Direct negotiations between shippers and carriers would create the kind of transportation system farmers could depend on, says a CP Rail official.
Rick Sallee, vice-president of agri-products and coal, said everyone talks about the lack of accountability in the system but no one does anything about it. All industry players agree it has to be addressed.
For example, farmers always ask why they have to pay demurrage when it is not their fault ships are waiting at port.
Sallee said it is easy to pass the blame. A railway could say it has no control over what grain is in the hopper cars.
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“You might be able to accuse somebody and say ‘it’s your fault’ but there’s no contract, there’s no accountability. If we can get into contractual commitments … the grain companies and the Canadian Wheat Board would have to contract that grain. They’d have to draw it in from the farmer. It would have to be the right type of grain. The farmer could depend on the system.”
Sallee said removing the Canadian Wheat Board from transportation would be part of this decentralized decision-making.
“We’re not criticizing the board for their marketing role,” he said. “We’re saying with this type of simplified system we would all be able to deliver what the wheat board is selling and in a much more cost-efficient way and in a way that, if we don’t perform, the accountability is clear.”
Contracts are one recommended change CP has put forward to the grain transportation review being conducted by Willard Estey. Sallee was in Regina last week to promote the three-part plan.
Another recommendation is flexible car allocation. Sallee said the Car Allocation Policy Group is an unnecessary level of bureaucracy and a flexible program would ensure the right grain cars get to port at the right time.
The third part of the plan calls for flexible rate pricing based on market demand. The current system of using average pricing hides the true cost of transporting grain and, in turn, discourages efficiency.
Sallee said the Calgary-based railway is adding more detail to its plan and will present it to Estey as its phase two submission later this month.
