Two of Canada’s major railways, Canadian Pacific Kansas City Ltd (CPKC) and Canadian National Railway (CN), are playing catch-up following a labour disruption last month that stalled operations for about four days.
Mark Hemmes is the President of Quorum Corporation, which manages the federal government’s grain monitoring program. He says getting caught up is going to take time as staff need to be put in the right place to be able to get the railways moving again, among other things.
“On top of that, there was quite a bit of traffic that would have just come to a stand still where it was so, in the grain industry, where we were most concerned was how many loaded cars are going to be available to terminals to unload and then how many are held back? And there was a fair bit.” said Hemmes.
Hemmes says CPKC and CN Rail still have a lot of work to do to meet grain car demand. He said currently there are 21 vessels waiting in Vancouver and two in Prince Rupert and “the amount of traffic that’s headed towards them is not sufficient to fill all those vessels.
“Added to that is over the next three weeks we’ll see another 25 vessels coming into Vancouver, so it’s gonna start to get backed up.
“They’re going to have to start getting some of those empty cars back from the coast and from the ports, and that’s going to take some time. We also follow what the Ag Transport Coalition does in measuring the order fulfillment – which is a ratio of the number of cars that the grain companies have ordered into the elevator system against how many the railways were able to supply – it’s quite low for week 3; it was about 36 per cent on CN and 51 per cent on (CPKC), so the total number of cars that they were able to supply was about 2,500. Now that’s leaving a lot of traffic behind.”
CN and CPKC Rail supplied a combined 57% of hopper cars ordered in grain week 4, an improvement from the 44% order fulfillment performance seen in week 3. However, CN performance remains below the 90% performance threshold for the sixth straight week, while CPKC performance remains below the 90% performance threshold for a fourth straight week, not having reached 80% in any of those weeks, and having declined each week over that time period.
With an earlier harvest, Hemmes says it will be sometime in October when there is a balanced rail car flow. In the meantime, expect demurrage charges of 16 to 18 thousand dollars US per day at the west coast, if it takes longer than 12 days to load a vessel. He says those charges will eventually affect producers’ pockets.
(With files from CJGX, CJWW)
