To the Editor:
After a disastrous grain handling and transportation season in 2013-14 which cost prairie producers some $5-billion in losses, it’s been quieter this winter. But things may be about to heat up.
Last fall’s “new crop” did not produce another all-time record volume, but with the previous year’s carryover the total amount to be moved this season is still close to the same tonnage that triggered such chaos a year ago. And due to highly variable growing conditions, the quality this year is also highly variable and therefore logistically more complicated to ship. Thank goodness we haven’t had a harsh winter.
When asked how they’re doing, the railways say things are pretty much “back to normal”, or at least better than last year. Overall the volume shipped is up. And recent comments from Transport Minister Lisa Raitt suggest the Harper government is content with what they see.
But farmers are not. Looking at the bulk tonnages moved over a week ... or a month ... or a crop-year fails to tell the whole story. A recent report published by a collection of farm organizations, called the “AG Transport Coalition” (ATC), has examined railway performance from the on-the-ground perspective of the shipper.
It’s not sufficient just to “move grain”. The detail matters. It must be moved in a timely manner, in response to shipping orders, to get the right product at the right export position just in time to fill the right vessel for the right customer at the right price.
Grain moves along shipping “corridors” headed west, east, south and north. Some is destined for overseas, some into the US, some for domestic buyers. Some originates along main railway lines and some from community-owned shortline operators. Some is delivered through grain companies (mostly multinational corporations), some through farmer-owned inland terminals, some is delivered directly into “producer” railcars by farmers themselves.
Depending on geography, different producers use different corridors. They all want to take maximize advantage of market opportunities. But they’re not all treated equitably.
The railways provide the best service on big bulk shipments that are easy to handle -- e.g., hundred car trains moving west from Alberta to Vancouver. But farmers using other “corridors” -- like Saskatchewan producers who want to ship south or those along a shortline -- find their rail services decidedly substandard. One size does not fit all.
The basic railway approach to grain was amply demonstrated in remarks to his shareholders last year by the CEO of CP Rail.
He acknowledged the transportation trouble affecting grain, but suggested his shareholders needn’t worry. Grain is a captive commodity. Farmers have no competitive, commercial, regulatory or legal alternatives. The grain will always be there for the railways to move eventually. And they will always get paid in full. So time is not of the essence.
But that’s not how farmers see it. The timeliness of service makes a big difference to them. And this week’s ATC report shows big discrepancies. So far in this crop year, the railways have supplied in the week they were ordered only 50% of the hopper cars their customers called for. In total, they are 11,461 cars behind. The corridor into the US is especially weak, possibly costing sales.
The ATC plans to track and report on performance from the shippers’ perspective every week. Such objective, credible, accurate information, collected and published frequently by an independent authority, is essential in holding railways, grain companies and others in the logistics chain to account. It should also compel the Government of Canada to address obvious defects in public policy.
The deficient grain handling and transportation system that exists today is this government’s creation. They designed it like this. Inadequate capacity. No surge capabilities. No provisions to deal with exigencies like bad weather.
There’s no clear definition of what constitutes proper service and how it’s measured. No mechanism to achieve common-sense coordination in a complex logistics chain -- there’s no quarterback calling plays. No requirement for equitable treatment among corridors.
The shippers are captives with no competitive commercial alternatives and no legal recourse when the system fails. The recent fines imposed on the railways (and paid to the government, not farmers) are largely meaningless tokens. What farmers need is an expeditious way to get liquidated damages to offset their losses when others screw-up.
Congratulations to the ATC for a worthy initiative.
Ralph Goodale
Member of Parliament for Wascana
