Railways must do better on grain transport issue: Ritz
By Amanda Stephenson, Calgary Herald January 23, 2014 5:01 PM
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CALGARY - Railroad companies need to “pick up their game” and do a better job of transporting Canadian grain in the aftermath of 2013’s record harvest, federal Agriculture Minister Gerry Ritz told a Calgary audience Thursday.
But the head of a major Alberta farm organization said government needs to do more — adding a $3 million study announced earlier this week will do little to address the short-term needs of farmers who can’t get their product to market.
In a speech to the Calgary Chamber of Commerce, Ritz said the government is “working in lockstep” with producers, grain companies, and railroads to find a solution for the backlogs that have left as much as 3 million tonnes of wheat and canola stuck on the Prairie. Many grain companies are no longer buying because they can’t find the rail cars to transport the product, and that means some farmers are stuck with a commodity they can’t sell.
“The grain movement is still ahead of last year’s pace ... At the same time, the supply chain must pick up its collective game,” Ritz said. “There’s transformative change needed at every step along the way.”
Earlier this week, the federal government announced it would provide half of the funds for a five-year, $3 million study — to be headed by farm groups — in the hope of finding a solution to the problem.
But Lynn Jacobson, president of the Alberta Federation of Agriculture, said a study likely won’t reveal anything farmers don’t already know.
“We know the facts and figures, we know what the system is performing at and where the bottlenecks are,” Jacobson said. “I would question why we’re doing this. Is it just a delaying tactic? What it comes down to, I think, is there’s got to be some penalties on the railways for not performing.”
Ritz said Canada already has a Fair Rail Freight Service law, which sets out an arbitration process for customers who feel they’ve been treated unfairly by a railroad company. He added while the $3 million study aims to find long-term solutions, there is immediate help available for farmers with stalled grain.
“We have cash advances at the federal level, $400,000 per farm unit, with the first $100,000 interest-free,” Ritz said. “And of course, Farm Credit and a few of the lending institutions have already come out and said, ‘Look, if you’re having a tough time, come and talk to us.’ ”
Statistics Canada data shows Canadian railroads shipped 34 per cent more cars of fuel oils and crude petroleum in October than a year earlier, and twice the amount shipped in October 2011. Carloads of crude oil surged to 53,453 in 2012 from 143 in 2009, according to Transport Canada.
But Ritz said he doesn’t believe that oil is displacing grain on the rails.
“I don’t buy that for an instant,” he said. “There are other commodities on the track, always have been. Grain has always competed with potash, with coal, with timber ... even containers.”
CN Rail spokesperson Mark Hallman said grain-car deliveries to West Coast port terminal elevators are on pace to match or exceed the all-time record set in 2012/13. In an emailed statement, Hallman said the railway ramped up quickly to meet higher demand in the fall, but performance has been affected by the extreme cold weather plaguing large parts of the U.S. and Canada.
“CN is suffering as much as grain producers, if not more,” Hallman said. “CN is incented by commercial forces to move products as efficiently as possible.”
Ed Greenberg, spokesperson for Canadian Pacific, said grain is the company’s single largest commodity and very important. He said CP’s grain loadings are about 10 per cent higher than last year and 15 per cent above the five-year average.
“With this record demand, it is an ongoing, week-to-week process with CP officials working directly with shippers,” Greenberg said. “Our railway is ready to work with the federal government and stakeholders at making Canada’s grain handling and transportation system stronger.”
By Amanda Stephenson, Calgary Herald January 23, 2014 5:01 PM
0
CALGARY - Railroad companies need to “pick up their game” and do a better job of transporting Canadian grain in the aftermath of 2013’s record harvest, federal Agriculture Minister Gerry Ritz told a Calgary audience Thursday.
But the head of a major Alberta farm organization said government needs to do more — adding a $3 million study announced earlier this week will do little to address the short-term needs of farmers who can’t get their product to market.
In a speech to the Calgary Chamber of Commerce, Ritz said the government is “working in lockstep” with producers, grain companies, and railroads to find a solution for the backlogs that have left as much as 3 million tonnes of wheat and canola stuck on the Prairie. Many grain companies are no longer buying because they can’t find the rail cars to transport the product, and that means some farmers are stuck with a commodity they can’t sell.
“The grain movement is still ahead of last year’s pace ... At the same time, the supply chain must pick up its collective game,” Ritz said. “There’s transformative change needed at every step along the way.”
Earlier this week, the federal government announced it would provide half of the funds for a five-year, $3 million study — to be headed by farm groups — in the hope of finding a solution to the problem.
But Lynn Jacobson, president of the Alberta Federation of Agriculture, said a study likely won’t reveal anything farmers don’t already know.
“We know the facts and figures, we know what the system is performing at and where the bottlenecks are,” Jacobson said. “I would question why we’re doing this. Is it just a delaying tactic? What it comes down to, I think, is there’s got to be some penalties on the railways for not performing.”
Ritz said Canada already has a Fair Rail Freight Service law, which sets out an arbitration process for customers who feel they’ve been treated unfairly by a railroad company. He added while the $3 million study aims to find long-term solutions, there is immediate help available for farmers with stalled grain.
“We have cash advances at the federal level, $400,000 per farm unit, with the first $100,000 interest-free,” Ritz said. “And of course, Farm Credit and a few of the lending institutions have already come out and said, ‘Look, if you’re having a tough time, come and talk to us.’ ”
Statistics Canada data shows Canadian railroads shipped 34 per cent more cars of fuel oils and crude petroleum in October than a year earlier, and twice the amount shipped in October 2011. Carloads of crude oil surged to 53,453 in 2012 from 143 in 2009, according to Transport Canada.
But Ritz said he doesn’t believe that oil is displacing grain on the rails.
“I don’t buy that for an instant,” he said. “There are other commodities on the track, always have been. Grain has always competed with potash, with coal, with timber ... even containers.”
CN Rail spokesperson Mark Hallman said grain-car deliveries to West Coast port terminal elevators are on pace to match or exceed the all-time record set in 2012/13. In an emailed statement, Hallman said the railway ramped up quickly to meet higher demand in the fall, but performance has been affected by the extreme cold weather plaguing large parts of the U.S. and Canada.
“CN is suffering as much as grain producers, if not more,” Hallman said. “CN is incented by commercial forces to move products as efficiently as possible.”
Ed Greenberg, spokesperson for Canadian Pacific, said grain is the company’s single largest commodity and very important. He said CP’s grain loadings are about 10 per cent higher than last year and 15 per cent above the five-year average.
“With this record demand, it is an ongoing, week-to-week process with CP officials working directly with shippers,” Greenberg said. “Our railway is ready to work with the federal government and stakeholders at making Canada’s grain handling and transportation system stronger.”