Canadian Pacific backs down from significant increases | Producers question why rates differ from those on the main line
Freight rates affecting producer car shippers in southwestern Saskatchewan will be higher in 2013, but the increase will not be as high as initially expected.
Canadian Pacific Railway had initially proposed freight rate increases that would have added $500 to the cost of shipping a producer car to Vancouver from many locations in southwestern Saskatchewan.
Producer car shippers along the Great Western Railway network in southwestern Saskatchewan say the cost of shipping a carload of wheat was initially slated to increase by two percent in areas closest to the CP interchange at Assiniboia, Sask., and by almost 12 percent in areas closer to Shaunavon, Sask.
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Roger Gadd, general manager of Great Western Railway in Shaun-avon, said parties affected by the proposed rate hikes asked CP to reconsider the rate increases.
Producer car shippers felt rate hikes should have been equivalent to freight rate increases affecting grain shippers located along CP’s main lines.
Freight rate increases were adjusted downward after discussions with CP.
Adjusted increases will now range from a low of two percent to a high of five percent.
The two percent increase will be in effect at producer car shipping sites located within 200 kilometres of Assiniboia, said Gadd.
Producer car shippers are concerned variable rate hikes will result in higher mileage rates for shippers located in areas that are further removed from CP lines.
Tim Coulter, a Briercrest, Sask., farmer and president of the Producer Car Shippers of Canada, said it is worrisome that the proposed rate hikes are not being imposed equitably.
“Shippers at Admiral, (Sask.,) alone were looking at an 11.69 percent increase … and yet when you look at the tariff rates that were increased in the main line, it amounted to two percent,” said Coulter.
“So you can tell what’s happening there. Is the producer going to be willing to pay an 11.69 percent increase on his producer car?”
CP spokesperson Ed Greenberg confirmed that grain freight rates will be increasing Feb. 1 but did not comment on rate increases affecting producer car shippers in Sask-atchewan.
CP revenues derived from the movement of western grain are regulated by the Canadian Transportation Agency, he added.
“It is possible that further adjustments, either up or down, maybe required prior to the end of the crop year.”
Gadd said there was no rhyme nor reason to the way producer car shipping rates were increased.
