Canada’s largest grain company says bad weather has prevented it from fulfilling some of its rail car contracts with the two national railways.
As a result, Agricore United is trying to negotiate its way out of contracts involving around 100 rail cars on the grounds of force majeure.
“It’s a negotiation between us and the railways about the number of precontracted cars we’re not going to be able to use,” said AU spokesperson Radean Carter.
Force majeure is a legal term referring to unpredictable acts of nature beyond the control of human action that prevent a contract from being fulfilled.
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Carter said because of the late crop and delayed harvest, grain is not being delivered to country elevators, particularly in Manitoba and parts of Saskatchewan.
“Normally by this time we’re putting through cars quite quickly and filling them up all over the place, but we’re just not getting new-crop grain off the fields yet,” she said.
“It’s due to the weather and that’s an act of God.”
The 100 cancelled cars were to be shipped the week ending Oct. 11. Carter said it was too early to say whether any cars scheduled for the following week would also have to be cancelled.
She emphasized that 100 cars represent just a small percentage of the company’s total weekly movement.
“It’s really not that big a deal in the big picture,” she said.
An official with Canadian Pacific Railway declined to comment on AU’s request for force majeure, saying it involves a confidential commercial arrangement. Officials with Canadian National Railway could not be reached for comment.
Carter said the situation has not yet resulted in cancelled sales or delays at port, adding that the company is working with its end-use customers to defer some orders until new-crop deliveries begin in earnest.
An official with the Canadian Wheat Board said it has not experienced any problems meetings its sales commitments this year because of the late harvest or lack of grain deliveries.
Saskatchewan Wheat Pool was quoted by Reuters News Agency Sept. 10 as saying it has not requested force majeure on any contracts. However the company added it would need good weather over the next few days to meet its freight commitments.
This marks the second time this year that a grain industry player has invoked force majeure on the grounds of bad weather. In February, CPR did so on the grounds that severe cold and blizzards on the Prairies, along with avalanches in the mountains, had made it impossible to maintain normal operations.
