Feds let grain transport minimums lapse

by MM&d Online Staff

OTTAWA, Ontario—The Government of Canada will not renew its requirement for Canadian National Railway (CN) Company and Canadian Pacific Railway Company (CP) to transport minimum volumes of grain by rail. The  Order in Council expired March 28, 2015.

A year ago, the government took the unprecedented step of mandating volume requirements for moving grain by rail to protect Canada’s farmers and maintain its reputation as a reliable grain shipper. As a result, Canada’s overall grain exports have improved and the projected carry-out going into this new crop year is within the average range historically. Western Canadian shipments from ports are 31% higher than last year, and 25% higher than the 5 year average.

Mandatory volume requirements continue to be an option if the grain supply chain compromises farmers’ livelihoods, the economy or Canada’s international reputation as a reliable shipper. The Government of Canada is encouraging CP and CN to continue to address shipper specific issues so shippers across Canada can grow and build their businesses.

Under the mandated volume requirements CP and CN moved more than 50 million tonnes of grain exceeding the volume requirement by 5.5 million tonnes.

On March 7, 2014, the Government introduced an Order in Council (OIC) for a period of 90 days, to set out minimum volumes of grain to be moved by CN and CP each week, and requiring the railways to report on those weekly shipments. The Fair Rail for Grain Farmers Act, enacted in May 2014, extended the minimum volume requirements of 500,000 metric tonnes per week to the end of the 2013-14 crop year.

On August 1, a second OIC was introduced requiring CN and CP to each move 536,250 metric tonnes of grain per week until November 29, 2014. Regulatory changes were also introduced to facilitate better monitoring of the overall performance of the rail-based grain supply chain, to clarify the operational terms in service level agreements and to increase competition among railways by extending the limit for rail interswitching from 30 to 160 kilometres in the Prairie provinces.

The volume requirements were extended on November 29, 2014, until March 28, 2015.

A summary of the grain volume shipped by rail from August 2014 to January 2015 is available on the Grain Monitor’s website and new weekly and monthly reports will also be posted at www.grainmonitor.ca.

With government support, the Ag Transport Coalition is now reporting by corridor on weekly rail car supply to help individual shippers make business decisions. The government, with input from the Crop Logistics Working Group and the Ag Transport Coalition, will review the Grain Monitor Program before the new crop year to determine how more effective data can be collected to find efficiencies in the supply chain.