Small shippers say new railway discounts encouraging the movement of grain in large car blocks is another way of further rationalizing the grain handling business.
“It’s the big boys wanting to push their weight around,” said James Woodworth, chair of the Prairie Producer Car Shippers Association.
“Between the four biggest grain companies and the two railways, I’m sure they would all like to have just three elevators each and download costs onto the farmers.”
CN Rail and CP Rail have increased some discounts and left others unchanged on 50-,100- and 112-car blocks. Discounts on 25-car blocks have been eliminated by both carriers.
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The new rates could accelerate a rapidly growing trend toward bulk grain moving in larger blocks of rail cars.
“It’s the bigger companies being able to use their market force to try and further disadvantage the small- or medium-sized shippers,” said Woodworth.
He’s not too concerned about the elimination of the discount on 25-car blocks because most producer car shipments are smaller than that.
“We’re certainly concerned with the single rate far more than this multi-rate,” he said.
The same can be said for pulse processors who ship peas to export position in bulk loads.
“The 25-car rate that was developed was never going to work for the special crops shippers because it had too many strings attached to it,” said Francois Catellier, executive director of the Canadian Special Crops Association.
To qualify for the discount, processors had to load all 25 cars at one facility and deliver them to a licensed terminal at export position.
Catellier said it would have worked better if plants could have used different stops along the line to amass the necessary number of cars and to deliver them to places like stuffing facilities at export position.
He said the current incentives are elitist.
“There’s only a handful of large grain companies and perhaps some of the alfalfa shippers that can play ball. It certainly doesn’t address the needs of the small- to medium-sized shippers.”
But not all shippers outside the mainstream elevator network are upset with the new incentive program. Weyburn Inland Terminal will be taking advantage of CP’s $1 per tonne increase on 112-car blocks.
“We have no problem with it. If there is an efficiency gain there we certainly feel it’s appropriate that we shippers share in it,” said chief executive officer Rob Davies.
“In our view a bigger, higher car (discount) is better for our business and a better reward for the investment we’ve made.”
