Little progress on grain movement

Grain movement improved slightly last week as Canada’s two major railways face a March 15 deadline to satisfy the federal government that they can do better.

The Ag Transport Coalition reported in grain week 31 that Canadian National Railway and Canadian Pacific Railway supplied a combined 45 percent of requested hopper cars, up from 32 percent the previous week. Although outstanding orders have declined, performance is still poor.

“On a combined basis, week 31 has yielded the second worst order fulfilment performance to date during the 2017-18 grain year,” the coalition said.

Performance to date has led to pressure from farmers and opposition members for the government to use tools such as an order in council to get grain moving. Several organizations called the situation a disaster and asked for a plan from government by the time it returns March 19 from a two-week break.

Transport Minister Marc Garneau and Agriculture Minister Lawrence MacAulay responded last week with an imperative to improve service.

“While the situation is not as dire as it was in 2013-2014, railway performance has been disappointing,” they wrote in a March 6 letter to both railways.

“To these ends, we are requesting that you provide the following information: 1. A clear description of how your companies intend to mitigate the immediate backlog in the coming weeks; and 2. Your plans for maintaining fluidity for the remainder of the current crop season once the backlog is clear.”

The railways are to post their plans on their websites by March 15.

The ministers also reminded the companies that they should be positioning themselves to respond to new requirements in Bill C-49, the Transportation Modernization Act, which the Senate is still debating.

The legislation will require the railways to publish a report on their ability to move the year’s crop before each crop year and a winter contingency plan by Oct. 1.

Both companies replied immediately with media statements.

CN interim president Jean-Jacques Ruest, who took over after Luc Jobin left abruptly March 5, apologized to grain customers.

“The entire CN team has a sense of urgency and is fully focused on getting it right for farmers and our grain customers, regaining the confidence of Canadian businesses and protecting Canada’s reputation as a stable trade partner in world markets,” Ruest said.

The company is offering incentives to employees to postpone vacations and delay retirements, deploying extra trains and adding crews in Western Canada.

CN said it continues to add conductors; it hired 250 in the last quarter of 2017, 400 in the first quarter of 2018 and another 375 in the second quarter. It also leased 130 locomotives.

CP, which operates a Dedicated Train Program for grain, said it has hired 550 staff and is adding 100 locomotives. The program has 15 percent more subscribers this year, the company said.

“DTP cycle times were on target and generally things along CP’s network were moving well prior to February,” CP said.

However, heavy snow in B.C. and colder weather hindered its progress after that.

“We are optimistic that with the weather turning in our favour, our singular focus on delivering safely for the supply chain, and the reopening of the Port of Thunder Bay, that we are on the road to recovery,” said chief executive officer Keith Creel.

Prime Minister Justin Trudeau and Saskatchewan Premier Scott Moe discussed the issue during their first face-to-face meeting in Regina last week.

Public Safety Minister Ralph Goodale from Saskatchewan was also in the meeting. He would not commit to an order in council, saying the government is putting pressure on the railways.

“The ministers have made it very clear that the kind of shortfall and backlog that developed over the last couple of months is not acceptable,” he told reporters.

“There needs to be a plan to address the immediate problem in the system and then a plan right now that looks ahead for the next year to make sure that the problem doesn’t happen again.

“And you’ve already seen some of the corporate consequences in the boardrooms. When would have been the last time that a CEO of a railway was sanctioned to the point of losing their job because they weren’t delivering on grain movement and the movement of other commodities as well? That’s a very strong message.”

Moe said he encouraged the prime minister to consider orders in council if the railways can’t respond in short order.

He said he also spoke to Ruest.

“I encouraged him to ensure that they are able to not just get up to volumes but be able to very quickly alleviate the backlog that we have here in Saskatchewan,” Moe said.

Meanwhile, the House of Commons agriculture committee met last week for an emergency meeting to discuss the problem. Members agreed to hold a four-hour, televised meeting March 19 to hear from witnesses.

The Liberal majority voted down a motion to require Garneau and MacAulay to appear.

NDP MP Ruth Ellen Brosseau, who was on the committee during the 2013-14 backlog that finally led to an order in council mandating minimum volumes and extended interswitching, said she still wants the grain portion taken out of the omnibus Bill C-49. Motions to that effect during previous debate were voted down.

“When we get back to the House I’m going to go forward with a unanimous consent motion to ask the Senate to carve out the grain piece and get that moving along as quickly as possible,” she told the meeting.

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