Customers don’t often fight with one another for the right to get a bill.
But that’s exactly what’s happening in what is rapidly becoming an all-out war between the Canadian Wheat Board and grain handling companies over new grain shipping rules.
Both sides insist they should be listed as the “payer of freight,” or the shipper, on the invoices issued by the railways for shipments of CWB grain.
Since early November, the wheat board has been asking grain companies to arrange with the railways to have the board named as the shipper and have the freight invoices sent directly to the CWB for payment. Traditionally, the grain companies have paid the bill and been reimbursed by the board.
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After several weeks passed with no change in the billing, the board again asked the companies to implement the change for the week beginning Dec. 10.
But the grain companies have refused to do so, and have criticized the board for trying to “unilaterally” change the car allocation and grain handling systems.
“We think that’s contrary to what was agreed upon with the federal government, … that we should negotiate these aspects of the system,” said Will Hill, vice-president of Saskatchewan Wheat Pool’s grains group.
No matter what the bill says, farmers pay the freight. But the issue of who is the official shipper is a major point of contention.
The grain companies say they must be the legal shipper to deal with their responsibilities and liabilities in the new grain shipping environment.
The board says it must be the shipper to ensure that enough rail cars are allocated to the movement of CWB grain and to meet the needs of customers and farmers.
CWB spokesperson Trish Jordan said that if companies don’t comply with the board’s request, the agency could stop reimbursing the grain handlers for freight payments they make to the railways.
That would leave the grain companies out-of-pocket for the freight and would act as an incentive for them to change the billing.
“That’s basically what we’re looking at,” Jordan said. “What other recourse do we have?”
Jamie Dolynchuk of Cargill Ltd. said his company won’t change the bill of lading this week. He said he didn’t know what would happen if the board were to stop reimbursing the grain companies for freight payments.
The companies say such a move could be a violation of their handling agreements with the board, but the board disagrees.
That raises the prospect of a legal dispute, something both sides say they want to avoid.
“I just hope it never gets to that point,” said Dolynchuk. “We need to keep talking about the shipper issue.”
Railway officials are publicly staying out of the fight, saying they take their billing instructions from whoever is listed on the bill of lading. That is currently the grain companies, and to date they haven’t told the railways to make a change.
“This is a matter for the grain companies and the board to resolve, and we will follow whatever instructions we get,” said Ray Foot, assistant vice-president of grain for CP Rail.
