WINNIPEG – Loaded grain cars sitting idle at Thunder Bay show that grain transportation tie-ups aren’t always their fault, say railway officials.
CN Rail says it has made 1,200 rail cars a week available to haul grain to the Lakehead, in response to sales-based unload targets agreed to by the industry.
But there are only enough sales on the books to use 900 of those cars. At the same time, CN had more than 600 loaded cars waiting at the port last week.
“This has not been a promising start to the 1997-98 crop year,” said CN vice-president Peter Marshall.
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Both railways say they expect unloads to fall below target for the next several weeks, and take pains to point out they’re not to blame.
“We’re there and ready with the grain,” said Bob Molloy, director of grain strategy for CP Rail. “Our message is just keep that in mind when someone issues a press release saying there aren’t enough cars for Thunder Bay.”
Because of the backlog, fewer empty cars will be returned to the country for loading and less grain will be shipped out of prairie elevators over the next few weeks.
“We know we’ll be under pressure to move a lot of grain in the months ahead,” said CN spokesperson Jim Feeny. “We had committed resources to the system based on the operational guidelines and they’re not being used. That’s frustrating.”
Grain industry officials say one reason for the situation at Thunder Bay is that sales were completed earlier than expected and so the need for cars has dropped off accordingly.
“It’s not like either the board or non-board sales programs were significantly short of what was anticipated,” said Terry Chabluk, of the Car Allocation Policy Group. “But the movement came earlier than had been targeted.”
Avoid congestion
Stan Sichewski, transportation manager for the Canadian Wheat Board, said the board doesn’t want to take more cars than it has sales for. That would result in congested terminals at Thunder Bay and the St. Lawrence River, something the board wants to avoid with a new crop soon coming off.
“We’re not in a position right now where we want to take the cars and move product down there that we may not need,” he said. “We have moved ahead of our sales commitments in June and July and now we have to be careful we don’t totally plug up the system.”
Molloy said the railway would like to see more grain moved into position along the St. Lawrence River now, when there is excess rail capacity, rather than waiting for fall when demand peaks.
He added the railway recognizes that sometimes sales programs will fall below projected levels, but it doesn’t want to shoulder the blame for the resulting lack of unloads.
Feeny said the situation at Thunder Bay reinforces the need for an early review of the entire handling and transportation system, as promised by federal ministers last month.
The railways came under intense public criticism last winter when unloads failed to meet target levels at the West Coast. They face a regulatory review of their performance, instigated by the Canadian Wheat Board.
While it often becomes a public issue when there are problems getting grain to port and vessels queue up for grain, there isn’t the same hue and cry when the grain is arriving at port but the sales don’t keep pace.
Both railways have tried to make it an issue in recent months, issuing weekly press releases outlining their performance relative to targets, highlighting shortfalls in the system and repeatedly calling for an overall review of grain transportation.
Other variables play role
Feeny said the Thunder Bay situation shows it’s unfair to hold the railways accountable for failing to reach targets when so many other factors can come into play.
“We have unload guidelines based on sales, but there’s no commitment there are actually going to be sales,” he said. “We’ve been blamed for things that are not our responsibility. There are problems in the system … and that’s what we’re illustrating here.”
Every month the CAPG puts out a four-month shipping plan, setting unload targets based on sales forecasts provided by the Canadian Wheat Board and private grain merchants. The numbers are refined each month, but Chabluk said even the nearby month can turn out to be inaccurate.
“Things can change quite a bit, even on the marketing side, in that period of time,” he said. “There’s always a lot of uncertainty around the numbers in the plan.”
