The Canadian Wheat Board says grain companies are resorting to fear mongering to resolve the longstanding grain transportation dispute.
“I suspect their strategy is to make it look as if the system is in chaos in hopes the government will re-open the legislation and deem them the shipper,” said Adrian Measner, the board’s vice-president of marketing.
“Unfortunately for them, the system is generally working very well, so there is really little need to enter into a new series of debates over system reform and discuss old issues such as who should have a role in grain transportation and who should not.”
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Measner was reacting to comments that accompanied the Western Grain Elevator Association’s latest solution to the grain transportation impasse.
“The current transportation situation is damaging Canada’s reputation in world grain markets and is wasting farmers’ money,” said association chair Gord Cummings in a news release announcing a proposal that would, among other things, make grain companies the official shippers of wheat board grain.
The dispute between the board and the grain companies over who will control the movement of board grain has delayed the implementation of new grain transportation legislation. The new rules were supposed to take effect Aug. 1.
Cummings said the existing patchwork transportation system functioned well for the first three months of the 2000-01 crop year because there were plenty of carryover stocks to move, but the confusion and bickering surrounding the new environment is beginning to cause delays and increase costs.
“We’re now into November and what we have are vessels in port being loaded slowly and incurring demurrage and other charges,” he said.
As of Nov. 24, there were nine ships loading at the West Coast and another 14 waiting to be loaded. The ship that has been waiting the longest has been at the port of Vancouver for 24 days.
A board spokesperson said the number of ships waiting to be loaded is higher than usual, but it’s “not outlandish” for this time of year.
Justin Kohlman said grain exports are almost one million tonnes ahead of the same time last year and car unloads in Vancouver are averaging 3,333 cars per week, 501 more cars than the five-year average.
Cummings said most shipping delays at the West Coast could be prevented under the WGEA’s new proposal.
The proposal would lead to greater capacity, accountability and cost efficiency through better system planning and it would address concerns raised by the wheat board, he said.
Every month the railways, marketers and export terminals would provide a rolling 12-month forecast of grain handling demand and system capacity to an independent clearinghouse.
It would consist of long-term (12 months), mid-term (four months) and short-term (60 days) projections broken down into board and non-board categories.
The short-term plans would include specific capacity commitments by shippers. Marketers would be contractually bound to use the capacity they booked.
“I’m not saying we’ll create infinite capacity but we’ll create more capacity in the peak months with all parties working together,” Cummings said.
Under the proposed plan, the wheat board would be guaranteed a base level of rail car and terminal capacity equal to a certain percentage of the board’s historical five-year average capacity.
Board officials scoff at that notion. Kohlman said the five-year average for canola movement is 2.7 million tonnes. Grain companies have already moved 1.5 million tonnes under the canola program this year.
If the same deal was offered to the grain companies, they would be limited to shipping 1.2 million tonnes of canola over the next nine months, Kohlman said.
“I would suggest that if we offered them a similar program they’d tell us to take a flying leap.”
WGEA executive director Ed Guest said the board doesn’t seem to understand that the companies are offering a minimum commitment – a floor on which the agency can build by adding capacity through the independent clearinghouse concept.
CN and CP Rail and the Western Barley Growers Association support the WGEA’s proposal.
Last week, the WGEA called for binding arbitration to break the months-old logjam in transportation negotiations, but that doesn’t seem likely to happen.
“Nobody in the government has formally said yes, no or otherwise, but we understand that (binding arbitration) is not something that the government will say yes to,” Guest said.
