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CN and CP blame weather for grain backlog. MP Hoback says it as it is!

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    CN and CP blame weather for grain backlog. MP Hoback says it as it is!

    Interesting debate in Parliament on Wednesday Feb
    12/14

    Hunter Harison of CP should have a red face to say the
    least...

    "Frustration flares in committee as railways blame
    weather for grain crisis
    2014-02-12 22:55 , Kelsey Johnson

    ipolitics

    After months of building tension over a seemingly
    intractable and economically devastating grain
    shipping backlog, finger pointing over the crisis broke
    into open hostility in Ottawa Wednesday.

    In an appearance before the House agriculture
    committee, Canada’s two national railways said the
    massive backlog wreaking havoc across the Prairies
    could largely be blamed on cold weather.

    “Sustained cold below -25 degrees is a tipping point
    for railway operations,” Canadian Pacific Vice President
    Michael Murphy said.

    The extreme cold, caused by this winter’s polar vortex
    that has hammered much of North America, has forced
    the railways to shorten trains, Canadian Pacific Director
    of Government Affairs Robert Taylor explained. In
    warmer temperatures, Canadian Pacific (CP) could run
    trains as long as 14,000 feet. Right now, because of
    the frigid temperatures, trains are half that length or
    around 7,000 feet.

    But Conservative MP and former Saskatchewan farmer
    Randy Hoback argued in a tense tirade that capacity
    was also an issue.

    “When I hear the arguments here that you don’t need
    more locomotives, I disagree with you. Capacity is the
    issue here even when it’s cold!” he said, his voice
    steadily rising.

    “You’re actually going to do severe damage to the
    economy of Western Canada if you don’t smarten up!”
    the typically even-tempered MP almost shouted. The
    railway representatives attempted to interject but
    ultimately waited quietly for Hoback to finish.

    The cold weather isn’t the only thing hampering grain
    movement, the railways said. The sheer size of this
    year’s crop – weighing at 95 million tonnes – is also
    causing unforseen headaches.

    “This is a record crop,” CN assistant VP David Miller
    said in his testimony. “Not only is it a record crop, but
    it’s a crop few saw coming, even as the harvest was
    starting,” he said.

    Still, Miller said, while CN managed to move a record
    amount of grain in the fall, as of December things have
    definitely gotten off track.

    CN has added 1,000 more cars to its fleet to deal with
    the backlog, Miller said. The railway has also pulled
    extra cars up from the United States and ordered more
    locomotives.

    As soon as the cold weather breaks, he added, CN will
    be trying to move as much grain and other backlogged
    commodities as fast as possible. The company, Miller
    insisted, is “absolutely” taking the backlog and the
    soaring growth in Western Canada seriously.

    While some members of the committee acknowledged
    the size of the crop could be problematic, few were
    buying the railway’s complaints about the weather.

    “As some of my colleagues have said before, we’re in
    Canada. And, cold weather typically falls along with the
    name Canada right? It should be nothing new to us,”
    Conservative MP Bob Zimmer said.

    “So, what happens if this is a prolonged stint of cold
    weather? Are we going to have the same issues this
    time next year, and the next year following that?,” he
    asked.

    Nor was there much sympathy for CP. In earlier
    testimony by the Alberta Federation of Agriculture, the
    committee was told CP had parked 400 locomotives
    and 2,700 grain cars and laid off 4,500 workers.

    While Canadian Pacific skirted the cuts issue, they
    insisted the number of resources for grain had not
    changed. “The fleet size we have is the same size we
    were dealing with in the fall, when we were moving
    record amounts of grain,” Murphy said.

    While this year’s crop is huge, Hoback said poor rail
    service is not a new problem.

    “When I was farming in 2000 to 2004, we always had
    issues of the trains not showing up on time,” he said,
    “Then you’d blame the wheat board or somebody else,
    but the reality you never had the capacity then.”

    Orders for grain cars continue to pour in across the
    prairies – with outstanding requests topping an
    unprecedented 51,000 car – farmers, grain companies
    and politicians are furious.

    Many farmers haven’t been paid for this year’s crop
    because the backlog has made it almost impossible to
    deliver grain. That’s led to cash-flow problems for
    some farmers, who haven’t been able to pay off last
    year’s loans.

    And, with the backlog stretching into its fourth month
    time is running out.

    Spring road bans will soon be put in place across the
    Prairies. The annual restrictions set axle weight limits
    for vehicles moving on certain roads in an effort to
    reduce the damage heavier loads can cause during the
    spring thaw.

    Meanwhile, farmers in Manitoba’s low lying Red River
    valley are anxious of floods, particularly given the
    amount of snow dumped on the Prairies this winter.
    With grain still sitting in fields, farmers could lose their
    crops completely if the region should flood.

    Industry now estimates the backlog could cost farmers
    and grain companies more than $2 billion before it’s
    cleared up.

    Another $6.5 billion is expected to be tied up in the
    more than 20 million tonnes of grain that will likely
    carry over into the next crop year.

    Agriculture Minister Gerry Ritz has ordered the railways
    to come up with a short term plan to ease the backlog
    by February 24. In the interim, the railways said they
    have been meeting with both the Minister and the
    Minister of Transport at least once a week."

    Cheers!
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