Winnipeg-based Richardson on Monday announced expanded rail car spots for its elevators at Lacombe, Carseland, Provost and Olds, Alta.; Estevan, Whitewood and Nokomis, Sask.; and its Dundonald elevator about 20 km north of Portage la Prairie, Man.

At Whitewood, about 110 km south of Yorkton, the expansion work will also include upgraded storage capacity, bringing it up to about 44,800 tonnes from its current 31,140. A company spokesperson said the upgrades will also boost that site’s loading speed to 134 cars in 16 hours.

The expansion work is due to start later this summer for completion by the end of next year, Richardson said.

The expansions, CPKC said, will allow future trains from these sites to run under the railway’s 8,500-foot (2.6-kilometre) High Efficiency Product (HEP) model.

CPKC’s standard unit train for grain, which today runs up to 7,000 feet (2.1 km), is the model Richardson today ships from 27 CPKC-served elevators in Canada and one in the northern U.S.

In 2018, before its merger with Kansas City Southern, CP unveiled new high-efficiency grain hopper cars for the HEP model, featuring a five per cent shorter frame capable of carrying 10 per cent greater weight and 15 per cent more volume than previous-generation hopper cars. In all, CP said at the time, the 8,500-foot HEP train model is expected to allow a train to handle about 44 percent more grain.

Richardson’s newest elevator, commissioned earlier this year at Carmichael, Sask., about 65 km southwest of Swift Current, marks the grain handler’s first 8,500-foot HEP-compatible site, with a loop track to handle up to 175 high cube-style rail cars.

Richardson president Darwin Sobkow said in a release Monday the expansions at the eight Prairie elevators “will increase capacity and efficiency, enabling Richardson to further benefit from CPKC’s single-line network reaching Canada, the U.S. and Mexico.”

CPKC executive vice-president John Brooks said in the same release Monday that “Richardson’s ability to run longer trains will mean more grain shipped per train, tighter cycles and more Richardson trains moving across our expanded, single-line network throughout the season.”

The move follows the completion in April of CPKC’s merger, which officially ties CP’s track to Kansas City’s lines in the U.S. and Mexico.

That single-line rail network will also make for a “seamless pipeline” between Richardson’s Prairie elevators in “durum-rich areas in Saskatchewan” and its U.S. durum flour milling operation, Italgrani, at St. Louis, CPKC said Monday.

“Furthermore, the combined network and markets in the southern U.S. and Mexico are opening new doors to Richardson for their grains, oilseeds and processed products.” — Glacier FarmMedia Network

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The Canadian Transportation Agency (CTA) on Dec. 22 ruled Canadian National Railway (CN) and Canadian Pacific Railway (CP) each overshot their maximum revenue entitlements (MREs) for the year, by $3,170,615 and $2,170,010 respectively.

The overages, plus respective five per cent penalties of $158,531 and $108,501, are payable to the Western Grains Research Foundation (WGRF), the agreed-upon beneficiary, within 30 days of the ruling date, the agency said.

The railways’ allowable MREs for the crop year were $930,331,426 and $997,060,798 respectively.

CN’s qualifying Prairie grain movements in 2019-20 totalled 23,525,161 tonnes, while CP’s reached 24,498,737. Their average lengths of haul came in at 1,013 and 918 miles respectively, the CTA said.

Combined, their grain handle was up 4.3 per cent on the year, while their combined average length of haul, at 965 miles, was down 1.4 per cent, the agency said.

The two railways’ annual MREs, commonly described as their revenue caps, are calculated using a formula factoring in their grain handles and average length of haul along with the volume-related composite price index (VRCPI), an inflation index reflecting the railways’ costs for labour, fuel, materials and capital purchases.

The CTA in May 2019 set the 2019-20 VRCPIs at 1.4371 for CN and 1.5148 for CP, both up from 2018-19. Both railways later sought and got adjustments from the agency, which raised CN’s 2019-20 index to 1.4498 and CP’s to 1.5311.

The 2019-20 crop year marked the second in which CN and CP have separate VRCPIs, following amendments to the Canada Transportation Act in 2018.

The CTA in May 2019 said the increased VRCPIs for 2019-20 were based mainly on “modest increases in the fuel and material components” of the index, and from the “recognition of costs for the acquisition of hopper cars.”

CN and CP in 2018-19 both came in below their MREs, after both booking overages of seven figures above their MREs during each of the previous four crop years. — Glacier FarmMedia Network

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Brisk crop movement in a country that relies heavily on rail is a bright spot during pandemic lockdowns, which have hammered most industries.

“We’ve had an almost unlimited supply of rail cars and power. We’re shipping off the map,” said John Heimbecker, chief executive of grain handler Parrish and Heimbecker.

Canada exported a record 959,900 tonnes of wheat in the week ended May 10, although year-to-date volumes from Aug. 1 are behind. Canola exports are eight per cent ahead of the year-ago pace.

Major exporters include Richardson International, Viterra and Cargill.

In the 2019-20 crop year to date, shippers have unloaded more than 19 million tonnes of grain at Vancouver, up six per cent from average, despite a disruptive rail strike and protests earlier, according to Quorum Corp.

Declining coal and crude volumes and Canadian National Railway’s recent purchases of locomotives and hopper cars have driven up grain shipments, said Sean Finn, CN’s executive vice-president of corporate services.

“We’ve been shipping grain like there’s no tomorrow,” he said.

Timely rail service is critical for farmers’ cash flow, said Bill Campbell, president of Keystone Agricultural Producers.

“It has been a pleasant surprise for producers to haul all their commodities when they want to.”

A tougher test will come in autumn and winter, when a new harvest is ready and as other sectors may recover, said Wade Sobkowich, executive director of the Western Grain Elevator Association.

By then, Canadian Pacific Railway will be running additional high-volume grain trains to handle another big potential harvest, as part of its long-term upgrades, said Joan Hardy, CP’s vice-president of grain and fertilizer sales.

“There’s a great crop in the ground and our customers are telling us conditions look really good,” Hardy said.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.

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“By the second week of December (week 19), CN returned to shipping at peak levels, as well as taking on all customer hopper demand for the second and third weeks of December,” Montreal-based CN said in a release Thursday.

“Despite a slow start to the crop year due to adverse weather, CN spotted over 6,800 hopper cars per week during the first two weeks of November (weeks 14 and 15 of the crop year). This was the high point of the crop year. The eight-day strike prevented CN from accepting any new orders during week 17 as CN was only operating at approximately 10 per cent of overall capacity.”

Due to the strike in week 16 (Nov. 17-23) CN delivered 37 per cent of the 5,409 grain cars on time to companies participating in data collection done by the Ag Transport Coalition.

Many grain companies have seen CN’s shipping program restored to pre-strike levels, Western Grain Elevator Association (WGEA) executive director Wade Sobkowich said in an email.

“That does not mean it has caught up, nor have we recovered from the eight days we lost,” he wrote.

In an email CN spokesman Jonathan Abecassis said CN is encouraging customers to place more orders for grain movement to fully utilize available capacity.

CN set two grain shipping records earlier this fall. In October CN moved a record 2.8 million tonnes of grain. The previous record was 2.7 million tonnes set in April 2019.

In week 11 (Oct. 13-19) of the current crop year CN moved a record 685,187 tonnes of grain from Prairie country elevators to export terminals. The previous weekly record was 675,075 tonnes, moved in week 10 of the 2017-18 crop year.

CN’s Calgary rival Canadian Pacific Railway (CP) on Dec. 2 also booked an all-time record monthly Canadian grain handle of 2.74 million tonnes in November, up from its previous all-time record of 2.66 million, set in October.

CP’s next-to-previous such record, 2,62 million tonnes, was set in April this year.

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man.

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The train, hauling 112 cars of grain, was parked for two hours at the last station before a tunnel near Field, B.C., to allow a new crew to replace one that was near its maximum hours of service, Transportation Safety Board (TSB) senior investigator James Carmichael said on Tuesday.

He said emergency air brakes were applied before three crew members, a locomotive engineer, conductor and conductor trainee, boarded the train and prepared to depart for Vancouver.

The train then “began to move on its own,” exceeding its maximum track speed of 20 miles per hour (32 km/h) for the tight curves and steep mountain grade, and derailed, Carmichael said.

The area features some of the most challenging terrain for trains in North America, he said.

CP could not be immediately reached. On Monday, CP CEO Keith Creel said in a statement that the company would not speculate on a possible cause.

Carmichael said the TSB’s investigation would continue to determine how the loss of control happened.

TSB representatives haven’t yet spoken to the train’s previous crew as to whether it had any problems before the new crew boarded, he said.

Apart from the 112 hopper cars, the train also included three locomotives at the front, middle and rear, the TSB said.

The lead locomotive and some of the cars derailed on a curve prior to a bridge, the TSB said, where the lead locomotive came to rest on its side in a creek and a number of derailed cars came to rest on an embankment.

Many of the remaining cars, including the mid-train remote locomotive, piled up behind them, and only 13 cars and the rear locomotive remained on the track, the TSB said.

Event recorder data from the “severely damaged” lead locomotive hasn’t yet been obtained, the TSB said, while some data has been recovered from the tail-end remote locomotive and “work is underway” to get data from the mid-train remote locomotive.

Eight railway workers have died in Canada since November 2017, including Monday’s deaths, according to the Teamsters union that represents Canadian rail workers.

— Reporting for Reuters by Rod Nickel in Winnipeg. Includes files from Glacier FarmMedia Network staff.

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The accident occurred when a train carrying 40 to 60 grain hopper cars derailed near Field, B.C., the TSB spokesman said.

TSB is investigating the cause of the derailment, the spokesman added. Employment Safety Standards Canada, the B.C. Coroners Service and RCMP are also investigating, RCMP said Monday.

Field is about 30 km west of Lake Louise, Alta. in the Rocky Mountains.

RCMP at nearby Golden, B.C. said they were called to investigate a possible CP derailment and found the train derailed near the Spiral Tunnels. CP said the derailment occurred at about 1 a.m. MT in between the Upper and Lower Spiral Tunnels, just east of Field.

Three people were found unresponsive and pronounced dead at the scene, RCMP said in a release.

CP CEO Keith Creel, in a statement Monday afternoon, identified the three railroaders as conductor Dylan Paradis, engineer Andrew Dockrell and trainee Daniel Waldenberger-Bulmer.

“In the hours ahead we remain focused on employee safety and the safety of our first responders, in addition to working closely with the families of the deceased and all our employees,” Creel said in his statement Monday.

The incident, he said, “is under investigation and we will not speculate at this time on a cause — we owe it to those involved to get it right.”

The Spiral Tunnels, according to Parks Canada, were excavated in 1909 through the Kicking Horse Pass in what’s now Yoho National Park, to reduce a rail grade which until then exceeded the acceptable industry standard.

Creel said CP is working closely with Parks Canada and other agencies “to ensure the environment is not negatively impacted.”

Recovering at the crash scene, he added, “will be complex and challenging given the remote location and extreme weather, but with collaboration and communication, we will get there.”

Eight railway workers have died in Canada since November 2017, including Monday’s deaths, according to the Teamsters, one of the unions representing Canadian rail workers.

–– Reporting for Reuters by Tyler Choi. Includes files from Glacier FarmMedia Network staff.

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In its October estimates, USDA estimated Ukraine rapeseed production would come in at 100,000 tonnes more than previous estimates to 2.7 million tonnes.

Turkey’s sunflower harvest was boosted 60,000 tonnes above earlier estimates at 1.8 million tonnes.

The region’s soybean crop was left unchanged at 8.199 million tonnes.

Russian harvest

Grain analyst UkrAgroConsult reports the Russian grain and pulse harvest is 96 per cent complete with 109 million tonnes harvested. Russian harvested a record grains harvest of 135 million tonnes in 2017.

Wheat and barley were furthest advanced, both being 98 per cent complete. UkrAgroConsult reported the wheat harvest at 72.63 million tonnes, and barley at 17.5 million tonnes.

Russian’s corn was reported as 60 per cent harvested as of Oct. 16 at 6.51 million tonnes collected.

Rail service

Canada’s two national railways have supplied 88 per cent of hopper cars ordered in Week 10 of this crop year, ending Oct. 6.

Canadian National Railway recorded a small increase in performance supplying 94 per cent of cars ordered, or 4,000 of 4,262.

Canadian Pacific Railway’s performance declined, as it supplied 82 per cent of cars ordered, or 3,668 of 4,464, compared to 84 per cent the week previous.

The railways have a combined backlog of 1,023 outstanding orders an increase of one per cent from Week 9. CN’s outstanding orders have risen by 12, while CP’s have declined by four.

Shipper demand has remained above 4,000 cars for six straight weeks at CP and five consecutive weeks at CN.

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CP moved 25.8 million tonnes of western Canadian grain, grain products, soybeans and non-regulated principal field crops during the 2017-18 crop year. That’s a one per cent increase from the previous crop year and one percent greater than CP’s three-year average.

Canadian National Railway shipped four per cent less in 2017-18 than it did in the previous year, with 24 million tonnes carried.

Higher-than-expected yields and cold weather caused grain backlogs in the early part of 2018. Cold weather forces the railways to run shorter trains.

The railways are under increased scrutiny this year following the federal government’s passing of the Transportation Modernization Act earlier this year. The Act contains provisions to allow long-haul interswitching, requires railways to file winter grain movement reports and changes maximum revenue entitlements (MRE), a pricing structure that sets out what railways can charge to ship grain.

Another aspect of the Act which will impose financial penalties on railways for failing to deliver on promised service will take a year before a process can be established to hear complaints and administer rulings.

Neither railway responded to interview requests in time for this story.

In a report to federal Transport Minister Marc Garneau, CP published its plan for the upcoming shipping season. It expected the western Canadian crop to come in at 70.8 million tonnes. With carry-over stocks from the 2017-18 crop year, the system will move about 83.4 million tonnes this marketing year, said CP. That is five per cent larger than the previous five-year average.

Those estimates can vary wildly once the harvest starts to come off, CP’s document stated. Last year’s crop was originally estimated at 65 million tonnes, but ended up at about 71 million, a difference of almost 10 per cent.

“Our agricultural shippers have needs that are unique within our book of business, and we believe an ongoing dialogue with those companies is essential to understanding and meeting their needs,” Joan Hardy, CP’s vice-president of sales and marketing for grain and fertilizers, said in a news release. “Our plans for moving this year’s crop reflect that.”

CP said it plans to supply 5,500 hopper cars each week to meet grain-shipping requirements through autumn, until the Port of Thunder Bay closes for the season. After that it is aiming to supply 4,000 cars per week.

CP said it has more than 700 employees that are currently being trained and it expects to have more than 100 remodeled locomotives added to its fleet by the end of summer.

CP added it planned to spend in excess of $1.55 billion to replace track assets and upgrade its network.

Both railways said changes to the MRE enabled them to invest more into their grain-handling assets.

CN said it planned to have 1,000 new hopper cars in place over the next two years, 200 new locomotives over three years and about 1,200 new locomotive conductors. It also embarked on a $3.5 billion capital spending plan.

— Terry Fries writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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After parting ways with its CEO Luc Jobin on Monday, Canadian National Railway (CN), through interim CEO Jean-Jacques Ruest, said Wednesday it “apologize(s) for not meeting the expectations of our grain customers, nor our own high standards.”

CN on Wednesday said it will now deploy “qualified management employees” to operate extra trains; add train crews in Western Canada; and offer incentives for “key operating employees” to delay retirement and put off vacations as well as for “recently-retired” operating employees to return to work.

The added train crews, CN said, include about 250 conductors added in the last three months of 2017, about 400 more in the first three months of this year and another 375 to be added between April and June.

The company said it has also leased 130 more locomotives, “almost all of which are now online.”

CN said it delivered 4,577 empty hopper cars last week, up 35 per cent from the February average of 3,400. “All available hopper cars are in service and we will show sequential weekly improvements progressing towards 5,000 per week by the end of March,” the company said.

“We will provide regular weekly tracking on our grain movements and engage our grain customers,” Ruest said.

CN’s pledge follows a letter Tuesday to Ruest and Canadian Pacific Railway (CP) CEO Keith Creel from federal Agriculture Minister Lawrence MacAulay and Transport Minister Marc Garneau, citing concerns from shippers in a “variety of sectors” over rail service.

In recent weeks, the ministers wrote, concerns have risen among grain growers and shippers over “the lack of rail cars, the slow turnaround time of trains, and the reduced pace of rail movements from grain elevators to ports.

“We understand that there have been challenges for the railways this year, including a larger than expected grain crop and adverse weather conditions, but it is imperative that everything be done to ensure the efficient movement of grain and other commodities.”

For its part, CP on Wednesday blamed “extreme weather” over the supply chain through much of February, contending the “chain works best when all of the players are functioning at a high level.

“When one railroad struggles, or a shipper is dealing with a labour outage, or a vessel captain refuses to load in Vancouver due to rain — the entire supply chain suffers, just as it does when temperatures drop below -25 C for long periods of time.”

“While our challenges have been significant, they are different than that of our competitor’s and the success of the supply chain depends on both railroads running at optimum levels,” Creel said in a release.

Meanwhile, CP said it saw its grain shipments in week 31 up by 16 per cent and spotted “nearly 50 per cent more empties to the country,” both compared to the previous week.

CP noted this year’s crop had been originally forecast at around 65 million tonnes, but will end up closer to 71 million metric tonnes, with much of the increased production seen in the railway’s northern catchment area while the south was relatively dry.

“These short-term challenges are episodic, not systemic and we expect our network to improve with improving weather conditions,” Creel said.

‘Cash flow problems’

Groups including the Canadian Federation of Agriculture and Grain Growers of Canada on Wednesday renewed calls for passage of federal Bill C-49, the Transportation Modernization Act.

Both CN and CP also called Wednesday for the bill’s passage; the bill, CP said, will “bring some further certainty to the grain supply chain moving forward, specifically relating to new hopper car investment.”

C-49, which Garneau introduced in the Commons last May, imposes data-reporting requirements on railways, sets up rules for long-haul interswitching between railways and allows shippers to seek “reciprocal” financial penalties in their service agreements with railways.

The bill passed third reading in the Commons in November and has been parked at second reading in the Senate since December, when it was referred to the Senate standing committee on transport.

Not all farm groups are on board with C-49 as a solution to grain shipping woes; the National Farmers Union on Tuesday said the legislation “weakens the railways’ common carrier obligations to the point it may become almost impossible to find that a railway is providing insufficient service.”

The CFA on Wednesday also called on Ottawa to quickly provide cash-strapped farmers awaiting payment for grain with “short-term income supports” — for example, expanding the provisions of the federal Advance Payments Program (APP).

MacAulay, in a separate release Friday from Farm Credit Canada, said he “encourage(s) all affected producers to consider applying” for APP cash advances. The APP offers federally-guaranteed advances of up to $400,000, the first $100,000 interest-free.

Farm Credit Canada on Wednesday said it is “offering support to customers across Western Canada facing potential cash flow problems due to delays in grain movement to international markets.”

FCC said it would work with affected Prairie grain growers to “explore options to address their individual needs,” noting it offered similar supports in 2014.

Canada’s rail service situation “is not as dire as it was in 2013-14,” MacAulay and Garneau said in their letter Tuesday to the railway CEOs, but “railway performance has been disappointing.” — AGCanada.com Network

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“I think there’s a real shift happening from low efficiency to the higher-efficiency facilities,” Karl Gerrand, CEO of G3, said Wednesday during the What will the Canadian grain industry look like in 10 years? panel.

Almost 3,000 elevators dotted the Prairies in the 1980s, compared to just under 350 today, as elevators become larger and more efficient.

According to Gerrand, facilities being built in Canada are now large loop systems that can handle more train cars.

“The loop tracks that we’re putting on our new facilities will load grain actually in about just under eight hours, a full 134-car train,” he said.

Some older facilities can only handle under 100 cars and don’t feature loop systems, which make for longer loading times.

It’s not just the size of elevators that have increased, he said, but also the amount of on-farm storage space.

Canadian farmers have added 15 million tonnes to their storage, he said, “bringing it to about 70 million metric tonnes. Commercial storage, on the other hand, is in that seven- to eight-million-metric-tonne range.”

The rail cars used to transport grain are also changing. Out of about 23,000 hopper cars in Canada, 10,000 are owned by the federal government and are reaching the end of their life expectancies.

According to David Przednowek, director of grain marketing for CN, the government cars will be out of use by 2025-26 and aren’t expected to be replaced.

“The model is very efficient in terms of private cars but there are definitely (changes) that we’re going to see over time and the proportion of private cars in western Canada will increase,” he said.

The type of grain cars we see travelling on the tracks will also change; according to Przednowek, hopper cars of the future will be higher in capacity, shorter in length.

“The more capacity for the more tonnes that we can ship by using individual trains (makes for) a lot more efficient supply chain,” he said.

According to Gerrand those trains will be able to cut down shipping time for more efficiencies. Trains will be in the 134- to 150-car range and will haul 20 per cent more grain.

The cycle time from farm to elevator to port and back “has typically been in that 20-day range and that’s back in 2015. Of late we’ve been moving more towards the 14-day range.”

G3 is also now building a new Vancouver port terminal which, according to Gerrand, will allow it to cut that cycle time to seven days.

— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow her at @AshleyMR1993 on Twitter.

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