An Inside Look at the Producer Car Allocation Process

There’s been renewed interest in using producer cars to ship grain to customers in recent years, in part due to the backlog in the Western Canadian grain handling system following the bumper crop in 2013, as well as the entrance of new grain buyers after the end of the Canadian Wheat Board’s monopoly in 2012.

As with the rest of the grain handling system, there have been many questions raised about timeliness and transparency in the producer car shipping process: how are producer cars allocated? Who decides how many cars are dedicated to the producer car program? Is there a way to hold railways accountable for delivering producer cars months after they were supposed to arrive?

Garth Steidl, producer car officer with the Canadian Grain Commission
Garth Steidl, producer car officer with the Canadian Grain Commission

The Canadian Grain Commission facilitates the entire process, working with producers, administrators and railways.

In the interview above, Garth Steidl, producer car officer for the CGC, takes us inside the weekly car allocation process, including the steps a producer or their administrator must go through to apply for cars before the CGC submits the order to the railways.

As he explains, in an attempt to make the process more flexible, timely and efficient, the CGC is implementing the following changes to the producer car program for the 2015-16 crop year:

  • Issuing Canadian Grain Commission identification numbers to producers (previously the Canadian Wheat Board assigned ID numbers.)
  • Allowing administrators to submit a weekly shipping request list, adding flexibility and allowing administrators to request producer cars they want allocated in the following week.
  • Requiring each producer provide an email address to the CGC to facilitate communication about a producer car order. Steidl notes CGC staff spent two weeks in 2014-15 contacting producers to confirm whether they still needed cars and clearing out orders where shippers may have applied for more cars than they needed in hopes of receiving cars sooner.
  • Sending email confirmations to producers to ensure each producer car application has a confirmed sale before a car is allocated.
  • Implementing a backlog rule — this limits the number of cars allocated to a producer or company to two times the maximum car spot at a loading site. For example, a producer can load up to 8 cars at a 4-car spot. After that, the next producer in the queue may load cars at that site.
  • A performance allocation rule is being enforced to reduce the number of “phantom” orders in the system.  This means producer car applications will only be accepted if the following conditions are met:
    • A producer is identified on the order.
    • There is a confirmed sale.
    • The loading site is identified.
    • There is an authorized destination.

Since enforcement is up to the Canada Transportation Agency, Steidl explains the CGC tries to work with railways on a congenial basis. The commission doesn’t have the authority to force railways to supply cars, he notes.

While confirmation letters are currently still sent to producers or their administrators by mail, he indicates the CGC is working toward moving the entire ordering and payment process online.

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