Another Canadian logistics ‘disaster’ not likely for 2014/15

CNS – Last winter, rail movement of western Canadian grain was described as ‘disastrous’ for a number of reasons, including bad weather and record large amount of supplies needing to be moved.

But, this spring and summer, movement has started to improve in most places, helped by government legislation and better weather, and the same problems aren’t likely to arise this winter.

“Having been through that once, maybe that will help better prepare everybody along the supply chain for dealing with large volumes of grain,” Jon Driedger, market analyst with FarmLink Marketing Solutions in Winnipeg, said.

It’s also unlikely that we’ll see another winter as cold, and with as much snow, as in 2013, Driedger said.

Supplies of grain this winter won’t be as large as first anticipated, which will also help the industry avoid bottlenecks.

“Because we have had some better grain movement here, there is going to be less grain on farm than maybe people were thinking when they were looking at the worst of it in January and February,” he said.

“We definitely lost crop in Western Canada over these last few weeks, canola has gotten smaller, and some of the other crops, so that in and of itself is going to take a lot of pressure off the need in terms of how much grain actually has to move.”

The passing of Bill C-30, also known as the Fair Rail For Grain Farmers Act, will also play a big part in keeping the 2014/15 (Aug/Jul) crop moving. The act will ensure that at least 5,500 rail cars of western Canadian grain are being moved per week through to the end of the 2013/14 crop year, or later, which will help things move more smoothly.

Cam Dahl, president of the newest Canadian farm group, Cereals Canada, noted that the bill will play a significant role in ensuring there’s not another rail movement disaster.

The industry is still waiting to see what the regulations that will bring the act into force will be. Dahl said that things like reciprocal penalties are needed to ensure grain movement by rail stays on track.

“Just as the railways are able to hold shippers to account for what they say contractually, the same should happen in return,” Dahl said.

“I think we are on the right track, but going forward we have to ensure that this never happens again. That to me is the most critical question now is ‘how do we ensure that this never happens again?’.”

Dahl added that in recent trade missions to Asia, the first question every customer asked was about Canada’s ability to get grain to buyers.

“There’s no question it’s hurt our reputation,” Dahl added.

 

Terryn Shiells writes for Commodity News Service Canada, a Winnipeg-based commodity reporting service

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