Another study, this one by a Calgary-based think tank, has offered its views on measures that can be taken to improve rail service in western Canada.
A report by the Canada West Foundation entitled A Smoother Track for Exports concludes that western Canada’s rail transportation is working well, despite well-documented challenges that affected rail service and grain movement in the winter of 2013-14.
However, the report goes on to suggest there is room for improvement.
It offers 25 recommendations for steps that can be taken to improve rail service in Alberta and across the Prairies.
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Among other things, the report recommends:
• that the governments of Canada, Saskatchewan and Alberta should initiate discussions related to the replacement of government owned grain hopper cars;
• that containerized grain movements should be removed from maximum revenue entitlement (MRE) provisions, a step that would provide a monetary incentive for railways to move more containerized specialty grains;
• that stakeholders in the grain transportation system should explore the benefits of allowing producers and grain companies to opt out of the maximum revenue entitlement, a step that could spur innovative transportation solutions, and;
• that commercial agreements and dispute resolution mechanisms should play a larger role in determining the relationship between grain shippers and railway companies.
The study, commissioned by the Alberta government, also suggests the need for more flexible operating hours at grain elevators and export terminals during periods of peak demand, improved data collection and sharing as a means of improving logistical co-ordination, infrastructure improvements at recognized choke points in the supply chain and the removal of more level crossings in key areas.
A complete copy of the report can be viewed online or downloaded from the CWF website here.
“We started looking at this very focused on an Alberta prospective but quickly realized that we needed to look at it from a network perspective as well,” said CWA senior economist Janice Plumstead, who co-authored the report along with Colleen Collins.
“All of the work that we do at CWF is policy oriented so we certainly hope that the (report) … has some kind of influence on policy….”
Plumstead said the transportation challenges that arose during the winter of 2013-14 were akin to a “perfect storm” caused by a combination of factors that included a record harvest in the fall of 2013, an extremely cold winter that limited rail traffic, and high demand for rail service from other sectors such as oil and gas.
“To some extent, removing the CWB (Canadian Wheat Board) probably had some affect as well, as far as producers getting … a new logistics pattern going,” Plumstead said.
“What we (learned) … was the importance of information and how information is shared across the network …,” she added.
The report’s recommendations on the maximum revenue entitlement are generally consistent with those expressed in the Emerson report.
The Emerson report suggested that the MRE be phased out over a seven year period in hopes of establishing a more “commercially grounded” railway transportation system.
The CWF report recommends that containerized grain — primarily specialty crops and smaller shipments of premium value grain — should not be subject to the MRE and that bulk shippers should have the opportunity to opt out of the MRE, presumably by paying a higher unregulated freight rate for a different level of service.
The report states that the MRE “acts as a deterrent to efficient operations in the grain supply chain” and adds that “a market rate for grain could eliminate the resistance of railways to invest in more efficient hopper cars as the current fleet retires.”
“The use of containerization has increased over time… (so) to have that under the MRE … reduces the flexibility of actually moving grain,” Plumstead said.
“And just generally, if (shippers) feel they’re capable and that they want to make their own arrangements outside of the MRE, we certainly don’t see a reason they shouldn’t be able to do that.”
Contact brian.cross@producer.com
