Problems with rail service in Canada have prompted outcries from the agricultural sector who say they pay a financial price..From January 2 to April 2, the car fulfillment delivery rate was 53% for the Canadian National Railway (CN) and 65% for Canadian Pacific Railway (CP). .Wade Sobkowich, executive director of the Western Grain Elevator Association, wrote the Canadian Transportation Agency to request an investigation. However, the CTA refused, pointing to fulfillment rates above 70%for the crop year as a whole..“It is a disappointment for sure,” Sobkowich said of the CTA’s response..“We feel the issue is systemic. If you compare rail service that we've been receiving to what the railways had promised to provide at the beginning of the year, we weren't able to get the service that we needed, even though it was a much smaller crop than what is normal.”.WGEA member companies paid $16 million in vessel demurrage fees and contract extension penalties between Aug. 1, 2021, and Jan. 31, 2022. Delayed deliveries in January and February left ships moored near the west coast for up to 30 days. Sobkowich says the railway companies are fixed on 100% asset utilization and maximizing operation expense ratios instead of meeting the ag sector’s needs in a timely way..“If the government were to hold the railways accountable to meeting the numbers in their grain plans, that would go a long way,” Sobkowich said. “They'd have to make sure they have crews in place and assets in place to meet the service needs of the grain industry.”.Greg Gormick, a rail analyst and policy adviser with On Track Strategies, believes Ottawa needs to investment in rail infrastructure and implement regulations that demand better performance. .“We've got capacity going to waste on CP and being damaged because they keep stripping assets, ripping out sidings and things. And CN can't keep up with the financial demands of expanding their capacity. You can't run long trains of 12,000 feet when you've got 5,000 foot sidings,” Gormick said..“China has put a lot of weight on the quality of its transportation system, the railways, the ports. This is important. We've let it go. There needs to be an investigation of not just the railway situation, but the whole transportation system.”.Gormick believes politicians in previous decades had more esteem for the railways, and that billions of tax dollars that went to the airline industry during the pandemic would have been better spent on railroads..“So much for sunny ways, sunny days Trudeau. They're not doing anything. Do they even know what goes on? Do they care? Would they understand that if we explained it to them? That's my greatest fear. And my answer, unfortunately, is no, they don't understand it. They don't understand it at all.”.Quorum Corporation which monitors grain shipments, reported that from August through April, western grain spent 62 days in the system, a 47.6% increase over last year. Meanwhile, the volume of grain shipments by rail was down 42%..Quorum president Mark Hemmes said grain shipments started well at the start of the crop year but only returned to its regular rhythms in recent weeks..“They've had some real struggles, the floods in November and cold weather in the winter, so I was giving them a little bit of a break on that. When it comes to moving bulk grain, their performance hasn't been too great,” Hemmes said..“That concerns everybody because we're talking about a crop that was 40% lower than what last year was and 35% lower than what the average is. So if they can't move traffic under those conditions, what's going to happen in the fall when we have a normal crop?”.Hemmes says eastern farmers have much less to worry about..“If you're growing grain in the West, probably between 60 and 70% is grown for export purposes. It's the inverse in Eastern Canada, probably 80% of everything that they grow on the East is being used domestically. And when it does go for export, the vast majority of it gets trucked to the port location, whether that's in Hamilton or Montreal or Quebec City.”
Problems with rail service in Canada have prompted outcries from the agricultural sector who say they pay a financial price..From January 2 to April 2, the car fulfillment delivery rate was 53% for the Canadian National Railway (CN) and 65% for Canadian Pacific Railway (CP). .Wade Sobkowich, executive director of the Western Grain Elevator Association, wrote the Canadian Transportation Agency to request an investigation. However, the CTA refused, pointing to fulfillment rates above 70%for the crop year as a whole..“It is a disappointment for sure,” Sobkowich said of the CTA’s response..“We feel the issue is systemic. If you compare rail service that we've been receiving to what the railways had promised to provide at the beginning of the year, we weren't able to get the service that we needed, even though it was a much smaller crop than what is normal.”.WGEA member companies paid $16 million in vessel demurrage fees and contract extension penalties between Aug. 1, 2021, and Jan. 31, 2022. Delayed deliveries in January and February left ships moored near the west coast for up to 30 days. Sobkowich says the railway companies are fixed on 100% asset utilization and maximizing operation expense ratios instead of meeting the ag sector’s needs in a timely way..“If the government were to hold the railways accountable to meeting the numbers in their grain plans, that would go a long way,” Sobkowich said. “They'd have to make sure they have crews in place and assets in place to meet the service needs of the grain industry.”.Greg Gormick, a rail analyst and policy adviser with On Track Strategies, believes Ottawa needs to investment in rail infrastructure and implement regulations that demand better performance. .“We've got capacity going to waste on CP and being damaged because they keep stripping assets, ripping out sidings and things. And CN can't keep up with the financial demands of expanding their capacity. You can't run long trains of 12,000 feet when you've got 5,000 foot sidings,” Gormick said..“China has put a lot of weight on the quality of its transportation system, the railways, the ports. This is important. We've let it go. There needs to be an investigation of not just the railway situation, but the whole transportation system.”.Gormick believes politicians in previous decades had more esteem for the railways, and that billions of tax dollars that went to the airline industry during the pandemic would have been better spent on railroads..“So much for sunny ways, sunny days Trudeau. They're not doing anything. Do they even know what goes on? Do they care? Would they understand that if we explained it to them? That's my greatest fear. And my answer, unfortunately, is no, they don't understand it. They don't understand it at all.”.Quorum Corporation which monitors grain shipments, reported that from August through April, western grain spent 62 days in the system, a 47.6% increase over last year. Meanwhile, the volume of grain shipments by rail was down 42%..Quorum president Mark Hemmes said grain shipments started well at the start of the crop year but only returned to its regular rhythms in recent weeks..“They've had some real struggles, the floods in November and cold weather in the winter, so I was giving them a little bit of a break on that. When it comes to moving bulk grain, their performance hasn't been too great,” Hemmes said..“That concerns everybody because we're talking about a crop that was 40% lower than what last year was and 35% lower than what the average is. So if they can't move traffic under those conditions, what's going to happen in the fall when we have a normal crop?”.Hemmes says eastern farmers have much less to worry about..“If you're growing grain in the West, probably between 60 and 70% is grown for export purposes. It's the inverse in Eastern Canada, probably 80% of everything that they grow on the East is being used domestically. And when it does go for export, the vast majority of it gets trucked to the port location, whether that's in Hamilton or Montreal or Quebec City.”
