The extreme winter that has been blamed for slow grain movements by rail could get in the way of moving Western Canada’s record crop through the Great Lakes and St. Lawrence Seaway, which remain choked by ice.
Canadian National Railway Co. said that as grain shipments to the West Coast increase as winter eases, terminals there could fill up before the Port of Thunder Bay, on Lake Superior, reopens for the season.
“The Great Lakes have been frozen over by this winter’s polar vortex to a degree not seen in several decades,” Claude Mongeau, CN’s chief executive officer, said in a statement. “We need urgent support from the Canadian Coast Guard to open navigation channels if we are to meet the federal government’s order-in-council requiring CN to move 500,000 tonnes, or close to 5,500 cars of grain per week.”
CN and rival Canadian Pacific Railway Ltd. have been ordered by the federal government to move a combined one million tonnes of wheat, canola and other grains each week beginning April 7.
The 90-day order was made after months of service complaints from grain growers and the companies that trade the crop, which is about 40-per-cent bigger than that of the previous harvest.
The grain industry blames railway cost cuts and a focus on other commodities, such as crude oil. Railways say it has been impossible to keep up with the massive crop during the coldest winter in years, which has forced it to run shorter trains for safety and slowed traffic.
The federal government says it will soon introduce legislation that will address the grain backlog, but has not provided details. Agriculture Minister Gerry Ritz said the railways “dropped the ball,” a tone that helped anger the railways.
CN calls the “finger-pointing” unproductive. CP CEO Hunter Harrison recently said the government’s criticism made him “irate.”
The grain backlog has dampened grain prices in Western Canada, as grain companies have cut their bids or stopped buying altogether. Some lending institutions have been making allowances for cash-strapped farmers who cannot sell enough of their crop to pay for the seeds they need to begin planting in a few weeks.
CN delivered more than 4,400 grain cars to elevators in the Prairies last week, 23-per-cent more than the weekly average during the winter, spokesman Mark Hallman said.
CN has recently increased its number of train crews by 5 per cent, add 10 per cent more locomotives and added 500 grain cars on top of the 500 added last September when the size of the crop became known.
“We’re doing well, but it’s going to take everybody in the supply chain, not just the railways,” Mr. Hallman said.
CN isn’t the only business urging the federal government to deploy more ice breakers to open the country’s main shipping route to the East Coast, which is under the thickest ice cover in years.
The Canadian Shipowners Association has said it fears the Coast Guard does not have enough ice breakers to maintain the route for goods such as iron ore, salt and petroleum products.