Railways mum on how producer car orders are allocated when total car demand exceeds supply
When rail car orders exceed the supply how do the railways decide how many cars are set aside to fill producer car versus grain company orders?
Only the railways know for sure and last week they were not answering the question directly.
“CP’s approach is to respond to producer car orders as they come in,” a CP rail official said in an email. “Once an order is placed, it is our commitment to respond as quickly as possible to provide the service to the producer.”
When asked again what happens when orders exceed the supply, CP wrote: “As you can appreciate, we have a process in place which involves direct discussions with shippers that are between our company and the shipper.
CN also failed to spell out how it rations service: “Once a weekly car order is received from the Canadian Grain Commission, CN compiles the producer car orders with all the other shippers’ weekly car orders for the specified want week. Producer car orders are incorporated in to the weekly service schedules, up to the maximum car spot of the loading location.”
While the Canada Grain Act says western Canadian farmers have the right to a car, the Canadian Grain Commission doesn’t have the authority to tell the railways how many cars they must make available, said CGC spokesman Remi Gosselin.
“It’s not like there’s a giant puppet master sitting somewhere and deciding where cars will be filled,” he said. “It’s really based on the rail line.
“It’s very logistical. There are a lot of factors.”
Some of those factors include other car orders in an area and the supply of crews and power, said Catherine Jaworski, the CGC’s manager of producer protection.
“There is no magic number, there is no magic formula,” she said.
If farmers, or grain companies feel the railways aren’t providing proper service, they can complain to the Canadian Transportation Agency, a quasi-judicial body that enforces the Canada Transportation Act. It’s expensive, time consuming and seldom pursued.
The producer car goes back more than 100 years. To encourage grain companies to build modern elevators to replace the less efficient flat warehouses, the Canadian Pacific Railway promised more cars to the elevators.
“In effect, the farmer was being forced to deliver his grain to the local elevator where he had no alternative but to accept the weight, grade and dockage as determined by the local agent,” F. W. Hamilton wrote in “Service at Cost”, a history of Manitoba Pool Elevators.
The Territorial Grain Growers’ Association successfully lobbied to have the Manitoba Grain Act of 1900 amended in May 1902 to force cars to be allocated on a first-come, first-served basis and the producer car was born.
“Apparently, the railway company had not been listening, for late that fall only seven cars had been spotted for platform loading at the nearby town of Sintaluta as compared to 60 apportioned to the elevators,” Hamilton wrote.
The Territorial Grain Growers’ Association launched a lawsuit against the CPR and won.
“The railway was found guilty of violating the car distribution clause of the Manitoba Grain Act and fined $50 — a decision later upheld in a higher court,” Hamilton wrote. “Henceforth, the railway agreed to supply cars as required under the amended terms of the Manitoba Grain Act, 1902.”
In 1912 the right to a producer car was enshrined in the Canada Grain Act.