It’s time to bring in a third party to resolve the impasse over new grain shipping rules, say prairie grain companies.
The Western Grain Elevators Association this week called for binding arbitration to break the months-old logjam in transportation negotiations with the Canadian Wheat Board.
“The current situation is not acceptable,” said Ed Guest, executive director of the WGEA.
He warned the industry is headed back into the “nightmare” it faced in 1996, when grain shipping woes cost farmers and grain companies millions of dollars in lost revenue.
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The WGEA says vessels are starting to back up at west coast ports, railcar unloads are below capacity, export customers are being inconvenienced and demurrage charges are building .
However, a CWB spokesperson took issue with the WGEA’s depiction of the situation.
“We obviously want to clear up the problem we’ve got out there, but we don’t share their sentiment that there is a crisis,” said Justin Kohlman.
The board said that as of last week four vessels were collecting demurrage, due mainly to some recent changes in grain shipping logistics.
“We expect that in the next two to three weeks things will be back to normal,” said Kohlman, adding that unloads are 8,000 cars ahead of last year and exports are more than 940,000 tonnes higher.
In August, the WGEA asked the government to appoint a mediator, but Guest said with the grain industry now in its peak shipping season, binding arbitration is needed.
“There is a very large problem looming and we can’t wait for a mediator,” he said in a interview Nov. 20.
Representatives from the board and the grain handlers were to meet Nov. 21 in Winnipeg to discuss the WGEA’s latest proposal to resolve the situation, and the request for arbitration.
New rules governing the movement of grain from country elevators to export positions were supposed to go into effect at the beginning of the crop year Aug. 1.
However, the board and the grain handlers have been unable to agree on the details, despite dozens of meetings over the last few months.
The grain companies say they have invested more than $1 billion in grain handling facilities and need freedom to manage those assets to generate savings that can be passed back to farmers. That means being in charge of how grain is moved into and out of their facilities.
The board says it must be involved in transportation to ensure that the right grain is shipped at the right time to overseas buyers and to protect farmers’ interests against the grain companies and railways.
Guest said the timing of the call for binding arbitration isn’t related to the elections under way for the Canadian Wheat Board or the federal government.
“The only thing we’ve thought about is that we’re into a huge problem time in the grain handling and transportation industry right this minute.
“The election is a complicating factor, but that doesn’t negate the seriousness or the urgency,” said Guest. “Those two things are here right now, regardless of a federal election or a wheat board election.”
