Grain growers and shippers complain they aren’t getting good service from the railways. If so, they soon might be able to prove it.
The grain industry is launching a program to track wheat, corn, soy and other commodities from the field to the elevators and coastal export ports via the railroads. The information will be used to measure and compare services in all parts of the supply chain while giving leverage to shippers negotiating rail contracts and even building cases for service complaints.
“If you can’t measure it, you don’t know where you are. And if you don’t know where you are, you can’t put a plan in place to get to where you need to be,” said Wade Sobkowich, executive director of the Western Grain Elevator Association.
The harvest of corn, wheat, soy and other grains rose by as much as 30 per cent in 2013, thanks to good weather and improved growing techniques. But farmers and elevator companies that move grain to ports say rail shipments have not kept up, and they are forced to store crops and miss out on strong market prices.
The grain industry says the lack of rail capacity is being felt in many ways, from livestock feed supplies in parts of B.C. to the total $20-million in fees shippers have paid for vessels waiting to load in ports.
Grain Growers of Canada has been leading the call for improved rail service, and recently urged Agriculture Minister Gerry Ritz to address farmers’ concerns.
“Rail service in Canada is rapidly becoming a pressing and urgent concern. A huge amount of grain is moving this year; however, much more grain needs to move,” wrote Grain Growers president Gary Stanford, who called the larger 2013 crop “the new normal,” thanks to improved plant genetics and farming practices.
“Prairie farmers are reliant on railway transportation to get their crops to port. Food manufacturers also rely on rail for the delivery of farmers’ crops to keep their processing facilities in operation. Rail service along the entire supply chain plays an important role ensuring that food is available on store shelves for Canadian consumers.”
Canadian National Railway Co. and Canadian Pacific Railway Ltd. have both said they are working hard to move the record crop, and that adding more cars to the rail system would only increase congestion. “The key to an optimal grain supply chain is having all supply chain partners coming together to maximize end-to-end throughput on a consistent basis,” CN spokesman Mark Hallman said in an e-mail.
Mr. Sobkowich says it is too soon to say if the companies he represents will file a service complaint with the Canadian Transport Agency against CP and CN.
In a sign that a faceoff before the shipping watchdog could be avoided, growers met in Winnipeg on Tuesday with railway officials and Mr. Ritz to discuss ways to clear the backlog of crops.
“We need to get the grain moving because many farmers may not be paid for last year’s harvest until after spring planting,” said farmer Kyle Friesen, president of the Manitoba Pulse Growers Association. “This is already causing lost sales, things need to improve otherwise this will translate into a serious cash flow issue for farmers when they need to buy seed and inputs this spring.”