Special crops movement has ground to a halt for many processors in the wake of a strike at Canadian National Railway.
“Our companies are reporting zero percent allocation right now. There are no rail cars for pulse and special crops shippers,” said Greg Cherewyk, director of market development for Pulse Canada.
He said his e-mail inbox is flooded and his phone has been ringing off the hook with desperate processors saying they are being forced to close, lay off employees and delay paying farmers for the product they deliver.
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“The situation is absolutely out of control,” said Cherewyk.
“It is condition critical for this industry right now.”
Even before 2,800 CN conductors and yard switchers walked off the job on Feb. 10, Parent Seed Farms in St. Joseph, Man., was receiving what it considers substandard rail service from CN.
Commodity broker Bruno Sabourin estimated the company usually receives about 75 percent of the cars it needs and 30 percent of those are unsuitable for shipping beans, lentils, chickpeas, flax and canaryseed, which the company regularly exports.
“We’re not shipping scrap metal here,” said Sabourin.
Since the strike began, the situation has deteriorated. None of the 12 hopper cars Parent Seed has requested over the past three weeks has arrived.
The company has been forced to fulfil a contract with a U.S. customer by loading four trucks with 90 tonnes of beans, adding $7,500 in unforeseen costs.
“If the strike drags on long enough, it works back to the producer and the bids start falling,” warned Sabourin.
The plight of special crops processors is similar across the Prairies. A Saskatchewan firm is sending 1,500 tonnes of lentils to the Port of Vancouver on a fleet of 37 trucks, a cost-prohibitive solution to its transportation woes.
“This is unsustainable for our pulse and special crops industry,” said Cherewyk.
Government officials have told Pulse Canada they are unable to intervene in the strike. But Cherewyk said Ottawa must work to resolve it, and also recognize that the problem goes well beyond that.
Special crops firms have been complaining about abysmal rail service for years. As recently as January Cherewyk spoke to a major shipper who was receiving only 10 percent of his rail car allocation.
Sabourin said it takes twice as long to get a ship loaded in Montreal than it did when he started in the business seven years ago. Labour and weather disruptions exacerbate what is already unacceptable service.
When Pulse Canada polls its customers, Canada consistently ranks as the most unreliable and inconsistent shipper of special crops. Customers report better service from notoriously unreliable shippers like India and Pakistan.
What the industry needs from government is legislation assuring that railways will be held accountable for poor performance, said Sabourin and Cherewyk.
The Coalition of Rail Shippers has proposed a series of amendments to the Canada Transportation Act that would accomplish that goal. Transport Canada and the minister of transport agreed to the changes last May but appear now to be backing away.
“The process has been scuttled by the railways,” said Cherewyk.
While his association continues to lobby Ottawa for solutions, Sabourin faces the prospect of many more weeks without any rail service.
“It’s just so frustrating to have to deal with that,” he said, adding that any wage increase negotiated by the United Transportation Union will likely be passed along by CN in the form of rate increases.
Meanwhile, Canadian Pacific Railway has declared force majeure on shipments to some Vancouver terminals because of traffic tie-ups caused by the CN strike. Force majeure implies that the railway is not responsible for delays and therefore no penalties should be applied.
