Canada’s railways say they are moving more grain than a year ago, but still aren’t meeting grain shippers’ demands, according to the latest weekly railway performance report prepared by QGI Consulting for the Ag Transport Coalition.
And there’s the rub, says Wade Sobkowich, executive director of the Western Grain Elevator Association (WGEA), which represents Western Canada’s major grain companies, and a coalition member.
“We can’t discuss averages or talk about annual totals,” Sobkowich said Feb. 4 after the report for grain Week 23 was released. “We have to talk about performance on a week-by-week basis and this report does that.”
CN Rail said in a recent statement it had shipped a record amount of grain during the first half of the current crop year — 18 per cent more than at the same time last year.
However, the Week 23 report says CN and CP Rail supplied 2,271 cars or just 25 per cent of the 6,312 cars ordered for delivery.
“In the crop year to date, the railways have supplied 45 per cent of customer orders in the week for which cars were ordered, with CN supplying 58 per cent of orders and CP supplying 33 per cent,” the report says. “Through the first 23 weeks of the current crop year, railways have failed to supply 15,743 hopper cars ordered by shippers. This represents a shortfall equivalent to nine per cent of shipper demand.”
The report says the shortfall for both CN and CP has continued to grow weekly since the beginning of the crop year.
“More than 7,400 customer orders — approximately 47 per cent of the current shortfall have been outstanding for four weeks or longer.”
CP blames interruptions
There are factors not mentioned in the latest report to consider, CP Rail spokesman Jeremy Berry said in an email. For example, due to New Year’s (Week 22) there was a 1-1/2-day closure at the ports so cars weren’t processed in a timely manner. The report also dwells on the number of cars waiting at port, but fails to note that the port cannot process many of those cars “disrupting the rhythm of overall railroad operations.”
Sobkowich said the Week 23 figures speak for themselves — the railways are not keeping up with grain company car orders — a long-standing shipper complaint. According to the WGEA the railways don’t have to compete to move grain and therefore don’t have to invest in surge capacity.
In a truly competitive market the railways would meet grain shippers’ requirement or shippers would go elsewhere, Sobkowich has said in previous interviews.
The WGEA, backed by many farm groups, wants the federal government to pass legislation requiring the railways to sign service agreements with shippers, which include penalties for failing to fulfil the agreement.
The railways say it’s too expensive and inefficient to build a system to meet temporary surges. They say they are shipping more grain than in the past and the key to increased throughput is better pipeline collaboration and less regulation.
CP Rail issued a statement saying it was “appalled that a government-funded group such as the Ag Transport Coalition can claim it is trying to enhance ‘the competitiveness of the agricultural supply chain,’ but not involve transportation partners in the discussion (see sidebar).
Until now most railway performance data has been aggregated and either supplied directly by the railways or through Quorum Corporation, the firm hired as Canada’s grain transportation monitor. The Ag Transport Coalition, with funding through the federal-provincial Growing Forward 2 program, was formed to measure weekly railway performance from the grain shipper’s perspective, Sobkowich said.
Other members include the Canadian Canola Growers Association, the Alberta Wheat Commission, Pulse Canada, the Manitoba Pulse Growers Association, the Canadian Oilseed Processors Association, the Inland Terminal Association of Canada and the Canadian Special Crops Association. The coalition issued its first report Jan. 30.
“The idea is to continue to provide this data on a weekly basis as long as the resources are available to do that,” Sobkowich said.
The weekly reports are available at agtransportcoalition.com.