The Western Grain Elevators Association (WGEA) says Canadian National Railway’s report of a record week for grain shipments is good news, but it is looking for consistency.
“Even an amateur golfer can hit a hole in one once in a while, but the pros hit a good ball consistently,” says Wade Sobkowich, WGEA executive director.
CN issued a press release in late October announcing its best week ever for grain shipments. In the week of Oct. 16 (week 12 of the crop year), it moved more than 806,000 tonnes of grain from Western Canada, exceeding its previous record by more than 50,000 tonnes.
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“We are very proud to have set a new record for the amount of western Canadian grain moved in a single week,” says Doug MacDonald, CN’s chief marketing officer.
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MacDonald says he is also certain the railway will deliver on the consistency the WGEA desires. “We are confident that our railroaders will continue delivering results for Canadian farmers and all of our customers.”
Sobkowich acknowledges the rail line is doing a decent job so far this year. According to the Ag Transport Coalition’s weekly report, CN has consistently delivered more than 80 per cent of grain shippers’ demand for cars since shipments began picking up in week six. It reached 91 per cent in week 11, the first time in six weeks that it broke through the 90 per cent performance threshold.
“We’re pleased that they’re performing in the way that they are. The key is to stay on top of it,” says Sobkowich. “From our perspective, if they can do 85 per cent, or higher, week in and week out, then it’s acceptable. And when you get into the 90s, that’s what we call good.”
Of course, the WGEA would like the railways to provide a rail car every time one is ordered, says Sobkowich.
“I think you have to put it into perspective. When I make a telephone call to someone, I expect the telecommunications provider to have a line available for me to make that call 100 per cent of the time. But because of the way the rail freight market works, that’s not what we’ve grown accustomed to.”
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Sobkowich says rail car supply versus demand isn’t the only indicator of problems with the supply chain, but it is the most important. So, when looking at railway performance, that’s the place to start.
Canadian Pacific’s start to the shipping season was slightly less rosy.
“They’re struggling to get back into the higher percentages in terms of weekly car fulfilment,” says Sobkowich.
The ATC report shows CP consistently delivered less than 80 per cent of demand for cars from grain shippers in week six until week 10, when it rose to 85 per cent before dipping to 73 per cent for week 11. This marked the sixth consecutive week that CP fell short of the 90 per cent performance threshold.
“Once we start falling behind, it’s very difficult to catch up,” says Sobkowich. However, CP fills more orders for grain shippers than CN, so variance between the two railways is expected.
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At this time last year, things were humming along well for the railways. Smaller volumes as a result of the drought-affected harvest allowed both railways to maintain levels close to, or above, 85 per cent until about week 16 of the harvest year.
Then the proverbial wheels came off. Cold temperatures, atmospheric river flooding and a massive COVID-19 outbreak combined to reduce order fulfilment levels to around 50 per cent for CP and the low 30s for CN. Neither railroad would fully catch up until the end of the year.
While it’s unlikely those conditions will repeat, Sobkowich is cautious with his optimism that CN’s hot start is an indication of things to come.
“It really depends. We need consistency week in and week out. It isn’t enough on its own. We need to get a week like that every week, between now and through the winter and into the spring, when shipments tend to fall off.”
But Sobkowich does see it as an indicator that CN has resources in place.
“For us, it’s a good sign. If we got it in week 12, there’s no reason why we shouldn’t get it every other week going forward. So, we hope that this is a sign of things to come and we continue to get press releases from CN congratulating themselves for a job well done.”
