The grain transportation system is in a state of chaos.
There’s not enough transportation to meet demand and grain cars have been rationed.
The main victims are farmers trying to ship producer cars, especially on rail lines operated by or linked to Canadian Pacific Railway.
Grain sales have been lost because of the shipping problems.
“Had we had more car supply, we could have sold more in certain positions,” said Ward Weisensel, executive vice-president of marketing for the Canadian Wheat Board. “But we had to give up on some capacity because we couldn’t sell with confidence that we could deliver it.”
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However, he added things have improved in the past couple of weeks and he expects the board will meet all of its current sales commitments.
Reasons for the problems are a matter of debate but the consensus among a number of grain industry stakeholders interviewed last week is that the railways, especially CPR, were caught unprepared by the early harvest.
They say it took longer than it should have to get rolling stock, locomotives and crews geared up for a busy fall shipping season after two years of extremely light grain movement. The situation was exacerbated by heavy transportation demand from other commodities besides grain and a continent-wide shortage of rail cars.
“The railways were caught a bit short in terms of the number of cars available relative to industry demand in the last week of October and through November,” said CWB director Ian McCreary.
CPR, which has borne the brunt of the criticism, particularly in the case of producer cars, rejected suggestions that it was unprepared for this fall’s demand or that it has failed to provide adequate cars or service.
Spokesperson Leah Olson said the railway anticipated the increased demand and did a number of things to prepare.
Its track maintenance program was moved ahead and completed by the end of October, train crews in the West were increased by 200 people, an additional 80 locomotives were acquired and put into service this fall and the grain car fleet was increased by 2,800 cars to 26,150.
Olson acknowledged there have been some local delays and producer cars have been affected, but said the problems are not “systemic” and the railway is doing everything it can to move all the grain that’s out there.
“As far as we can see, we are supplying all of the cars that we’ve been asked to supply,” she said.
Mark Hemmes, president of the federal grain monitor Quorum Corp., said his office has received calls from industry groups and farmers complaining about railway performance, but cautioned against pointing fingers at any one player.
“With these issues, the source of the problem is rarely ever from a single place,” he said.
Nevertheless, some in the industry make no bones about blaming the railways.
“There is extreme frustration with the railways,” said an official with one small grain company who asked not to be identified. He said shippers have to maintain good relations with the rail companies.
“There are very fundamental issues here that really highlight the lack of accountability amongst railways, the lack of competition and the focus of the railways on supplying products to two companies at the expense of others.”
For example, he said, the advance car booking programs being used by both railways invariably include loading or operating conditions that make it impossible for smaller grain companies to qualify, let alone producer car shippers.
Regardless of what is behind the shipping problems, it is farmers who are being hurt, especially those who have been waiting weeks or months for producer car orders to be filled. Demand for producer cars is strong this year due to a high-grade crop and the recent proliferation of producer car loading sites across the Prairies. As of Dec. 6, the Canadian Grain Commission had received applications for 5,298 producer cars for Canadian Wheat Board grains.
The commission had allocated 2,184 cars, or 41 percent. Another 1,343 cars were on file awaiting allocation and the remainder involved such things as farmers waiting for delivery contracts or malting barley selection.
In several weeks, no cars have been allocated to lines served by CP.
“In the end, from the farmers’ perspective and from the cash flow perspective, he is in trouble, so we’ve got to find some way of getting over this issue,” said Bernie Churko, general manager of the Saskatchewan Grain Car Corp.
The corporation has called a meeting for Dec. 12 to bring together producer car shipper groups, the wheat board and the grain commission to figure out what can be done.
It was decided not to invite CPR to the meeting because it might be counter-productive at this point.
“People are just too angry,” said Churko.
