Pool aims for more freight discounts

Reading Time: 2 minutes

Published: March 21, 2002

Saskatchewan Wheat Pool wants bigger freight discounts for bigger

trains.

The company is shipping most of its grain in 50 and 100 car unit trains

and reaping the benefits of freight discounts offered by the railways

for multi-car loading.

The freight incentives are $2 a tonne for 25-car trains, $4 a tonne for

50 cars and $6 a tonne for 100 cars.

But Mayo Schmidt, the pool’s chief executive officer, says the company

would like to see even more savings at the high end of the scale.

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“There is still the possibility the railways will continue to widen the

spread and make the cost of loading 100s significantly less than 50s

and thereby drive further efficiencies into the system,” he said during

a teleconference call with market analysts and news media.

“That’s something we certainly intend to push for in the industry.”

The discounts promote efficiencies that benefit everyone in the

industry, he said.

This year, 91 percent of the pool’s shipments qualify for freight

discounts. About 68 percent of its grain has been shipped in 50 or 100

car trains, with another 23 percent loaded in 25-car blocks.

As grain supplies dwindle as the crop year winds down, the pool expects

to ship more 50s and fewer 100s, although it will continue shipping the

bulk of its business in the big trains.

“I don’t think we’re going to fall back to shipping more 25s, because

we will accumulate inventory until we have an opportunity to ship in

bigger blocks,” said Will Hill, vice-president of the pool’s grain

groups.

Schmidt said large unit trains will account for an increasing share of

the business as consolidation in the grain handling industry continues

and more small elevators are closed.

“We see a trend towards loading almost entirely 50 and 100 cars, and

even further down the road this market will move towards specifically

100 car units.”

That bodes well for the pool, he said, which has led the way among

grain handlers in replacing small elevators with large high-throughput

terminals capable of loading big trains.

He said rate discounts help the pool plan its future investments in the

grain collection system.

Schmidt described the rate savings as “free dollars” that are there for

the taking.

“They don’t come at anyone’s expense,” he said. “They are simply free

money based on more efficient movement of products.”

About the author

Adrian Ewins

Saskatoon newsroom

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