If CN and CP are unable to move the grain themselves in a timely manner, then why not allow someone else to help? I like Mongeau and Harrison, but they’re way off on this one I think. They should welcome BNSF with open arms if they can help, anything to look after the customer. No intervention by the government should be required.
I notice the farmers want spare crews, locomotives, and cars sitting around in case they have a bumper crop, but they did not express any interest in paying for such goodies. Mac
Not really… the farmers just want their wheat moved and, of course, the rates for that are already in place. I don’t think they really care about spare locomotives or extra crews…the inner workings of their suppliers are none of their concern.
I understand that the railroads have had a tough winter and a bumper crop has made things worse. However, under the circumstances they should be welcoming help from others, not turning it away. The railroads are able to cooperate on joint ventures when it concerns them… maybe here’s anther opportunity. Open the field up to BNSF through more a liberal interchange and let them help. At the very least CN and CP will be seen to be doing everything possible to help, even if BNSF can only send two cars. Otherwise they look foolish… " Sorry due to circumstances beyond our control we cannot move your wheat in a timely manner and some will probably rot, but don’t let anyone else haul it…its ours to haul!" How dumb is that?
The government abandoned the rail system and built the Interstate Highway system. Farmers should call Congress and the trucking companies and ask where is the swift and efficient transportation system that Eisenhower promised. In the old days the farmers would band together, build a railroad and buy grain cars. Now they cry to congress. (And laugh all the way to the bank with their heavily subsidized market!)
CP and CN have no more capacity. Offering to add a BNSF train in the mix is silly!
CN and CP can take care of this surge in demand by raising the rate.
No, they can not raise the rate. That would be a free market response, so it is not allowed. Canada has a very different regulatory scheme for grain. Perhaps a Canadian can explain it. I can not. Mac
The article you linked is about moving Canadian wheat to ports, primarily West Coast ports for export. One key problem is that BNSF is also choked up [:'(] moving traffic to the west coast, and is having problems moving the business that it currently has.
For instance, see this article …
http://www.star-telegram.com/2014/03/18/5659053/bnsf-ceo-says-railroad-will-hire.html
Having additional grain from Canada just sitting on US rails probably isn’t going to impress those Canadian farmers very much.
Um, you realize we’re talking about Canada here, not the US? None of what you said applies here.
Every day our local paper runs stories about how BNSF has a shortage of locomotives, cars and crews, and cannot keep up with grain shipment in the upper plains. Perhaps BNSF should consider letting CN and CP help them haul the grain here? [:-,]
It seems to me, that this is supply and demand. I can’t see how shippers can expect railroads to utilize cars, locomotives and crews they don’t have. If this is such a lucrative business hauling grain, why don’t the truckers jump in and haul it with all the extra capacity they don’t have either?
Hi All
The thread Grain Complaints which addresses this problem also provides perspective. In Canada it’s not just the railways that are responsible for the backups. Canadian Ports are a Federal Responsibility. The Terminal elevators are private enterprises as are the railways. Making matters even more difficult are the other private trucking enterprises etc that do the drayage, longshoring etc within the terminals. They are all separate entities within the port organization and operational structure.
The most recent port stoppage (which was caused by the truckers strike) effectively throttled the PMV as an operating entity and has pointed out to all concerned just how tangled a Gordian knot is port organization and operation. As I understand matters, untangling that organizational and operational knot is what the PMV is currently attempting to do in order that elevators, railways, ocean shipping and all the rest of the entities that move grain, containers, you name it, through the port, are more effectively coordinated and thus more product, whatever it is, is shipped.
The railways have their share of the responsibility in this case of course, but so do the other parts of the shipping chain and the regulators.
And that’s the way it goes in Canada.
It can really get complicated.
Sounds as if it may be less so in the US.
Charlie
Chilliwack, BC
There are various points in the linked article that I will address individually. Also, many of these points are addressed in links I posted on the other thread about the Canadian grain business.
Currently there is a backlog of nearly 70,000 rail car orders from grain shippers, representing more than 6 million tonnes of grain. That grain is backed up and sitting in farmers’ yards when it should be in customers’ hands.
That seem like a very high number of orders and if this statement is accurate, then this is inexcusable. But, in the last couple of weeks, various parties with vested interests in this issue have been throwing skunks into each others garden parties in order to be the last voice heard before the Government passes Bill C-30, so I will take this information with a grain of salt.
This change in rules regarding interswitching has struck me as a bit of a red herring being used by the RR’s as a way to distract people away from the very real failures of their systems. The bill proposes an increase in the interswitching agreement from 30 miles to 100 miles. Come on now, how many farmers is this really going to affect. The are only 6 border crossing between Canada and the US between Lake Superior and the Pacific Ocean and only three of those are near grain growing areas. The article states:
One solution (partial) would be to add covered hopper cars as a private fleet. Costly? Yes. But it would allow a little more control.
Let’s face it, farmers are seldom happy. It is in their genetic DNA. Full disclosure, I own a farm.
Ed
OK Canada built a highway and port system at taxpayer’s cost to bypass the railroads give better service than was already provided. It is all the same. The government solutions are always worse!
What external commerce would a Canadian railroad have enjoyed if it were not for the ports?
Radar and Murphy have it. BNSF’s farmers are screaming at least as loudly as CP’s and CN’s. BNSF must unclog itself before it would be in a position to help anybody else.
Recent press releases from both CN & CP indicate that each carrier has been supplying cars at 5000 per week - that is cumulatively 10,000 cars a week -
In loading 10,000 a week - what is being unloaded at the destinations (ports and others)? Less than 10K a week? More than 10K a week?
Efficient grain handling is a total supply chain problem - not just the elevators, not just the railroads, not just the ports - they all have to work together or elements of the chain can be overloaded. When the chain gets overloaded, it fails.
I find it comical that the farmers blame the lack of elevator capacity for their record harvest on the railroads for not having sufficient car capacity. Farmers need to remember when they point a finger at the railroads or other parts of the supply chain - three fingers are pointing back at themselves.
RR’s are only limited to increases up to a total of 10% of the world price per ton. They can charge whatever they want to grow the business, up to that point. At the end of the year penalties are calculated on excess amounts earned over the 10% of world price figure. Many years that threshold is never met.
I wanted to get back to the original linked article to address one more point.
According to a Globe & Mail story of March 12, Mr. Harrison spoke to a New York audience of the importance of intermodal shipments: “Because that’s one commodity that we’re sensitive to,” Mr. Harrison said. “If you miss, you miss. It’s not like grain or it’s not like coal, [where] if you’re a little bit late you’re still going to haul it.”
As I mentioned on the other grain handling thread, deadlines have been a serious bone of contention between the grain companies and the RR’s for many decades. The RR’s have been demanding, quite reasonably IMO, that grain companies sign shipping contracts that spell out both performance levels and deadlines for deliveries. The grain companies have always said no, as that would allow RR’s to ask for higher rates, and these “shipping contracts” might take this issue out from under the governments thumb.
Once the RR’s had these contracts, then they could make
This topic is about CANADIAN farmers, and CONGRESS is not even a factor!!!
I have to agree with the railways on this. Despite the record bad winter CN and CP were moving more grain than a year ago. The harvest was a record, I believe 37% above normal and 20% above the last record. Early in the crop year in August and September when the railways and elevators had capacity the farmers didn`t ship because they were hoping for a better price.
USA doesn`t have inter switching and is fighting having it put in. Canada does and it is being expanded from 30km to 160km (100 mi.) So any American railroad within 100 mi. can get access to anything hauled in Canada if the shipper wants. Not within 100 mi. no problem, just buy a shortline, that will put you within 100 mi. Saskatchewan has a dozen shortlines.
I also think farmers in the US are also having the same trouble shipping grain as Canada due to the winter and railroad congestion. The US railroads might not want to ship our grain though because our rates are lower than yours.
In Canada we did away with the ``crow Rate in the 1980s because it was outdated and too low. Fair enough, but perhaps CP should start paying taxes based on the same reasoning. They don`t have to pay taxes because that was the deal they got when the railway was built.
Admittedly, This Thread is expressing the exasperation voiced by Canadian Farmers and their inability to get grain to market in a timely fashion.
My questions: Are all the Canadian Ports for their grain exports effected? Or is the problem that the Majority export grains are all trying to go just to the Western Ports? For Asian Markets?
Does the grain flow not utilize the Ports of the Great Lakes, or possibly, Eastern Ports, as well? I seem to remember that at one time the Government of Canada had a huge fleet of cars specifically, for Grain Carriage ( Canadian Grain Board?) Has that fleet gone away? I see a few (Canadian Cars) of them pass through here on BNSF.
I was under the impression that many of the Western lines of the CNR and CPR were ‘rationalized’ out in the Grain growing areas, in favor of other transportation; Was that a necessarily a short-sighted move?
Are any concrete long term moves being made to solve this, or are the Canadian Government, The Farmers, Railroads, and truckers all involved in what could amounts to a ‘circular firing squad’. Nothing but rhetoric and fingers pointed for a solution?