There are two solitudes in the grain transportation system: the shippers and the railways.
Reading their statements makes one wonder if they are talking about the same network.
Shippers bemoan a system that constantly falls short of meeting their expectations.
The railways celebrate a system that is moving record amounts of grain.
Each side points the finger at the other, accusing them of being unco-operative and obscuring the reality of system performance.
The antagonism is understandable.
The stakes are high as the federal government conducts a review of the Canadian Transportation Act.
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The CTA review is billed as an arm’s-length process to assess federal rail and transportation regulations to ensure they meet industry needs and support economic growth.
Special attention is being given to issues affecting the agriculture industry, and a panel has been consulting with stakeholders to determine their views and wishes.
So the railways and shippers are ratcheting up the rhetoric, trying to ensure that any legislative revisions to the CTA favour their positions.
Such changes could have major implications for profitability of the players involved.
The railways frame their performance in a historical context, arguing that despite all the weather difficulties in 2013-14, they moved a record amount of grain.
And they are exceeding that pace in the 2014-15 crop year. Total grain, oilseed and pulse exports, as tallied by the Canadian Grain Commission, are 19.62 million tonnes to the end of Week 24 of this crop year, which is a 17 percent increase over the same time last year.
“CN is fully in sync with the grain supply chain in Western Canada, where end-to-end balance has been restored,” CN said in a Jan. 27 news release.
Yet when the Ag Transport Coalition views the same week in the crop year, it sees failure.
It notes that railways have failed to supply close to 18,000 hopper cars ordered by shippers over the period, representing 10 percent of overall demand
Furthermore, 8,200 customer orders, which is 46 percent of the current shortfall, have been outstanding for four weeks or more.
Tim Wiens, chair of Saskatchewan Pulse Growers, notes that failure to deliver on time causes customers to turn to other suppliers. Each car that fails to show up denies a farmer the ability to deliver.
“Reporting on aggregate figures and on performance relative to last year, or the five year average, does not resonate in the marketplace,” Wiens said.
So the railways are moving more than ever before, but it still falls short of what shippers and farmers need to maximize their potential.
The railways, which have been posting record smashing profits, want the government to end the revenue cap on hauling grain, arguing it limits their ability to invest in infrastructure to improve service.
But no thought should be given to that without first having a regulatory regime that has the power to resolve disputes over rail service and that gives shippers, big and small, a strong hand to extract hefty compensation when railways fail to meet contracted service levels.
Railways are near monopolies in the geographies they serve and must be regulated to put shipper and carrier on an equal footing.
It would also help to have a formal rail oversight group where, without rhetoric and finger pointing, the two sides could work to understand each other’s needs, focus on collaborative problem solving and break down the two solitudes.
