Grain companies say rail service getting worse

Grain companies are continuing to push for amendments to federal legislation that is intended to give railway users more sway in their dealings with major Canadian rail companies.

Wade Sobkowich, executive director of the Western Grain Elevators Association, said deteriorating rail service during the past three months provides further evidence that Bill C-52 needs to go further.

Sobkowich said rail service for prairie grain shippers has been deteriorating since early January, resulting in reduced grain movements to terminal position and longer port waiting times for ocean-going vessels.

About 50 percent of grain company requests for hopper car placements at country elevators are currently going unfilled in Western Canada, he said.

“Right now, we’re seeing a shortfall in (car order fulfillment) in the neighbourhood of 48 to 52 percent, depending on the week and depending on the railroad,” Sobkowich said.

“It’s now gotten to the point where … we as a shipping community decided that we needed to make it known.”

Sobkowich said vessel waiting times at the Port of Vancouver have increased, and grain delivery bottlenecks are affecting grain companies’ ability to fulfill sales obligations and make timely deliveries to overseas customers.

“What we’re seeing is the industry wanting to move product during peak price periods,” Sobkowich said.

“The industry is making (grain) sales and wanting to get that grain in and onto a vessel, but we’re seeing a bottleneck in the railways’ ability to service us right now.”

The Coalition of Rail Shippers (CRS) issued a similar statement, suggesting the language of Bill C-52 needs to be amended to help balance the relationship between shippers and railway companies.

“Shippers require amendments to Bill C-52 because efficient rail service is essential to growing the economy,” CRS chair Bob Ballantyne said in a news release.

“In a number of industries, the railways are delivering less than 50 percent of the rail cars in accordance with the railways’ own service plans. The problem is that shippers currently have no ability to negotiate acceptable terms and hold the railways accountable to those terms.”

Complaints about poor rail service are emerging at a sensitive time for Canada’s major railway companies.

Parliamentarians in Ottawa are currently reviewing Bill C-52, also known as the Fair Rail Freight Service Act, to determine if the proposed legislation should be amended to provide greater protections for shippers.

Public hearings concluded earlier this month with shippers suggesting that the legislation does not go far enough and railway companies claiming the legislative measures are unnecessary.

Last month, the CRS issued a document recommending six amendments to the language contained in Bill C-52.

Canadian National Railway officials contacted last week said there is no basis to the claim that the railway’s recent grain service performance is reason for increased rail regulation.

In an email, Mark Hallman said CN’s western Canadian operations have been affected by extreme weather. Cold temperatures and significant snowfall resulted in several line disruptions, which Hallman said reduced train velocity and increased terminal dwell times.

“These factors have adversely affected the productivity of the rail network, as well as service levels for all customers, including grain elevators,” he said.

Hallman said CN’s commitment to supply chain collaboration has improved service to western Canadian grain elevators.

“In 2012, CN’s grain car spotting performance at country elevators, based on spotting the car to the day promised by CN, averaged 82 percent. It averaged 82 percent in 2011 and 85 percent in 2010. Clearly, this shows a consistent solid performance over the long term and CN’s strong customer focus.”

Both CN and Canadian Pacific Railway have said that commercial negotiations, rather than additional regulations, are the best way to ensure an efficient rail system.

“CP’s position remains there was no need for additional regulation between railways and customers, as it is the company’s belief that reciprocal commercial arrangements, coupled with a stable, balanced regulatory regime, remain the best approach to promote supply chain co-ordination, investment and financial sustainability,” CP officials said in an email.

“We are firmly of the view that continued improvement in Canada’s world class rail supply chain will best be achieved through offsetting commercial undertakings, in particular, better traffic forecasting and more certainty on traffic volumes.”

CP grain officials are reviewing the WGEA’s claim that 50 percent of car orders are going unfilled.

Sobkowich acknowledged that winter weather can affect railway performance but wondered if other factors are at play.

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