Car allotment | Increased traffic to Vancouver means railways aren’t servicing orders to the U.S. and Mexico
Canada’s grain shipping mandate is prompting railways to discriminate against eastern and southern movement of grain, says Pulse Canada.
“Shippers are being told that orders destined for the eastern corridor, the U.S. and Mexico will not be filled as those are not preferred corridors,” Greg Cherewyk, chief operating officer of Pulse Canada, recently told the Senate agriculture committee.
Canadian National Railway and Canadian Pacific Railway are primarily interested in transporting grain to the Port of Vancouver to meet their statutory obligations of each shipping 500,000 tonnes of grain per week.
Read Also
Agri-business and farms front and centre for Alberta’s Open Farm Days
Open Farm Days continues to enjoy success in its 14th year running, as Alberta farms and agri-businesses were showcased to increase awareness on how food gets to the dinner plate.
As a result, pulse and special crop exporters say they have been shut out on orders destined for Mexico and the United States, which are important markets for their commodities.
“That part of the special crops business is being damaged so badly it may never recover,” said Cherewyk.
CP planned to supply 70 percent of the orders destined for the U.S. and Mexico in the eight weeks after the government’s order-in-council was implemented, while CN planned to supply 25 percent of the rail cars ordered for those destinations.
Meanwhile, both railways planned to supply more than 100 percent of orders destined for Vancouver.
“I would think the (agriculture) minister would have to agree that the order-in-council, while it was designed to get grain moving, also is designed to ensure that all shippers of Canadian grain and all customers of Canadian grain receive fair and equitable service,” said Cherewyk.
David Nobbs, general manager of Canpulse Foods, is a special crops shipper that has been directly affected by the increased emphasis on west coast movement.
“(The railways) are trying to catch up and turn around and they have basically neglected the Mexican market,” he said.
“They’ve said turn-around times to go to Mexico are too long and we can’t ship product there.”
Canpulse Foods processes canaryseed, and Mexico is the top customers of that crop, so it is frustrating that the railways refuse to ship to that important market.
“They’ll let us order cars there, but they’re not allocating any cars to Mexico,” said Nobbs.
Cherewyk said the railways haven’t added additional capacity to meet the government-imposed mandate. They are simply reallocating existing capacity, which has dire consequences for certain transportation corridors.
“We’re seeing contracts that aren’t being fulfilled and customer relationships that are at risk,” he told the Senate committee.
“So when those Canadian shippers are told that those are not preferred corridors and that they shouldn’t bother ordering for delivery through those corridors, they’re being told that they can’t service those customers and they’re being told that those contracts are in jeopardy. That’s what they’re facing today.”
Cherewyk said the government needs to establish clear expectations for grain shipments through all corridors. He said senator Don Plett has told him that is in the works for the next order-in-council, but Cherewyk said there also needs to be a mechanism for measuring whether those expectations are being achieved.
“This system has to be put in place immediately so that we ensure all Canadian businesses and their customers are receiving fair and equitable service and that an OIC is not used as the basis for discrimination,” he said.
