How are the railways doing? Depends on whom you ask

Grain companies deny the railway allegation 
of ordering ‘phantom’ cars

The railways are moving more grain than during the same period a year ago, but whether shippers’ needs are being met depends on whom you talk to.

“Contrary to claims recently made by the new Ag Transport Coalition (ATC) that CN is somehow failing to meet demand, we know we’re responding very efficiently to all the demand from our customers,” CN president Claude Mongeau said in a news release March 11. “The facts are clear, when we compare our shipments with all valid car orders, our wait-list stands at less than 2,000 orders, just a few days’ worth of car supply.”

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In contrast the ATC says in its crop year week 28 report that since the start of current crop year Aug. 1, 2014 the railways failed to deliver 22,884 cars or 11 per cent of grain company orders.

CN says it has supplied 127,894 or 36 more cars than the ATC indicated over the first 27 weeks of the crop year.

“The coalition’s order fulfilment data is based at least partly on ‘phantom orders’ carried in a ‘shadow order book’ maintained by and only visible to the Ag Transport Coalition or its contractor,” a CN report says.

The WGEA denies its members — Western Canada’s major grain companies — routinely order more cars than they have grain to fill them with. And WGEA executive director Wade Sobkowich says the railways could prove him wrong by delivering all the cars that are ordred.

“The railways have the ability to penalize grain companies for unused capacity,” he said. “When the railways start supplying rail cars that grain companies don’t accept and use then they can argue phantom ordering. Until then, it is a ‘phantom’ argument.”

Sobkowich also denied CN’s charge of port terminals being a bottleneck.

“We could do about 2.3 million tonnes of throughput on the West Coast per week,” he said. “The railways are supplying… around 450,000 tonnes per week. So we have much more capacity to unload grain than they have to supply it. We are out of cars between 20 and 30 per cent of the time.”

Whose data is correct? It depends on how one counts car orders, said Mark Hemmes of Quorum Corporation, hired by the federal government to monitor grain transportation.

He suspects the ATC’s count is based on every order put to the railways, but the railways use a different method. For example, CN prohibits the current and earlier weeks’ total orders from exceeding double the grain company’s total car spot capacity.

“If these order request thresholds are exceeded, CN expects a grain shipper to reduce or remove car order requests from the Grain Car Order Book to stay in line with these limits,” CN says. “If no action is taken, CN will proceed to remove orders so that the total remains in line with these thresholds.”

About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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