WINNIPEG — Pressure is building for a federal government inquiry into the transportation crisis crippling exports from Canada for much of this crop year.
Industry groups such as the Canola Council of Canada, the Winnipeg Commodity Exchange and the Shippers and Exporters Association, have started lobbying the federal government for an independent review of the transportation system.
They are soon to be followed by the Vancouver Grain Exporters Association. It is finalizing a petition to the federal government calling for an investigation into the reasons for this year’s delays, and solutions for next year.
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George Powell, spokesperson for the Vancouver exporters, said demurrage, carrying charges and extension penalties have cost the canola export industry an estimated $30 million to date.
“Everybody had to curtail sales. People aren’t getting delivery of their products, whether it’s Japanese or European. Even sales to Mexico we’ve got coming up are going to be delayed,” Powell said.
As Canada’s largest exporter of non-board grains, XCAN Grain Pool Ltd. is one of the companies hardest hit by transportation problems.
“We are in danger of actually defaulting on contracts,” said Peter Lloyd, XCAN’s director of marketing. “These are sales that were made seven or eight months ago.”
Lloyd said it’s not unusual for vessels to pull away from Vancouver these days leaving behind a demurrage bill of $360,000 or more. XCAN has been waiting to load a ship which first pulled into port Jan. 22. The company is paying demurrage of $10,500 a day.
Powell said the delays are also costing farmers, as exporters reduce prices or stop buying altogether because they can’t get their product to market. But under the current system, the victims are paying.
“Where’s the accountability? This has not cost the railways one cent,” Powell said.
That could change this week as the Senior Grain Transportation Committee meets March 15 to examine whether the railways should be penalized under the Western Grain Transportation Act for failure to reach 95 percent of their performance targets. It would be up to the minister of transportation to impose the penalties if the committee recommends them.
The railways began falling behind west coast targets near the end of October. During the second quarter they were running at 75 percent of target at the West Coast and 82 percent of target at Thunder Bay.
The Shippers and Exporters Association also meets in Winnipeg March 15 to decide what it must do to convince the federal government that a review of the transportation network is needed.
Lloyd said the most disturbing thing about the situation is that no one is making sure it doesn’t happen again.
“I’m really concerned about the lack of action on this,” Lloyd said. “The Japanese crushing industry relies on Canadian seed for 90 percent of its requirements. It’s not good enough not to be able to supply.”
In a closed meeting with the canola council board of directors in St. Louis last week, the president of the Japanese Oilseed Processors Association said some of his members face plant shutdowns because of delays in canola shipments.
“It is beginning to force them to spend more effort developing alternative sources for canola,” said Dwight More, council president.
