It’s not often we hear grain company spokespeople commend railways, but that’s the case this fall, as the grain supply chain handles one of the largest crops in Western Canadian history.
“As a general statement, we think rail performance has been pretty good this fall,” says Wade Sobkowich, executive director of the Western Grain Elevator Association, which represents most of the large grain companies on the prairies.
“CN (Rail) has been performing better in the fall period than we can remember seeing them perform. They should be commended,” he says in the interview below, noting CN fulfilled 92 percent of car orders last week, while CP has been supplying between 80 and 85 percent of orders most weeks, based on data compiled by the Ag Transport Coalition.
There are three reasons for the improved performance by the railways, suggests Sobkowich: reduced competition for rail capacity from other commodities (e.g. oil); poor weather has drawn out harvest and regulated the surge in grain shipping demand; and the railways were well-prepared, knowing grain transportation would be in the spotlight as government and industry started highlighting the potential for a large crop in June.
The WGEA’s Wade Sobkowich shares the grain company perspective on rail performance this fall, the blame game between railways and grain companies, and why he’s optimistic about the federal government’s proposed rail legislation — the extend version of a the interview aired on RealAg Radio on Friday:
Along with grain movement, the railways also appear to have ramped up their public relations effort. CN, for example, has caught some farmers’ attention on Twitter publishing multiple tweets saying it’s meeting “100 percent of contract orders” (see below).
— CN Communications (@CN_Comm) November 14, 2016
Both CN and CP have also started self-reporting grain shipping information on their websites, with CP calling the data compiled by the grain shipper Ag Transport Coalition “misleading and inaccurate.”
“(The railways) have been talking about how much grain they’ve moved in absolute terms. What they haven’t been talking about is how much they’ve been moving as it relates to how much is ordered. Both are important parts of the equation,” says Sobkowich. “When the railways say they’ve moved 100 percent of cars ordered in a particular week, that’s not exactly accurate because we track that through the Ag Transport Coalition.”
— Canadian Pacific (@CanadianPacific) October 19, 2016
In a Nov. 7 news release celebrating a new monthly record for grain shipments to the West Coast, CP called for collaboration and an end to the finger-pointing among supply chain participants.
“The evidence is clear: CP and its supply chain partners are not only working hard to get this bumper crop to market but succeeding,” said CP President Keith Creel. “Together, we are also succeeding in putting old conflicts between railroads and the farmer into the past where they belong.”
However, that same CP release referred to Sobkowich personally, calling him a “paid industry lobbyist,” and accused him of promoting “the notion that an adversarial relationship exists between the railroads and Canada’s farm community.”
“Obviously I don’t agree with that. We’re not trying to promote an adversarial relationship at all. We’re trying to provide information that provides an accurate picture on how the system is performing,” says Sobkowich in response.
“If I were to point blame in any direction, I’d point it at the legislation, where it is right now. We’re very thankful that Minister Garneau has recognized that and has made the announcement to correct that problem,” he continues, referring to the transport minister’s pledge to introduce new rail legislation in 2017.
The WGEA is optimistic the new rail legislation will fix the “imbalance in the relationship between the shipper and the railway,” he says, noting current rules do not give grain companies the ability to apply reciprocal penalties for inadequate rail service.
Listen to Sobkowich share perspective on behalf of the major prairie grain companies, which includes giving credit to the railways for their performance this fall, in the interview above (or via podcast links below.)