The numbers show grain movement has started to improve in Western Canada in the last few weeks, but it’s up for debate how much credit should go to the railways for their internal actions; the government for increasing its scrutiny; or, simply the warmer temperatures and the arrival of spring.
The rail backlog this winter has delayed delivery of millions of tonnes of grain by prairie farmers, leaving some producers in cash-tight financial positions with bins that are still full with spring road restrictions taking effect and seeding operations around the corner.
CN and CP supplied 68 percent of hopper car orders in week 33 of the shipping season, up from 53 percent the previous week, according to the Ag Transport Coalition’s latest report. CN, by itself, supplied 74 percent of hopper cars, improving for the third consecutive week from the lows of around 17 percent seen in weeks 29 and 30. The number of ships waiting for grain in Vancouver has also dropped from 35 in late February to 20 as of earlier this week, according to the Grain Monitor’s weekly reporting.
With warmer temperatures, not only can CN and CP increase the number of cars per train going west through the Rockies, but the end of winter also means grain can start moving east through the port at Thunder Bay. The first laker of the season — the CSL Welland — arrived at G3’s port terminal at Thunder Bay on Wednesday.
— scott sumner (@tbay25) March 28, 2018
CN’s David Przednowek joined RealAg Radio on Wednesday, and said he disagrees with suggestions that the arrival of spring is the sole reason grain movement has picked up.
“Part of it has definitely been the weather improving, but we took some serious and immediate actions to deal with the serious network congestion,” he says, in the interview below. “That included placing some really tight controls on the flow of frac sand orders back into Western Canada. We took some actions around propane cars….It was a big part in the turnaround, and you can see it in the numbers.”
Rather than using percentages of orders fulfilled as a metric for performance, Przednowek and CN prefer to measure grain movement in actual car volumes. In a normal winter week, Przednowek says CN’s “maximum sustainable supply chain capacity” is around 4,000 cars per week. That number rises to around 5,500 per week with the end of winter conditions, including the opening of Thunder Bay.
Listen to CN’s perspective on how and why grain movement has started to improve, here: