[UPDATED: Feb. 25, 2022] After five consecutive years of record western Canadian grain movement, grain shipping has slowed to a trickle and poor railway service, not the 2021 drought, is getting most of the blame.
The railways recovered relatively quickly from floods in British Columbia late last fall and grain shippers were expecting an upswing in service that didn’t come, Wade Sobkowich, executive director of the Western Grain Elevator Association (WGEA) said in an interview Feb. 15.
“Since the floods, winter service has been poor on CP and abysmal on CN,” he said. “Car fulfilment has been really low. CN had a number of weeks where it supplied zero cars in the ‘want week’ in Manitoba.
The ‘want week’ is the week that the grain companies want the cars to be spotted at their elevators.
In one recent ‘want week’ (shipping Week 27 or Jan. 30 to Feb. 6.) CN delivered just 197 cars to the entire province of Saskatchewan, Sobkowich said.
“Things are falling apart over there,” he said.
Sobkowich said to an observer like him, CN seemed like “utter chaos” and CP was also performing very poorly, which combined to paint a grim picture.
“They’re nowhere near their winter grain movement numbers,” he said, which is 4,500 cars per railway per week.
Mark Hemmes, Canada’s grain monitor says it’s due to a combination of natural disasters and railway errors.
“Putting it into context if this had been a normal year people would’ve been absolutely losing their minds and it would’ve been a horror story,” Hemmes said, alluding to the drought-shrunk grain supply, in an interview Feb. 15.
“Quite honestly I think we’re going to have to live with this another couple of months.”
Why it matters: Slower grain movement is going to lower revenue for farmers and grain companies during a year that’s already been hit by lower production due to drought.
Railway staff have been off sick with COVID and cold weather has also made shipping grain harder, Sobkowich said. But he also blames the railways — especially CN — for focusing too much on cutting costs to bolster earnings. CN cut 1,800 employees between December 2020 and December 2021, he said. That helped the company improve its operating ratio (a company’s operating expenses as a percentage of revenue) but those cuts are showing up in the form of poor service.
“These are good numbers for investors, but not good at all for customers and it’s difficult for the grain sector to accept these improvements in operating ratios when we are seeing very poor service right now,” he said. “That’s really at the root of this.”
Office cuts
Natural disasters, not a lack of staff, have hampered grain shipments on CN Rail, company spokesperson Jonathan Abecassis wrote in an email Feb. 16.

“(T)here were no layoffs for employees moving trains as part of our strategic plan,” he stated in the email.
CN expected grain shipping to be back to normal by the new year but then bad winter weather struck. Extreme cold meant shorter trains and less product moved.
“In the time since, normal winter operating conditions have returned,” Abecassis wrote. “CN has worked with its customers on traffic priorities. We have also been in contact with the Western Grain Elevator Association to hear its members’ concerns.
“We share customers’ frustrations with this winter’s conditions and continue to work hard to restore network fluidity and capacity. Finally, we want to assure Canadian farmers we remain committed to working with our customers and supply chain partners to get Canadian grain to ports and their end markets.”
CP spokesperson Salem Woodrow wrote in an email: “CP is working with customers to move their goods, including record amounts of corn and DDG (distillers dried grains) from the U.S. Midwest to feed cattle on the Prairies. CP will continue to communicate with customers on CP’s operating plan as we move through winter operating conditions.”
Western Canada’s 2021 crop estimated to be 47 million tonnes, is down 40 per cent from 78.5 million in 2020.
Meanwhile, as of Week 27 Canada had exported 17.6 million tonnes of crops down 40 per cent from 29.6 million tonnes exported during the same period a year ago, Canadian Grain Commission statistics show.
Poor showing
Grain companies told their export customers that while Canada had a smaller crop in 2021 the silver lining would be timely deliveries, Sobkowich said. It was a fair assumption given record railway grain shipping performance every crop year back to 2016-17.
But in Week 27 grain companies ordered only 3,586 cars from both railways combined — half what they would request in normal years — and received just 1,685 cars, he said.
“So normally we would be getting quadruple that,” said Sobkowich whose organization represents most of Western Canada’s grain companies. “You can see how (car) demand has fallen, but you can see how car supply has fallen way further.”
Hemmes, president of Edmonton-based Quorum Corporation, said he thought grain movement would have been back to normal by the end of January. Normally there would be around 55 ships in Vancouver, including 20 or so waiting to be loaded with grain, but now it’s 76 to 80, he said.

Car cycles — the time between when a car is loaded with grain in the country, hauled and unloaded at port and then returned to the country to be reloaded — has jumped from around 16 days to between 26 and 29.
“Those are insane numbers,” Hemmes said.
“Those are numbers that are unrecognizable. Even in my CN days, I can’t recall when car cycles were that high. You’d have to go back into the early 1990s to see stuff like that. It’s indicative of how things are running right now.”
The problems are partly because of washed-out rail lines late last year, partly because of cold weather, “and partly to do with the way the railways are managing their business,” he added.
Others hurt
Slow rail service is also hurting coal, potash and forest products.
In the meantime the railways are swamped with containers to move inland. As of Feb. 15 there were 13 container ships in Vancouver with eight anchored waiting for a berth, Hemmes said.
“When you’ve got that many container ships sitting around Vancouver it’s hard to get ahead of the game… they’re just having a hell of a time just trying to keep up,” he said. “I think losing those three weeks in the flood (last fall)… you don’t make up that kind of capacity overnight. I think there has been a focus clearing off that backlog and everyone else has suffered by it.”
When rail shipping has fallen behind in the past, CN said it had to focus on moving containers because it could lose that business. The fact that most western grain must move by rail allows the railways to ship it when it’s most convenient to them and without having to invest in more resiliency, Sobkowich said.
Fall to spring is when grain prices are best and when grain companies want to move the most grain to export, he added.
The WGEA hopes the Canadian Transportation Agency, which regulates Canada’s railways, will investigate the railways’ poor service, Sobkowich said.
The biggest disaster in grain transportation was in 2013-14 when a record crop backed up in the West as the railways struggled during a bitterly cold winter. It got so bad the Harper government shocked the railways and grain industry, by ordering the railways to move a set amount of grain weekly or be fined.
That led to the Transportation Modernization Act given royal assent May 23, 2018. While it introduced measures to make the railways more accountable to grain shippers, the legislation has proven less effective than WGEA members had hoped, Sobkowich said.
The railways have faced a lot of problems recently, Hemmes said.
“I have a certain amount of sympathy for the situation that they are in, but there was a big part of it that was of their own making.”
*Update: A clarification on the number of grain ships at the Port of Vancouver was added.