Southern Manitoba’s Boundary Trails Railway Company (BTRC) had geography on its side last year, more than tripling the number of cars it handled.
The 38-km short line, which runs from Morden to Binney Corner just west of Manitou, handled 619 grain cars in the 2013-14 shipping year. The company is owned by 90 shareholders, mostly farmers, who purchased the line from Canadian Pacific.
“We are one of the most easternmost short lines so we’re close to Thunder Bay, we’re close to the U.S.,” BTRC’s general manager Travis Long told farmers attending the Boundary Loading Group’s second annual meeting Dec. 10, 2014.
Both CP and CN Rail focused grain shipping in corridors where they could turn cars quickly after the federal government ordered them to meet minimum shipping targets starting last March.
“And second to that we are on a branch line that CP has to travel on regularly.”
CP Rail services Bunge’s Altona canola-crushing plant six days a week so CP crews can work cars towards Morden for BTRC to pick up.
Most of BTRC’s business is producer cars individual farmers or their agents ordered through the Canadian Grain Commission. Producer cars, which are enshrined in the Canada Grain Act, are a competitive tool allowing farmers to bypass elevator companies, saving on elevator costs.
Up until last crop year 30 to 50 farms shipped grain via the BTRC, but in 2013-14, it jumped to 91.
“It shows there is more interest in this method of marketing grain than in the last (2012-13) crop year,” Long said.
There are four producer car-loading stations trackside on the BTRC — one at Darlingford, two in Manitou and one at Binney Corner — for a total of 46 car spots, with the equivalent of 44 cars of grain storage. As a result, cars can be quickly loaded as they arrive.
“We also do as much as we can to make CP’s life easier so we can protect our car supply,” Long said.
Farmers must pay a fee to use the grain storage and car-loading services, but can also opt to load cars themselves using augers.
BTRC also co-ordinates a grain-grading program so farmers using the rail line know the quality of their grain before they ship it out.
BTRC has shipped more than 1,800 grain cars since its creation. It estimates it will move 500 cars this crop year (2014-15). As of Dec. 10 it was three-fifths of the way there, Long said.
But there have been challenges. In 2012-13, the crop year the Canadian Wheat Board lost its sales monopoly, BTRC moved just 168 cars of grain.
“Our business suffered because of it,” he said. “We were lucky to start storing cars in 2012-13 to get some secondary revenue. Otherwise, we would’ve been in pretty tough shape.”
That crop year BTRC stored 360 empty tank cars. Last year, it stored 292. This crop year it has stored 185 cars so far.
Many industry observers predicted producer car shipping would decline post wheat board because it had been essentially the only buyer. There’s little financial incentive for companies to bypass their own country elevators. Farmers can’t get a producer car unless they have a buyer to accept it at its final destination. However, last crop year BTRC was able to get several grain companies, most of whom didn’t have nearby elevators, including some located in the United States, to buy grain shipped via producer car. This crop year seven companies are buying grain off the line — Gavilon, The Andersons, CHS, NorAg, CWB, P&H and Lansing.
Last crop year BTRC had a 400-car backlog by late winter and early spring but later caught up. Some producer car orders from last crop year still haven’t been filled on some lines, Long said.
Relations between BTRC and CP are improving, resulting in bigger train exchanges. CP used to deliver a maximum of 28 cars; now it regularly supplies 40 to 50 cars at a time, Long said.
However, CP recently changed its car management system and Long isn’t sure if it will help or hinder the short line. About 80 per cent of CP’s grain cars will be reserved for unit trains.
“That means that 20 per cent of the fleet is left over for… shippers like ourselves,” he said. “The planners tell us that in theory that should give us higher predictability because they will know week to week what they have to work with in terms of cars for producer car loaders.”
Also, now CP will only allow four weeks of open orders at any location.
“So it’s changing how we order cars to some degree,” Long said.
“Luckily because Manitou is a 25-car spot, in our situation we have to have quite a significant backlog of orders before they’ll refuse additional orders from us,” he said. “But if you’re shipping out of a station, say in mid-Saskatchewan that only has a four-car capacity, that means only 16 open orders can be at that station before CP refuses additional orders.”
BTRC is always looking for new business. It has hauled fertilizer and hopes to do more, Long said.
It’s also hoping to get business from Enbridge as it moves material in for a pipeline replacement project.
BTRC will also be busy maintaining its line, including upgrades to ballast, bridges and level crossings.
“We can’t let our infrastructure degrade or it would threaten the hauling we hope to be handling in the next few years,” Long said.
“We are looking at contract servicing, potentially doing track mowing and track inspection work for other railways in the province.”
BTRC advocates for producer car shippers when it can. BTRC director Don McLean, who farms near Manitou, sits on the Canadian Federation of Agriculture’s transportation committee, Long said.