Eastern, southern movements halted | Moving grain to Vancouver and Prince Rupert top priority
Federal agriculture minister Gerry Ritz says the railways will concentrate on shipping more grain to western ports rather than transporting product east and south.
“That’s the message they’ve sent…. They will concentrate on Vancouver and Prince Rupert, to move as much grain as they can,” Ritz said Feb. 24 following a meeting with grain and railroad industry representatives in Winnipeg.
“They’ve told the grain companies that they’re not going to entertain anything, in the next short time, that goes to the U.S. or Thunder Bay.”
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Ritz said he’s not particularly satisfied with this decision because the railways should be focused on shipping grain to buyers rather than increasing volume.
“They (farmers) want to be able to ship to the buyer of record. If that means it’s the U.S. port, that’s where it should go,” he told reporters in Winnipeg.
“I’m more concerned about the value of the product rather than the volume.”
Ritz also talked with Scott Moe, MLA and legislative secretary to Saskatchewan agriculture minister Lyle Stewart, as well as Manitoba agriculture minister Ron Kostyshyn and Alberta agriculture minister Verlyn Olson.
Ritz said the logistical bottleneck of grain shipments isn’t acceptable, and the federal government is considering all options to resolve the problem, including further regulations on railway companies.
“There was also talk around reciprocal penalties, and they (railway reps) were on full blown retreat on that issue this morning.”
Ritz did not specify how regulatory penalties, such as fines, might function.
“The problem is until you get performance standards that are entrenched, it’s really hard to even assess fines.”
Olson said there should be “financial motivation” for the railways to provide a benchmark level of service.
“I’m not just talking about penalties, in terms of paying a fine to the federal government,” he said.
“I’m thinking more about how grain companies pay demurrage. Producers have contractual obligations and they pay penalties. I see no reason why there shouldn’t be something similar for railways.”
Olson said farmers cannot wait months or years for a solution to this year’s problem, which is why he is lobbying for enhanced federal oversight as soon as possible.
“Some sort of federal motivation to the railways to ensure they are maximizing their capacity to haul,” he said.
“Waiting for some sort of collaborative, voluntary solution may not be leading us to the kind of quick action that we need. We think the federal government needs to give the parties a push.”
Saskatchewan economy minister Bill Boyd said Canadian National Railway and Canadian Pacific Railway committed to dedicating thousands more grains cars, which would continue until December.
Ritz said the current allocation of rail cars is underwhelming and he’s not completely sold on the railway promises.
“We heard from the grain companies that their inland and port capacity will optimally run when roughly 13,000 rail cars are provided per week. That’s about three times what is happening now, or more,” he said.
“They (railways) fudged those numbers very well this morning…. Depending on what the call was for and where it was going, it would of course affect how many cars they could spot and move into unload facilities.”
