SASKATOON (Staff) — It has been estimated that at any given time, as many as 4,000 Canadian grain cars are in the U.S.
Grain Transportation Agency administrator Peter Thomson says that with turnaround times twice as long on U.S. movement, that has serious implications.
“Very roughly, if we move three or four million tonnes to the U.S., that’s six or eight million tonnes that didn’t get unloaded at Vancouver or Thunder Bay or wherever,” he said.
Ron Weik, transportation analyst with Saskatchewan Wheat Pool, said if that’s the case, the wheat board has to get a huge price premium on its U.S. sales to make it economical. It would have to net $100 on a U.S. sale to do better than $50 on a sale out of the West Coast.
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“I think there’s a huge opportunity cost,” he said.
Many in the grain industry are also concerned about the freight rates on grain shipped south. CN Rail spokesman Jim Feeny said the rate on eastbound U.S. grain is confidential. But on grain that moves to Vancouver and then south to California there is a published rate.
“The stuff that’s going that way now, it ranges anywhere from about $4,500 (U.S.) a car to $6,000 and over, depending on where the origin is, where it’s going, the size of the shipment and so on,” he said.
Calculating rates
Based on current exchange rates and a 90-tonne car, that works out to a range of $68 (Cdn.) a tonne to $91 a tonne. Under the WGTA rate scale, the railways would be paid about $55 for a haul of 2,700 kilometres, roughly the distance from Moose Jaw to California.
John Heads, a rail transportation specialist at the University of Manitoba’s Transport Institute, said those are “extremely high” published rates.
“However we shouldn’t assume grain is necessarily moving at those rates,” he said. “No doubt the railways and the wheat board have negotiated confidential contracts to give rates somewhat lower than that.”
