Rail car allotment has been short since October 2013
Great Western Railway, the largest short line shipper of producer cars in Canada is calling on the federal and provincial government to pressure the Class 1 railways to supply short line railways with an adequate supply of rail cars. Since government has implemented higher haulage targets on the Class 1's, short lines have been impacted as the 2 major railways seem to be concentrating on shorter hauls and starving the short lines for cars.
In October of 2013, Great Western Railway was capped by CP at 134 cars per week. It was far less than we needed, but we were promised that number every week. Only four times since October has GWR received at least 134 cars. We are now 2101 cars behind. With at least 145 new producer car orders coming in every week, we can't even keep up let alone touch the backlog of 2101 open orders. At the present pace, we will have an extraordinarily large amount of grain still in farmers' bins heading into this year's harvest.
Millions of dollars have been lost in missed opportunities, missed sales targets and added storage costs. G.W.R. has worked hard to develop relationships with new grain companies in the new marketing environment. These relationships have been strained to the breaking point as there is no certainty in grain movement. The lack of communication from CP makes it impossible to plan as we don't know when cars are coming or how many will actually show up.
There seems to be no concrete plan from the Class 1's to deal with the problem. Weather issues were a concern this winter, but just 60 miles south of GWR is the main line of Burlington Northern Sante Fe railroad and they are dealing with the large crop there by increasing train runs and increasing staff. They have leased hundreds of engines from CP to help with the increased traffic. Those engines would be a huge help to deal with the back log here. The personnel that have been laid off by CP could operate the additional trains.
Price transparency in the grain market will be non-existent until these transportation issues are resolved. The basis will remain extremely wide as grain companies aren't pressed to get grain to their facilities in a timely manner. Long term solutions need to be worked on or Canada's reputation as a reliable exporter will become more tarnished than it is now.