Canada’s railways continue to move record grain volumes but that doesn’t mean rail service woes have disappeared, the Western Grain Elevator Association (WGEA) warns.
February marked the 12th month in a row that CN Rail moved a record amount of grain. It shipped 2.28 million tonnes, up seven per cent from the previous record of 2.12 million tonnes set in February 2019.
“So far, during the 2020-21 crop year, CN has moved over 19.7 million tonnes of Canadian grain,” CN said in a March 2 news release. “This is 24 per cent higher than the three-year average of 15.9 million tonnes, and 17 per cent higher than the record of 16.9 million tonnes set in the 2018-19 crop year. CN is also breaking records with over 700,000 tonnes of grain moving directly from Western Canada via containers, in addition to volumes shipped from Eastern Canada.”
Some farm groups, quick to criticize the railways when service is poor, have praised railway performance, however, CN has fallen short of meeting car orders the last few shipping weeks, WGEA executive director Wade Sobkowich said in an interview March 19.
“It seems to the casual observer that maybe we have turned the page on some of the challenging and inconsistent rail service levels of the past, but the WGEA is very concerned without some attention to this and without an increased rate of rail capacity growth and better supply chain execution that we’re headed towards a greater disparity between service and the demand for service. It might not be the rest of this crop year but at some point in the future.”
As the railways move grain, grain shippers are ordering more cars and at times the railways aren’t keeping up, Sobkowich said. The result is record grain movement and poor rail service at the same time.
Western grain production is increasing by three per cent a year on average, Sobkowich said. Since domestic demand is flat it means exports need to grow by four per cent, he said.
The last five years country elevator and port storage is up by 13.9 and 11.2 per cent and throughput is up 16.5 per cent, he said.
However, according to Sobkowich rail capacity, although up, isn’t keeping pace. He said according to the federal grain monitor, over the same five-year period, railway fleet sizes have increased by 2.5 per cent and loaded weight per car has increased by 3.1 per cent, however, car cycle times have grown by 19 per cent.
Notwithstanding CN’s records, there were issues getting grain from some Prairie elevators this winter during cold weather, Sean Finn, CN’s executive vice-president of corporate services and chief legal officer, said in an interview March 18.
“We’re not perfect,” he said. “There have been some challenges — a couple of bottlenecks in some places and some issues at the port once in a while, but overall I think we’ve had a good run of it.”
Finn credits 12 consecutive months of grain shipping records to its large capital investment in Western Canada.
“We had the locomotives, we had the crews, we had the track capacity and we had the new high-cube grain cars. That creates resilience. Resilience gives you better service and it allows us to recover as we had some challenging weeks in February and March with really cold weather. When the weather breaks you can catch up a lot quicker because we have that capacity. I think it just showed a lot of determination by CN to move the grain. Our employees didn’t miss a beat. During COVID they were there. I must thank them all for their very strong efforts to get the grain to market.”
Grain movement records are also a credit to the rest of the supply chain — farmers, grain companies and port terminal operators, — Finn said.
“It’s a team sport like I told you before,” he added.
“I think the supply chain has built a lot more resilience. When there are issues we act a lot quicker — less finger pointing and more working co-operation is probably the best result here that allows us to move the grain for the benefit of the grain industry and farmers of Western Canada.”