CP Rail's car allocation program is off-track
Date: October 31, 2000
Winnipeg -- The CWB said meetings today have clearly shown that Canadian Pacific (CP) Rail’s new car allocation program is introducing uncertainty for farmers and shippers at a critical time.
The CWB proposed that the grain industry extend the transitional agreed-upon process that has been in place since the beginning of the crop year. However, CP introduced their confusing program last week without discussing it with other players in the grain industry. Given this is the peak shipping period, the confusion could result in vessel lineups and disrupt the flow of grain to customers.
"The CWB booked sales and vessels, but was not consulted on the program and now we have no idea if we can get car supply," explained Adrian Measner, Executive Vice-President of Marketing for the CWB. "Among other things, this could result in difficulty meeting sales commitments and vessel lineups, both of which could cost farmers money."
Last week, the CWB submitted orders to CP for 2,800 rail car orders during the week of November 5. CP has decided to provide less than 1,300 cars to the CWB. It is unclear how CP determines who gets cars and who gets turned down on any given week.
While this program is not practical in its current format, the CWB indicated it would explore all options to ensure that farmers grain keeps moving and customers are satisfied. The CWB is working with the grain industry and railways to ensure that transportation reform occurs with minimal disruption and cost to farmers.
"Introducing a new car allocation program without consultation in a peak shipping period is highly disruptive and doesn’t serve farmers or our international customers," said Measner. ‘The CWB and other shippers must be able to determine the system capacity that is available so they don’t sell more grain than they have capacity to get to port. Although this program may be beneficial for CP, it needs work to measure up to the needs of farmers and grain shippers."
The CWB is the world’s largest farmer-controlled wheat and barley marketer. Headquartered in Winnipeg, Manitoba, it is one of Canada’s biggest exporters and the largest net earner of foreign exchange. Marketing Prairie-grown wheat and barley to over 70 countries around the world, the CWB returns all sales revenue, lessthe costs of marketing, to farmers in Western Canada.