Provincial governments seek rail service improvements for export grain

The governments of Alberta and Saskatchewan are calling on the Canadian government to increase railroads' accountability for a grain-movement backlog in Western Canada.

The Saskatchewan government wants the feds to immediately oversee negotiations between grain companies, CN and Canadian Pacific to establish parameters for moving grain from production points to ports for export. The Canadian grain industry is dealing with a bumper crop.

During meetings held last week, CN and CP officials indicated they're prepared to negotiate and sign level-of-service agreements with grain shippers that would include reciprocal penalties, and the provincial government is asking the federal government to ensure that happens, said Saskatchewan Economy Minister Bill Boyd in a press release issued yesterday.

"[The Class Is] assured us they are ramping up to have thousands more grain cars per week taking grain to ports, and this will be sustained until at least December," he said. "Grain companies told us they could quickly move to provide service 24 hours a day if the grain reaches them."

The Saskatchewan government plans to closely monitor transit levels to ensure they're reduced as grain-car movement improves, said Boyd. The provincial government supports the federal government's effort to bring more transparency and accountability into the grain transportation system, such as weekly reporting requirements for car spots, loading at country elevators, car deliveries to ports and unloading reports from ports.
 
"We would also like to see the Canadian Transportation Agency have the ability to independently investigate grain movement before a formal complaint is filed," said Saskatchewan Highways and Infrastructure Minister Don McMorris.

Alberta government officials believe the weaknesses now apparent in Canada's grain transportation system need to be fixed.

"While this year’s harvest was exceptional, higher yields are becoming the new norm in Western Canada and the problem will continue to grow unless appropriate steps are taken," said Alberta Premier Alison Redford in a prepared statement.

Railroads aren't assessed penalties if they fail to meet delivery obligations, and "that needs to change," said Alberta Minister of Agriculture and Rural Development Verlyn Olson.

"The consequences of poor service need to be shared by all to ensure our products move to port as quickly and efficiently as possible," he said.

CN is doing its best to move the 100-year grain crop to export points, said spokesman Mark Hallman in an email. The Class I plans to lift its performance, as soon as extreme cold temperatures abate, to return to a more normal winter spotting performance of 4,000-plus cars per week, he said. CN last week spotted 3,530 empty grain hoppers at country elevators for loading despite extreme winter conditions.

"CN has another 500 hopper cars coming on stream, and it is lining up the required crews and locomotives to spot as many as 5,500 cars per week at country elevators once the Port of Thunder Bay reopens, likely in early April," said Hallman. "Grain elevators draw around 1,000 CN hopper cars per week toward that gateway."

A record spotting performance will enable CN to remain in synch with grain elevator capacity at main Canadian port gateways and draw down on the grain backlog, he said.

"CN has supply chain collaboration agreements with some grain companies that set out performance standards and promote end-to-end supply chain information sharing," said Hallman.