickly we recover really depends on how much extra CN puts on, above what it otherwise would have put on because otherwise we’re in a perpetual state of lateness and push it out until the spring or summer and that’s when we make it up. But that’s at a time when we’re not getting a premium for our grains and oilseeds. That’s the issue.”
In October CP Rail moved a monthly record of 2.66 million tonnes of grain to market. The railway broke its record last month, shipping 2.74 million tonnes.
“CP achieved great things last month for the Canadian grain supply chain in close collaboration with our trusted supply chain enablers,” Joan Hardy, CP’s vice-president of sales and marketing, grain and fertilizers, said in a news release Dec. 2. “The CP team will keep open the lines of communication with shippers and government leaders as we push to become even more effective and efficient to meet the growing needs of Canada’s agricultural sector.”
In addition to the new record, CP Rail said it unloaded a record 2,216 cars at the Port of Thunder Bay during the week of Nov. 18 to 24.
CP Rail’s previous weekly record of 2,144 was set in the fall 2017.
Meanwhile, CN Rail says it’s focused on getting shipping back to normal.
“Our discipline on our recovery plan is delivering results,” CN president and chief executive officer JJ Ruest said in a news release Dec. 3. “While we expect to take some time, and we remain dependent on favourable weather, we are pleased by how things are progressing. Safety is at the heart of everything we are doing as we bring our Canadian operations back online and we have not experienced any significant setbacks at this point.”
Railway grain shipping during the 2019-20 crop year is down slightly from the same time a year ago, statistics compiled by the ATC show.
As of week 15 (Nov. 10 to 16) — the week before the CN strike — CN and CP had moved 125,491 cars compared to 126,629 during the same period a year ago.
This crop year’s weekly car movement average so far is 8,365 versus 8,441 during the same period last crop year.
In week 15 CN and CP delivered 96 and 99 per cent of ordered cars on time, the ATC said.
Due to the strike in week 16 (Nov. 17 to 23) CN delivered 37 per cent of the 5,409 grain cars ordered on time, while CP delivered 97 per cent.