CNS — Canadian railway traffic has improved in recent months, but there is still a large backlog of producer car orders to move through.
“The rail issues are behind the big guys; those who can move 100-car unit trains are getting them and moving the grain to the ports,” said analyst Wayne Palmer, of Agri-Trend Marketing. However, “the problem still lies with producer cars, which are still 15 to 20 weeks behind,” he added.
Poor rail movement over the past winter prompted the federal government to implement legislation requiring the country’s two major railways (Canadian National and Canadian Pacific) to increase their weekly grain handling in order to deal with the backlog.
The legislation saw the major railways move their traffic from Alberta to the west coast and from Manitoba to Thunder Bay first,“ and Saskatchewan was left in the doldrums,” said Roger Gadd, general manager of Great Western Railroad, a southern Saskatchewan short line.
The short lines, such as Great Western, rely on CN and CP to bring them cars, but the major railways were more focused on meeting their own commitments when the legislation was introduced.
Gadd said things were now “clearing up,” with one trainload of 120 to 134 cars being delivered per week. “We’re still way behind on open orders, but we’ll hopefully see the light at the end of the tunnel as we get to the end of the crop year.”
Great Western is still 1,500 cars behind, with new orders coming in all the time. Gadd said two trains a week, or 250 cars, would help get them caught up although he was doubtful that would happen.
While the delays getting producer cars are a headache, there is still plenty of interest in using the short-line and producer cars. “We have more new customers this year than we’ve ever had,” said Gadd adding “we’ll take every car they can throw at us.”
Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.