The company that played a major role in reviving the producer car business in the late 1990s says it welcomes new competitors.
“It’s a good sign of a growth-oriented business,” said Rob Lobdell, president of West Central Road and Rail Ltd. “It never hurts to have multiple players vying for the same business.”
WCRR was set up by producers in west-central Saskatchewan in 1997 in an effort to preserve local rail lines.
At the time many in the grain industry were concerned about the future of producer cars, which didn’t fit into business models pursued by the railways or grain handling companies.
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After a lengthy struggle, WCRR succeeded in saving the line and is a leading shipper of producer cars, handling 3,000 to 4,000 cars annually.
Several producer car shipping groups have sprung up in recent years, most of them organized by local farmers.
Mission Terminal of Winnipeg, which operates a terminal at Thunder Bay, Ont., has also entered the producer car scene in a big way. It has signed business agreements with a number of those local groups, offering various incentives to shippers and saying it wants to be the dominant player in producer cars.
Lobdell said there has clearly been a shift toward more direct head-to-head competition for producer car business.
That’s what WCRR envisioned when it started up, adding it’s necessary to get more players involved to ensure the long-term viability and competitiveness of producer cars.
About 11,000 to 12,000 producer cars will be shipped in 2007-08, representing about one million tonnes of grain.
“They have become a significant part of the grain shipping business,” said Lobdell.
He expects continued growth in those numbers, especially if shippers of non-board grains, like canola, peas and lentils, can be convinced of the value of shipping their own cars.
Both WCRR and Mission have come out with shipping programs for 2008-09 designed to attract new customers.
Lobdell said WCRR’s enhanced loading program provides farmers with benefits in the range of $8 to $13 a tonne above the $10 a tonne they save by avoiding elevation fees at primary elevators.
Those benefits include “virtual blending” of grain, which provides producers with guaranteed grade and protein contracts and pays out 90 percent of the value of the grain within days of shipment.
“Any industry is well served by competition,” said Lobdell. “Our job is to try to be on the leading edge of that.”
