Have Your Say: An Open Letter to CP Rail’s E. Hunter Harrison

It’s been a long, cold, snowy winter. I get that. You get that. The railways also get that, apparently. And, on one hand, would like to tell you that the dismal service Western Canadian farmers and Canada’s agriculture industry is receiving is the weather’s fault and then, in the same breath wants to “work together” to solve this logistics crisis. Oh, really? We’re going to “work together” to make it warm up and snow less on the Prairies in winter?

According to CP Rail’s CEO E. Hunter Harrison, yes. He published the following letter online and as an advertisement. You’ll pardon me if I don’t find the open letter all that encouraging or helpful.

But what say you, western Canadian farmers? If you could broadcast your own open letter to the railways, what would it say? I’ll compile the comments and send them along (I’m not saying it’ll do anything, but perhaps an airing of grievances will give us the beginnings of a roadmap to what all MUST be addressed in the next five to 10 years?)

Here’s a comment from Rick Taillieu, of the Alberta Canola Producers Association, to get the ball rolling (originally posted here):

“Just read CP CEO Hunter Harrison’s open letter “Setting the record straight: On Canadian Pacific’s rail operations in the harshest winter in 60 years”

The fifth paragraph reads: “Distinct from operating conditions, Western Canadian farmers last year produced an extraordinary grain crop of 80 million metric tonnes (MMT), 27% above the previous 2008/09 record and 37% above the five year average. This increase was not forecasted by anyone, including grain growers themselves.”

Well, Mr. Harrison – are you prepared fro the increased production that is being projected for canola in the next 12 years? I’m also pretty sure that farmers will continue to increase yields in other commodities such as wheat and pulse crops.

Consider yourself notified of the increase.”

An open letter from CP Rail:

You may have seen and heard a lot of confusing and contradictory information in the news recently about the railways and their reported inability to move Canadian grain to ports in the face of a record-setting harvest.

As you may expect this is a very complicated issue. I would like to set the record straight and provide some context and facts.

Anyone in Canada or the Northern U.S. has experienced the frigid reality of the past few months. Moving consumer goods and other commodities like grain has been severely impacted by harsh winter temperatures not seen in more than 60 years. Environment Canada reports that this winter’s extreme cold temperatures have created an unprecedented low average temperature – the coldest December/January since 1949/1950. We know “winter happens every year” which leads us to conduct extensive winter preparations. Despite these preparations, sustained cold below -25 degrees C is a tipping point for railways, as it is for other modes of transportation. The last three months have been exceptional, with 49 days below this temperature in the Canadian central prairies vs. 25 days on average. When the weather is this cold, we must take steps such as reducing train lengths to continue to move freight and ensure the safety of our employees and the communities in which we operate.

I’ll be the first to admit that our usual service levels aren’t being met during this period when all commodities in the entire supply chain are impacted by this brutal weather. Despite this, the women and men of CP remain on the job 24/7, exposed to this weather as they keep the railway operating even while, in some cases, grain elevators have temporarily suspended loading operations.

Distinct from operating conditions, Western Canadian farmers last year produced an extraordinary grain crop of 80 million metric tonnes (MMT), 27% above the previous 2008/09 record and 37% above the five year average. This increase was not forecasted by anyone, including grain growers themselves.

CP is moving more grain than ever in its history. This crop year CP has moved more grain than the previous year, itself a record for grain movements in Canada. In February alone, despite the weather, we managed a 15% increase in grain shipments.

Moving grain from the farm to the port is a complex pipeline involving many parties. Canada’s largest ever grain crop and this winter’s weather created the “perfect storm.”

Some have called for CP to add more rail cars and locomotives. Adding more cars to the system when it is congested and being negatively impacted by weather is exactly the wrong thing to do. It is like adding more cars to a highway at rush hour – everything moves that much slower. To improve the situation, all of us in the grain supply-chain must be accountable for our respective pieces on a 24/7 basis. 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.

The grain supply chain will return to very high levels of performance over the coming weeks when these extreme cold temperatures lift. In the meantime, we need all the parties to step up and provide commitments and exert additional effort.

We’ll do our part. We expect to move 240,000 carloads of Canadian grain this crop year, a more than 20% increase over last year’s record.

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

Let’s do this together!

E. Hunter Harrison
Chief Executive Officer
Canadian Pacific

 

And you said….

 

Lyndsey Smith

Lyndsey Smith is a field editor for RealAgriculture. A self-proclaimed agnerd, Lyndsey is passionate about all things farming but is especially thrilled by agronomy and livestock production.

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13 Comments

Andrew Dalgarno

Interesting that Harrison states we produced 37% above last year, but CP is only planning to increase their grain car movement by 20%.

What are we supposed to do with the other 17%? Leave it in piles and hope it doesn’t rot before next winter?

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Jody Klassen

No surprise here. Railways have always tried to avoid responsibility by suggesting the rest of the system is at fault. They like to point to the 1% (or less) of the time there is a problem with the rest of the system and make it sound like it’s as significant as there failure. Same with the weather. It’s a real factor but not likely as significant as Mr Harrison makes it out to be. This whole situation could use less rhetoric and more real solutions which should start with railways taking responsibility. Of course that’s not going to happen in a PR piece like this one.

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Justin

I guess I don’t understand the ‘rush hour’ analogy. When Mr. Harrison is met with a clogged city street, does he just wait on a side street until the traffic thins? Does he get home faster doing this? Adding cars during rush hour makes things move slower, but at least they move!

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Dieter Schwarz

Railways need to figure out how to move a lot of crop from October to March. This is vital for grain movement, but also for farm cash flow. Bringing on extra capacity now, when road restrictions and seeding preparations will hamper grain movement efforts of the farm, is a bit late (albeit still welcome I am sure). If the railways didn’t know there was a bumper crop growing on the prairies, then they had their heads in the sand. It is also interesting that trucking companies didn’t seem to have problems moving goods during this cold winter (I am sure they didn’t enjoy it, but didn’t hear any complaints). If farmers have truckers that don’t perform, they choose another company. In this case they don’t have a choice, and that is a real problem. I hope the review of railway capacity etc will come up with real solutions. Canada is finally experiencing some profitability in the Ag Sector, only to be hampered by this infrastructure issue.

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Gerrid Gust

I would say that most farmers understand and empathize with capacity issues. We all know that with a big crop some of it will likely have a birthday on the farm.
Where I see the problem is where contracts are signed (sometimes with a very wide basis) and there is still no movement. No one is getting upset because they are a week or two late delivering during extreme cold. It’s when contracts are 30-120 days late. No business can cash flow their suppliers that long without a greater return or premium for doing so.

I have zero pity for railway management in now having to deal with Federal regulators. It was their choice to haul other commodities at the expense of their grain customers needs.

They’ve cost the Canadian farmer conservatively over $2 billion dollars. I now want them to feel some pain in their bonus and share price.
G

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Rick

Mr. Harrison I first would like to ask the question why is it you posted your ad in paper that are seldon read by the folks the are struggleing to get our grain moved. Or is your motive to talk to the city folks that know little of what has been going on with the railway this winter, and will be easly brain washed by your BS. You talk about adding engines and car will only make the system more conjested, so was your way to ramp up movement of all commodities by getting rid of 400 locamotives and 11,000 railcars and lay off 4500 employies. Seem a very strange way to handle more business. Or was your only motive to increase the profits to your company. Is that truly all you and your company care about. If so just be bluntly honest, you are all about your own greed. I have yet to see where you admit maybe that was not the right decision. But you do mange to find the words to say that with the cold winter you have to shorted the car lenghts because it takes more engines to handle the air pressure for the cars during that time. Maybe thats what those reserve locamotive were for. One question is why in such a cold winter have you been able to haul 135% more oil than last year if the winter was so tuff to deal with. Maybe just a thought you may want get those engines back, in case we have winter again next year!!! Or would that cut into your own personal bonus too much??? As wel I was informed last fall, once the old contract to have almost free use of the CWB rail cars expired, your decision was to side thousands of rail cars because you did not want to have to pay for to use these cars. You are not hauling our grain for charity maybe it is reasonable that they should be rented at fair rate, not just side lined so only your own cars got used.

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Bucky Beaver

As an employee of CP rail I agree with what you are saying. Mr. Harrison is not at all honest with anyone he is ALL for his shareholders. Train lengths were over 10,000 feet during this past winter, so him saying we ran shorter trains is not true at all. We where ordered by Mr. Harrison to dump the air on trains after the big oil train derailment in Eastern Canada. The Air Test is only good for 4 hours, so if a crew doesn’t recover the train within that time period they are required to re-test the entire train including the trains Air Marker. The Conductor is required to walk and check the set and release of the brakes ( a roll-by of the release of the brakes is OK if the conditions are right) on every car. If the train is 10,000 feet long in knee deep snow on tough walking conditions (ballast) its going to take some time to complete.

Not only has he dismissed 4500 employees, a lot of employees are leaving because of the way Mr. Harrison and Mr. Creel have ordered Lower management to harass the train crews. There was a meeting in St. Paul this week and the question that came up is: Why are train crews quitting I can give you answers to that question if you like. I hope you read this yourself Mr. Harrison and Mr. Creel this might help your current situation. I am in the process of looking for other employment until then I must use a fake name otherwise the Nazi’s will come for me.

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Craig Shaw

Time for an open debate with Hunter Harrison and someone from the elevator association. He knows that he would loose hands down as he has no facts to back up his argument. It would seem that the expectation of entitlement goes beyond the Alberta Provincial government. We need permanent binding contracts with penalties for not filling obligations.

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Jim Boak

This is a personal challenge for each and every farmer, a railway challenge and a government challenge.. Government being us. We can point fingers and lay blame here or there but it really comes down to the simple question – Do we want regenerative agriculture or not?

If we do, and we being anyone who needs food to survive then I suggest we take our collective heads out of the places where the sun don’t shine and do something about it.

If that means a change in government or a new rail company that up’s the competitive service offer – then the sooner the better – lets get on with it.

JB

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Albert Fortier

The only way we are going to fix this broken down system is for all the stakeholder (mostly farmers) be all on the same page and demand running rights on the rails (all the rails). Sure their would be problem to iron out but we can do it. In this scenario we would automatically get accountability from the railway company’s which we have never had. The transportation issue has been going on for a long time with million spent on study after study and only banned aid solution implemented. With 150 + ( so I’ve been told) CN and CP lobbies in Ottawa nothing will ever change that would make the railways accountable to the men and women that pay there wages. The only way is running right.

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Dean

All have over looked real reason for not moving grain and potash. It will raise the operating ratio. He will take fines before he will move grain. Ratio effects share price and hunter works for a Wall Street corp. not cp rail. Unless the government steps in with serious measures, it won’t stop.

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james blunt

Hunter harrison has singly handed created the most toxic environment in cp rails history. its is absolutley poisnous as he continues to polute and disrespect employeees. he is a disgrace

Reply

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