Encourages grain elevator companies to stop complaining to governments and step up their performance to help move giant crop to market
MONTREAL, March 31, 2014 /CNW Telbec/ - CN (TSX: CNR) (NYSE: CNI) said today it spotted 5,102 hopper cars for loading at country grain elevators in Western Canada during grain-crop Week 34 that just ended. This marks the fourth week in a row that CN has delivered well in excess of 4,000 grain cars to Prairie elevators, averaging 4,550 cars per week, or 21 per cent greater than CN's average March performance for the last decade.
Claude Mongeau, CN president and chief executive officer, said: "We are continuing to make significant progress toward our goal of transporting close to 5,500 grain cars per week to meet the Canadian government's Order in Council of March 7, 2014. But CN can only meet its commitment if all other key players in the supply chain are equally held to account for their performance."
Mongeau said the federal government has yet to regulate grain elevator companies, but it has clearly demanded all supply chain players deliver as much grain as possible toward the most efficient and fastest transit-time corridors. This is the most effective way to allow farmers to deliver grain to Prairie elevators and to ensure farmers receive the cash they are owed by grain elevator companies as soon as possible. The faster space is created at country elevators, the more grain, from the most farmers, will be able to move to market, he said.
"One of the biggest root causes of the challenge we face is a lack of coordination across the supply chain and growing pains from new grain marketing strategies following the change in role of the Canadian Wheat Board," Mongeau said. "Despite the fact that CN will soon have moved more grain than ever before in its history crop-to-date, the benefit of its strong performance does not appear to be flowing to farmers as it did before. The faster we can ramp up tonnage, the quicker we will be able to mitigate the effects of the grain backlog for all Canadian farmers."
In this context, Mongeau added, the recent view expressed by the Western Grain Elevator Association (WGEA) that the railways want to move too many grain loads to the West Coast and Thunder Bay is quite disconcerting. The WGEA has complained all winter about having too many vessels waiting to be loaded on the West Coast, and the highly efficient Thunder Bay Port corridor is about to open for shipping very large quantities of grain to export market.
"Having wrongly singled-out railways and unrealistically called for a near-doubling of rail car capacity since last fall, it is now time for grain elevators companies to step up to the capacity they claim to have, and do so in the corridors that will benefit Canadian farmers the most," Mongeau said.
CN is committed to maximize throughput using the most efficient corridors available to address the huge grain backlog created by a 100-year crop. In spite of the burden of being the only segment of the supply chain targeted by heavy-handed regulation, the rail industry will do its part to quickly ramp up to move as much tonnage as possible.
Mongeau concluded: "Unfounded railway bashing by grain stakeholders and the government's ill-advised legislation to unfairly punish the rail industry are unfortunately about to set Canada's grain handling system backward. We steadfastly believe that ensuring commercial alignment and encouraging supply chain collaboration are much better ways to build a stronger transportation infrastructure to the benefit of Canadian farmers."
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