Hopper Car Fleet

[bucket]

Hobby

We are on the same page here.

1993 I was in calgary. A machine shop we were using there had the contract to re machine the wheels. It kept his shop busy and him wealthy. Nice guy.

Those rail cars are not worthless. And BTO said he could finance them himself.

[TOM4CWB]

Bucket,

The Federal Gov kept the Hopper Cars... and they are being maintained by the railways... at a reasonable rate... with a small attrition rate as they are written off in accidents.

The least cost solution in action.

[farmaholic]

(WINNIPEG) – The big railway companies are making over $100 million a year in unreasonably excessive returns at the expense of Canadian farmers. That is one of the key findings of an independent study commissioned by the Canadian Wheat Board, released today by Canadian farm organizations at a grain elevator near Winnipeg. Farmers are asking that the federal government now conduct a full rail costing review – something that has not been done since 1992.“We’re not against the railways making a profit. Everyone – farmers and rail businesses – needs to make profits to be sustainable. But one’s profit should not come at the other’s very large expense,” said Bob Friesen, President of the Canadian Federation of Agriculture. “At a time when the soaring cost of production is still interfering with the ability of farmers to profit from high commodity prices, $100 million in revenue lost on a runaway train is a big problem.”The Canadian Federation of Agriculture (CFA), the National Farmers Union (NFU), Keystone Agricultural Producers (KAP), the Agricultural Producers Association of Saskatchewan (APAS), Wild Rose Agricultural Producers (WRAP) and the Canadian Wheat Board (CWB) today held a joint press conference to call for a review and release the results of the report conducted by respected rail analyst John Edsforth.The study estimates that the railways in 2006-07 made $175 million (or $6.25 a tonne) more than what was considered fair and reasonable compensation for moving grain under the previous Western Grain Transportation Act, also know as the “Crow Rate” (repealed in 1996). This year, the Canadian Transportation Agency (CTA) found the railways had been allowed to earn revenue that was triple their actual costs for rail car maintenance and reduced the revenue cap for grain by about $72 million per year. A gap of at least $100 million remains, while the railways appeal aspects of the CTA ruling.“This study is setting off all the alarm bells for farmers. These results clearly show that something is not right with the revenue cap and the freight rates farmers are paying,” said Ian Wishart, KAP President. “Mechanisms like the revenue cap were meant to protect farmers. We need the government to step in, run the numbers and see if those mechanisms are serving farmers or if they need fixing.”CWB elected director Ian McCreary called the study results “shocking”.'It shows the railways earn far above what they would in a competitive rail market. As shippers, we need timely rail service, but we also require that the cost for that service is reasonable since we face greater distances to port than all the other grain exporters in the world.' To ship their grain, most western Canadian farmers are forced to use either a CN or CP rail line, creating a virtual monopoly over western rail transportation. Since 1992, the federal government has not conducted a full review of what it actually costs those railway companies to transport grains. As a result, railway costs used to calculate the revenue caps for grain freight are significantly out of date, failing to account for major reductions in grain elevators, rail track mileage, rail service and car supply over the past 17 years. Canadian farmers are calling on the government to conduct a full cost review in conjunction with an upcoming railway service review, in order to get an accurate and up-to-date picture of the true cost of shipping grains to determine freight rates for farmers more fairly.“The railways continue to charge farmers based on a cost picture that was taken 17 years ago,” said Glen Blakley, APAS President. “Railway profits have gone up while the level of service to farmers has gone down. It’s time to bring railway costs back to reality and rebalance the equation for farmers.”'It seems clear that railway earnings from grain transport are excessive particularly when farmers have been burdened with additional storage and trucking costs in effect paying twice for the railways efficiency gains. The railways have externalized costs to farmers and reaped the profits,' said Terry Boehm, NFU Vice President.Over the past year, the federal government has taken a couple of steps to address the transportation issue facing farmers. The freight revenue cap was adjusted to take into account actual maintenance costs for the hopper car fleet. The government also passed Bill C-8, addressing service issues in rail transportation.“I want to thank the government for the steps it has taken so far to help restore fairness to western grain transportation, and particularly Agriculture and Agri-Food Minister Gerry Ritz who met with national and western farm leaders earlier this year and offered his support for conducting a cost review,” said Lynn Jacobson, 1st Vice President of WRAP. “Farmers now need this government to take the next step and implement a full review of railway grain transportation costs.” - 30 -Download the backgrounder

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[farmaholic]

The coalition discovered that the railways were receiving far more money under the revenue cap for car maintenance than they were actually spending.The CTA confirmed the FRCC’s findings in a report showing that in 2004 the rail companies received $4,329 per car per year under the revenue cap to cover car maintenance expenses, but spent only $1,686, representing a total overpayment of $48 million.While the Conservative government rejected FRCC’s bid to buy the cars, it followed up on the maintenance costs issue.In June 2007 the federal transport minister asked the agency to adjust the volume-related composite price index to reflect actual rail car maintenance costs.In July the agency announced an interim decision that would reduce the freight rate by $2 a tonne for the 2007-08 crop year. That decision was appealed by both national railways to Federal Court of Canada and has been put on hold.In October the agency launched the review now underway.A number of industry groups filed submissions, including five producer groups, the governments of Alberta and Manitoba, the Canadian Wheat Board and the Western Grain Elevator Association.In general, those organizations rejected the arguments put forward by the rail companies and urged the agency to ensure that the railways’ compensation for maintaining rail cars be reduced to accurately reflect their actual costs.“Farmers have been overcharged for rail car maintenance and we are encouraged that this revenue cap review is an attempt to correct the situation,” said the submission by Keystone Agricultural Producers. “This is an extremely important issue for grain and oilseed producers.”A key question for the agency is the definition of maintenance and what kind of work should be included in calculating costs.Specific issues being reviewed include whether to include lubrication, inspection and air hose coupling when calculating maintenance costs, the appropriate level of contribution to railways’ constant costs, how to treat costs associated with closing hopper car gates and wheel replacement and whether to use specific railway cost data and industry standard rates to calculate actual costs.The CTA’s review has it origins in work done by the Farmers Rail Car Coalition in its unsuccessful effort to buy the government’s cars.The contentious issue of how much the railways should receive under the revenue cap to cover hopper car maintenance costs is nearing a resolution.The decision by the Canadian Transportation Agency is expected to save prairie farmers around $2 a tonne in freight costs in 2007-08 and beyond.The two national railways had untilDec. 5 to make their final arguments to the agency and both met the deadline.“It’s still our intention to issue a decision on or before Jan. 31, 2008,” said Jim Riegle, head of the CTA’s grain division.That ruling could be appealed to the Federal Court of Appeal or to the federal cabinet.The CTA’s decision is expected to cover three issues:The amount of money currently embedded in the grain revenue cap to compensate railways for car maintenance costs.The amount actually spent by the railways on car maintenance.A method for adjusting the revenue cap’s price index to reflect the difference between the embedded and actual costs, already estimated by the agency to be in the range of $65 to $70 million.The contentious issue of how much the railways should receive under the revenue cap to cover hopper car maintenance costs is nearing a resolution.The decision by the Canadian Transportation Agency is expected to save prairie farmers around $2 a tonne in freight costs in 2007-08 and beyond.The two national railways had untilDec. 5 to make their final arguments to the agency and both met the deadline.“It’s still our intention to issue a decision on or before Jan. 31, 2008,” said Jim Riegle, head of the CTA’s grain division.That ruling could be appealed to the Federal Court of Appeal or to the federal cabinet.The CTA’s decision is expected to cover three issues:The amount of money currently embedded in the grain revenue cap to compensate railways for car maintenance costs.The amount actually spent by the railways on car maintenance.A method for adjusting the revenue cap’s price index to reflect the difference between the embedded and actual costs, already estimated by the agency to be in the range of $65 to $70 million.

More history.... about 7 years ago.

[bgmb]

Tom, so the railways are basically using them and kind of keeping them able to roll.

Would be like me renting land for taxes.

What a great deal for the railways.

[bgmb]

Is this deal still going on



"OTTAWA, Ont.–The Government of Canada will retain ownership of its grain hopper car fleet.

In November 2005, an agreement-in-principle to lease the grain hopper car fleet to the Farmer Rail Car Coalition (FRCC) for five years was announced. The agreement would have led to a permanent transfer at the end of that period. However, a final agreement had not been concluded. The Government of Canada has now decided, after due consideration, not to proceed with the transfer of the cars to the FRCC but instead retain ownership of the fleet in order to maximize benefits for farmers and taxpayers.

“By retaining the hopper cars, the Government of Canada will ensure clear accountability and transparency for an efficient and effective grain handling transportation system,” Lawrence Cannon, Minister of Transport, Infrastructure and Communities, said in a release. “This new deal is a better deal on all fronts.”

Amendments to the Canada Transportation Act (CTA) were also introduced in the House of Commons to permit the Canadian Transportation Agency to adjust the maintenance costs in the maximum revenues the railways can earn from eligible grain shipments (revenue caps). This adjustment will apply to all hopper cars used in regulated grain service and will more closely align the costs in the revenue caps with the actual costs of maintaining the hopper cars in revenue cap service. Estimates show potential savings for farmers of approximately $2.00 per tonne.

“Farmers will benefit greatly from the government’s decision to keep the cars,” added Minister Cannon. “The amendments to the CTA will allow an adjustment to maintenance costs in the railways’ revenue caps for all hopper cars used in regulated grain service. The savings will allow farmers to see more profits in their business.”

Taxpayers will also benefit from this decision, Cannon said. Each year, the government collects between $10 and $15 million from the railways for their use of the hopper cars in non-regulated shipments of grain and other products. By keeping the cars, the government will continue to collect that revenue, which will be equal to, or could exceed, the proceeds from the proposed transfer of the hopper cars to the FRCC.

There are approximately 12,100 railway hopper cars in the Government of Canada fleet, which form the core of rolling stock used by Canadian National Railway and Canadian Pacific Railway to move western grain. These cars are provided at no cost to the railways for the transportation of grain from the Prairies to the ports of Vancouver and Prince Rupert, B.C., and Churchill, Man., for export, or to Thunder Bay and Armstrong, Ontario, for domestic or export purposes. The railways have day-to-day control of the cars and allocate them to grain shippers on a commercial basis. The Government of Canada receives annual alternate-use revenues from the railways when the cars are not used in regulated grain service, and for fees charged when shippers do not load or unload the cars promptly (demurrage).

With the decision to retain ownership of the fleet, the Government of Canada will also negotiate a new operating agreement and rail car refurbishment program with Canadian National Railway and Canadian Pacific Railway to ensure the rail cars remain in good and safe operating condition."

[bucket]

We are ****ed with Tom whispering in gerry's ear all the time.

Meanwhile short lines are waiting for cars.

Cheers and god bless blah blah blah. What a lark.

[TOM4CWB]

I am loading cars on our shortline.

While not perfect, we are moving grain to meet sales.

Did you go off your meds Bucket?

In our area where oil moves it looks like grain car service is also better served.
Cheers!
Enjoy life... You don't have to prove that you are the grinch, do you?
All the best in 2015!

[Braveheart]

As with any equipment we need for the production or movement of our crops, we don't need to own the equipment as long we have access to the equipment when we need it.

In fact, with the liability associated with accidents, derailments, etc., who wants the hassle?

[Braveheart]

I have the same experience as Tom. Just loaded 2 producer cars on a short line and they were on time.