Western Grain Elevator Association

Western Grain Elevator Association

December 01, 2014 13:08 ET

WGEA Highlights Need to Maintain Rail Capacity for Grain Transportation in Winter Months

WINNIPEG, MANITOBA--(Marketwired - Dec. 1, 2014) - The Western Grain Elevator Association (WGEA) noted the government's announcement today on minimum volume requirements for moving grain by rail through the upcoming winter months. The WGEA appreciates the government's intent to ensure that the grain industry has a minimum threshold for rail capacity this winter.

"We hope and trust that the railways will not use these low minimum volume thresholds as an opportunity to ration capacity, and that they will match their supply as close as possible to that of the industry demand, which is significantly higher than the minimum thresholds," said WGEA Executive Director Wade Sobkowich. "Product must continue to move consistently through the winter if we are to address the large amount of grain that still sits in bins across the country, and we are encouraged to see that the government is asking for winter contingency plans and transparent and timely reporting of railway performance."

The winter contingency planning that the government has requested of the railways is an important piece of the puzzle. Winter rail transportation always suffers from cold weather and weather related incidents, so having a transparent plan in place is critical.

WGEA members have also been concerned about the impact of rail transportation performance on the relationship with international customers, having noted many customers this past year went shopping for supply from other countries when they simply could not get adequate product from Canada. Additionally, the WGEA is sensitive to the fact that many domestic grain and oilseed processing customers have also had a difficult time getting proper supply of bulk grain and in shipping their finished product to market, particularly in the southern and eastern corridors.

"Canada has a global reputation for delivering high quality crops on time to its customers," noted Sobkowich, "this announcement shows those customers that neither government nor industry want a repeat of last year's poor performance."

In the longer term, the WGEA is hopeful that the government will support ways to create effective checks and balances in the rail transportation system. Having these in place will avoid the need for emergency legislation in the future by making all stakeholders accountable for their part of the logistics value chain. The review of the Canada Transportation Act is a helpful and important undertaking that will allow for a thoughtful analysis of this obvious problem, and the potential to deliver on long term, commercially-oriented solutions.

The WGEA is an association of grain businesses operating in Canada, which collectively handle in excess of 90% of western Canada's bulk grain exports. Its members account for approximately 20% of railway revenues and pay annual total rail freight of over one billion dollars.

Contact Information

  • The Western Grain Elevator Association
    Wade Sobkowich
    Executive Director