Grain handling firms rip CP chief’s claims

The organization representing the Prairies’ mainline grain handlers isn’t buying claims from Canadian Pacific (CP) Railway’s CEO about why the railway’s grain shipments are lagging.

Hunter Harrison, in a full-page ad last week in Canada’s two national newspapers, said the harshest winter in 60 years, a record Western crop and grain companies not running 24/7 are to blame for the backlog. [Related story]

The Western Grain Elevator Association (WGEA) has now issued a statement to “clarify” what it calls “significant inaccuracies” in CP’s ad.

Harrison said CP knows Canada gets winter every year, but this was one was exceptionally cold. When it’s -25 C or colder trains must be shorter for safety reasons, he said.

The WGEA says CP and Canadian National (CN) Railway failed to meet elevator car orders in September, “months before the cold weather hit.”

“In grain shipping week 8 (Sept. 20, 2013), CP’s own website showed the planned service at approximately half the demand by shippers,” the WGEA said. “This was exacerbated by the fact that CP did not once meet its planned order commitments this crop year.”

Harrison said nobody predicted Western Canadian farmers would harvest a record crop. The WGEA says in September grain shippers told the railways there was a record crop.

“Records and presentations exist that constitute proof that CP was told that crop production was over 70 million tonnes,” the WGEA said. “In addition, grain shippers have been signaling demand to the railways on an individual basis each week since the beginning of September.”

According to Harrison, CP Rail is moving record amounts of grain.

“In February alone, despite the weather, we managed a 15 per cent increase in grain shipments,” he said.

The WGEA refutes that too.

“Quorum, the independent grain monitor, reports that (CP’s) overall weekly railcar unloads remain at six per cent lower than last year,” the WGEA said.

Harrison said CP Rail staff work 24 hours a day, seven days a week, while some elevators were closed.

“We can’t move trains out of the Prairies if rail cars haven’t been loaded and we can’t return empty cars back to the prairies if trains are sitting idle waiting for port terminals to unload them,” he said.

The WGEA says grain company employees work when there are cars to load or unload.

Adding more cars to the system when it is congested, makes things worse, Harrison said. “It is like adding more cars to a highway at rush hour — everything moves that much slower.”

The WGEA says CP is to blame for the congestion because it cut 4,550 employees, 11,000 railcars and 400 locomotives, since 2012 to lower costs and boost profits.

“Both railways have the means and ability to increase capacity,” the WGEA said. “What has been lacking to date is the willingness or requirement to do so.”

CP’s ad came out the day before the federal government issued an order-in-council requiring the railways to move at least one million tonnes of western grain a week or face fines of up to $100,000 a day. [Related story]

Transportation Minister Lisa Raitt said she didn’t warn the railways in advance.

Harrison emphasized improving grain movement requires co-operation throughout the supply chain and vowed CP will do its part by shipping 240,000 grain this crop year, up more than 20 per cent last year’s record.

“We are having productive discussions with governments,” Harrison concluded. “With their help, I am confident that we will tone down the rhetoric and move forward with a co-ordinated transportation system for the betterment of all Canadian shippers, including grain producers.”

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man.

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