Ottawa’s efforts to speed up prairie grain shipments have done little for short line railways and producer car shippers, says the former president of the Producer Car Shippers Association of Canada.
Tim Coulter, a farmer from Briercrest, Sask., said the interests of small shippers have been overlooked in an effort to get more prairie grain to export position.
He said recent news that Canadian National Railway and Canadian Pacific Railway are moving record volumes of grain to Vancouver, Prince Rupert and Thunder Bay suggests that small shippers have been thrown under the bus.
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Producer car loaders, small processors and elevators located on short line railways have seen little if any improvement in service since Ottawa ordered the major railways to increase their combined weekly grain haul to one million tonnes.
Some small grain handlers, especially those located on short lines and branch lines, are losing customers.
Others have been told to make alternative shipping arrangements.
Most have outstanding sales contracts that are months behind schedule and no hope of being executed in the current crop year.
“East and west movement is great … but the short lines aren’t getting any attention at all,” Coulter said.
Elevators with main line locations are getting lots of cars, sometimes more than they can use, he added.
Meanwhile, short-line shippers are waiting on cars that were ordered months ago.
Coulter said some main line elevators with 110-car spots were looking desperately for grain last month to fill empty hopper cars that were allocated during the seeding season. At the same time, short-line shippers 50 or 100 kilometres away had no cars, and their facilities were filled to capacity.
The inevitable result is lost business.
Producers who normally haul to short-line facilities are cancelling their outstanding producer car orders and instead trucking their grain to main line elevator locations.
For small grain handlers and shortline operators, business losses are mounting.
Coulter said grain shipments to U.S. customers, including pasta makers, oat processors and flour mills, have not improved since Ottawa imposed weekly shipping targets.
Grain shipments through southern rail corridors are still erratic, he said.
U.S. customers that can’t get Canadian grain are looking for other suppliers or absorbing extra freight costs for Canadian grain that is being shipped through less direct, non-traditional routes.
Coulter said CN and CP are shipping mostly from highly efficient main line locations to meet Ottawa’s mandate.
“I can understand (the railways’) point,” he said. “It’s not a good turn-around time (to ship grain south to the United States), so when you’re looking to minimize turn-around time, you’re going to ship from Alberta to the West Coast or from Manitoba to Thunder Bay and get your numbers up that way.”
Marv Lowe, general manager at Briercrest Grain, said sales through his facility are well behind schedule.
Fifty percent of the company’s 2013-14 sales contracts were still outstanding with six weeks left in the crop year.
Lowe said he is optimistic that car spots to his facility will improve over the next few weeks, but he is concerned about the long-term implications of federal regulations that require railways to move minimum weekly tonnages.
Grain that was originally scheduled for delivery through Briercrest has been leaking away to main line facilities in Moose Jaw, where hopper cars are spotted more regularly.
Lowe estimated that small shippers and processors requested 13,000 of the 19,000 cars now on back order.
“The allocation system and the legislation that was enacted really didn’t work to our advantage,” he said. “It’s become a game of numbers for railways to get (grain) moved.”
Lowe said Ottawa needs to look carefully at how current regulations are affecting short lines and producer car users.
Regulations that focus only on volumes could have a devastating financial impact on small grain handlers, he said.
“I think there should be a certain requirement for pulling grain off branch lines and short lines … and I think that rather than just saying that railways have to move so many cars a week, there should be further qualifications on that,” Lowe said.
“Maybe they (Ottawa) need to cut the railways a bit of slack in exchange for moving grain from (branch line locations).… Maybe those weekly numbers have to be relaxed ever so slightly as a credit to the railways so that we can get our grain moved.”
