Grain Volume Requirement

[Hopalong]

Pretty much ho hum announcement.
Minimum volume requirement for rail shipping has been extended through March but at reduced levels.
Govt also says it expects better service from railways in serving all corridors and shippers but does not sound like an order.
Wonder if it will satisfy those who said just extend it.

[joedales]

Government of Canada to maintain minimum grain volume requirements for railways.

Agriculture Canada News

Measure to ensure efficient and predictable movement of grain through winter

November 29, 2014 – Ottawa – Transport Canada & Agriculture and Agri-Food Canada

Transport Minister Lisa Raitt and Agriculture Minister Gerry Ritz today announced that minimum grain volume requirements will be extended until March 28, 2015. This measure, initially introduced in March 2014, will help to maintain Canada's reputation as a reliable supplier to world markets.

The government has put in place volume requirements that are designed to move the remainder of last year's crop along with this year's crop and ensure that the grain supply chain will return to normal operations. Ministers expect railways to provide reliable and predictable service to all shippers, all destinations, and throughout all corridors, as is their obligation as common carriers.

Under the new Order in Council, which takes effect on November 30, 2014, Canadian National Railway Company and Canadian Pacific Railway Company must each move the following amounts of grain:

Time period Metric tonnes per week
Nov. 30, 2014 to Dec. 20, 2014 345,000
Dec. 21, 2014 to Jan. 3, 2015 200,000
Jan. 4, 2015 to Feb. 21, 2015 325,000
Feb. 22, 2015 to Mar. 21, 2015 345,000
Mar. 22, 2015 to Mar. 28, 2015 465,000

The Order maintains direct legal obligations on railway to move grain and could result in penalties for non-compliance of up to $100,000 per violation. The requirement for railways to report on demand and volume remains in effect.

To further support the efficiency of the grain supply chain, the government expects both Canadian National (CN) and Canadian Pacific (CP) railways to submit formal winter contingency plans to the Government of Canada. This is to include service plans for producer car loaders and short line railways for the remaining crop year.

In order to expand transparency in the logistics system, railways are also expected to provide information on car order fulfillment by corridor, including the placement of rail cars at producer car loading sites and along short line railways to the Grain Monitor.

The government continues to call on all parties in the grain supply chain to work together to develop solutions to ensure the timely movement of grain.

Quick Facts

• On March 7, 2014, the government introduced an Order in Council (OIC) for a period of 90 days, to set out minimum volumes of grain to be moved by CN and CP each week, and requiring the railways to report on those weekly shipments.
• The Fair Rail for Grain Farmers Act, enacted in May 2014, extended the minimum volume requirements of 500,000 metric tonnes per week to the end of the 2013-14 crop year.
• On August 1, a second OIC was introduced requiring CN and CP to each move 536,250 metric tonnes of grain per week until November 29, 2014. Regulatory changes were also introduced to facilitate better monitoring of the overall performance of the rail-based grain supply chain, to clarify the operational terms in service level agreements and to increase competition among railways by extending the limit for rail interswitching in the Prairie provinces.
• The total grain supply for the 2014-15 crop year is estimated to be 71.8 million metric tonnes; this includes a crop estimated at 56.4 million metric tonnes and a carry-over from the 2013-2014 crop year of approximately 15.4 million metric tonnes.

Quotes

"Our government has again acted to ensure the supply chain operates effectively in delivering Canadian grain to market. Railways, shippers and producers must work together and meet these new requirements."
- Transport Minister Lisa Raitt

"Our government continues to act to ensure that grain and all commodities get to market in a timely manner. We continue to call on all parties in the grain supply-chain to work together to ensure the efficient movement of grain to markets through the winter."
- Agriculture Minister Gerry Ritz

[bucket]

I realize the volumes would go down due to the winter issues.

It's good news but have they finished up on the fines from last summer?

Any progress on level of service agreements so the railways start paying their part in demurage charges instead of farmers.

My local says they might load one more train prior to the new year.

[joedales]

Alberta Wheat Commission pleased with the extension of minimum volume requirements for grain movement by rail.

FOR IMMEDIATE RELEASE

(Calgary, Alberta), November 30, 2014 – The Alberta Wheat Commission (AWC) is pleased with the announcement from Agriculture and Agri-Food Canada (AAFC) and Transport Canada that the minimum volume requirements for the movement of grain by rail will be extended until March 28, 2015 under the Order-In-Council.

AWC has lobbied to keep the order in place until such time as rail companies can be held accountable for their performance through mechanisms such as the mandatory inclusion of reciprocal penalties in service level agreements. The extension will help avoid a repeat of the transportation backlog of last winter that cost prairie famers billions of dollars in lost profits and compromised Canada’s reputation as a reliable supplier of grain.

“Ministers Raitt and Ritz have shown great support for our industry and we thank them for listening to the concerns of farmers,” said Kent Erickson, Chair, Alberta Wheat Commission. “Extending the minimum volume requirements through the coming winter and spring season will keep the grain moving as we continue to work toward our goal of a sustainable and reliable transportation system.”

AWC is also pleased that the railways will be required to submit formal winter contingency plans as well as efforts to improve railway movement by corridor and service to producer car loading sites and shortline railways.
AWC acknowledges that the minimum volume requirements are not a long-term solution and will continue to press for reforms to Canada’s grain transportation system through the
Canada Transportation Act (CTA) Review.

“We will continue to voice our opinion on what we believe is the most critical mechanism to ensure that railways are held accountable for their performance through the inclusion of reciprocal penalties in Service Level Agreements,” Erickson added.

The Alberta Wheat Commission is a producer-directed organization representing the interests of and serving as a single voice for all of Alberta’s 14,000 wheat producers.

www.albertawheat.com