WESTERN PRODUCER — Wade Sobkowich summarized in one sentence 82 combined pages of the 2023-24 grain plans published by Canada’s two national railways.
“I guess if we’re going to glean any sort of signal from the numbers, it’s that the railways plan on performing this year like they did last year, and last year wasn’t so bad,” said the executive director of the Western Grain Elevator Association.
Canadian National Railway plans to move 7,100 grain cars per week when the weather is good and 5,600 per week during the winter months of December through March.
Those are the same targets that were set in 2022-23.
Canadian Pacific Kansas City also plans to move 7,100 cars per week when the weather is good and 5,400 during the winter months.
That is up from last year’s targets of 6,000 and 4,350, but that was when it was Canadian Pacific, before the merger with Kansas City Â鶹ÊÓƵern.
“It’s harder to compare last year to this year,” said Sobkowich.
Both railways qualify their numbers by saying that is what they will move under a best-case scenario.
“It’s not necessarily something you can take to the bank, but it’s an indicator,” he said.
The railways also noted several threats on the horizon.
“The Government of Canada’s recent decision to resurrect extended interswitching on the Prairies risks undermining rail capacity because this policy incentivizes inefficiencies,” said CPKC.
“Diversion of traffic from Canadian to U.S. rail carriers was the most significant consequence when this was tried previously from 2014 to 2017.”
CPKC is also upset about Ottawa’s plans to introduce legislation prohibiting the use of replacement workers during a strike or lockout at federally regulated employers.
“The most likely outcome of any such policy is even more frequent labour disruption at Canada’s railways, ports, and other critical players in the federally regulated sector,” said the railway.
CN is concerned about the work stoppages that occur every time it rains at Canada’s West Coast ports.
“There is no reason that wet weather should impact modern grain terminal operation,” said the railway.
“Multiple solutions to this problem are in place in the U.S. Pacific Northwest which is an area with the exact same issue.”
Sobkowich said he hoped the railways won’t use the recent International Longshore and Warehouse Union Canada strike as an excuse for poor service this fall.
CPKC said it will take months for its supply chains to recover and that it could even stretch into 2024.
The strike shut down the movement of containerized goods.
There is a risk that bulk grain movement could be disrupted as the system shifts to transporting more containerized products to make up for the recent stoppage.
“We hope that things will be back up to normal by the time grain starts coming off the combines,” he said.
Sobkowich acknowledged a smaller-than-usual crop is expected this year because of drought.
CPKC said its customers are telling the railway that total western Canadian grain production will amount to 60 to 70 million tonnes, well below Agriculture Canada’s forecast of 73 million tonnes.
Sobkowich said grain companies want to move most of this year’s crop during the beginning of the crop year in the fall and early winter.
They had sales programs on their books long before they knew the size of the crop.
“They will still expect to get the same level of (rail) capacity they would have otherwise gotten with a larger crop,” he said.
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