The Conference Board of Canada says the grain handling and transportation system is less efficient than it could be and it largely blames the involvement of the Canadian Wheat Board.
“The logistics process used for CWB-administered grain appears to entail costs that are often higher than those of the commercially driven process for non-CWB grain,” said the Conference Board report prepared for a transportation industry lobby group that includes the two national railways.
“This suggests that the transportation system for CWB grains could benefit by migrating to the more commercially oriented approach used for non-CWB grains.”
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The CWB fired back, disputing the evidence, challenging the conclusions and suggesting the analysis misunderstood the CWB system and mirrored arguments made for years by the railways.
“There is no depth of analysis in the sense that they are not looking at any other factors like the behaviour of the railways or the behavior that occur at port,” CWB media relations manager Maureen Fitzhenry said.
“It’s like they have a pre-determined agenda to examine the wheat board effect on the system in isolation.”
She noted that transportation players represented by the Centre for Transportation Infrastructure paid for the study and provided information but shippers including the CWB were not asked for their side.
At the core of the Conference Board analysis is the conclusion that while grain transportation efficiency has been improving in recent years based on time the commodity spends in the system, CWB grains still spent an average 57 days in the system in 2008-09 while canola spent on average 30 days and peas spent 47.
Conference Board analysts said it was largely because board grains spend more time in country elevators.
It said a key problem is that the wheat board operates a “push system” that calls grain into the system to be available when sales are made. Non-board grains use a “pull system” that gets product into the system in response to a sale.
In addition, multiple wheat grades make the system more complicated.
“One of the implications of the study is that if the CWB moved to the pull system, efficiency would improve,” said Len Coad, Conference Board director for environment, energy and transportation.
Fitzhenry said that conclusion underlines the report’s problems.
“The huge underlying flaw is that they talk about us using a push system versus a pull system and that is completely incorrect,” she said. “We do use a pull system.”
The Conference Board of Canada is a not-for-profit research organization funded through services it charges to private and public sector clients.
