Monday, March 31, 2014

CN to grain elevators: Stop complaining and start performing

Written by  William C. Vantuono, Editor-in-Chief
CN, fighting the Canadian government’s attempt to impose on grain movements “ill-advised legislation to unfairly punish the rail industry,” on March 31, 2014 reported that it spotted 5,102 hopper cars for loading at Prarie grain elevators in Western Canada during grain-crop Week 34.

“This marks the fourth week in a row that CN has delivered well in excess of 4,000 grain cars to Prairie elevators, averaging 4,550 cars per week, or 21% greater than our average March performance for the past decade,” said CN president and CEO Claude Mongeau. “We are continuing to make significant progress toward our goal of transporting close to 5,500 grain cars per week to meet the Canadian government’s Order in Council of March 7, 2014. But CN can only meet its commitment if all other key players in the supply chain are equally held to account for their performance.”

Mongeau pointed out that the Canadian government “has yet to regulate grain elevator companies, but has clearly demanded all supply chain players deliver as much grain as possible toward the most efficient and fastest transit-time corridors. This is the most effective way to allow farmers to deliver grain to Prairie elevators and to ensure farmers receive the cash they are owed by grain elevator companies as soon as possible. The faster space is created at country elevators, the more grain, from the most farmers, will be able to move to market.”

“One of the biggest root causes of the challenge we face is a lack of coordination across the supply chain and growing pains from new grain marketing strategies following the change in role of the Canadian Wheat Board,” Mongeau said. “Despite the fact that CN will soon have moved more grain than ever before in its history crop-to-date, the benefit of its strong performance does not appear to be flowing to farmers as it did before. The faster we can ramp up tonnage, the quicker we will be able to mitigate the effects of the grain backlog for all Canadian farmers.”

Mongeau said that the grain elevator companies should stop complaining and start performing: “Having wrongly singled-out railways and unrealistically called for a near-doubling of railcar capacity since last fall, it is now time for grain elevators companies to step up to the capacity they claim to have, and do so in the corridors that will benefit Canadian farmers the most.”

“The recent view expressed by the Western Grain Elevator Association that the railways want to move too many grain loads to the West Coast and Thunder Bay is quite disconcerting,” Mongeau added. The “WGEA has complained all winter about having too many vessels waiting to be loaded on the West Coast, and the highly efficient Thunder Bay Port corridor is about to open for shipping very large quantities of grain to export market.”

“CN is committed to maximize throughput using the most efficient corridors available to address the huge grain backlog created by a 100-year crop,” Mongeau said. “In spite of the burden of being the only segment of the supply chain targeted by heavy-handed regulation, the rail industry will do its part to quickly ramp up to move as much tonnage as possible. Unfounded railway bashing by grain stakeholders and the government’s ill-advised legislation to unfairly punish the rail industry are unfortunately about to set Canada’s grain handling system backward. We steadfastly believe that ensuring commercial alignment and encouraging supply chain collaboration are much better ways to build a stronger transportation infrastructure to the benefit of Canadian farmers.”