Canadian Railroads > Canadian Grain Saga Continues

From the August 01 edition of the Toronto Star, an interesting article about a problem also being faced by BNSF and Soo Line: Should we haul oil and coal at the expense of grain?

Did the railroads cut too much? Would an intact Kettle Valley and Crowsnest Pass route be a valuable asset today?

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http://www.thestar.com/business/economy/2014/08/01/ottawa_extends_grain_order_for_cn_cp_or_face_penalties.html



Edited 2 time(s). Last edit at 08/28/14 03:49 by CA_Sou_MA_Agent.

I don't know why CP should be short on crews in Canada. Their train counts into Thunder Bay and into Vancouver are as low as they have been in decades. Only four SCHEDULED trains each way into Thunder Bay from the west and five into Vancouver.
Dick Eisfeller



Edited 1 time(s). Last edit at 08/27/14 17:54 by Dick.

The crew shortage is because Harrison laid off everyone but his grandmother.
You don't think the shares went to $204 just by being more efficient do you?

A lot of people lost their jobs since the Harrison reign of terror started at CP.

Mike Bannon
St Catharines, ON

Not trying to defend old Hunter but on the crew side no one wants to work at CP they are having trouble getting new running trade conductors but as far as locomotives I think he still has about 85 locos still leased to BNSF

We've been over this one before. First, this is not from today's Toronto Star, it is from August 1. And the original deadline was set back in early spring. That generated plenty of discussion.

More importantly, and again this has been discussed before, it's worth noting that there are caps on how much revenue Canadian railways can make from hauling grain. If they earn too much, they have to forfeit some of that revenue and pay penalties and fines on top of that. Among commodities, only grain is mollycoddled in this way, because farmers form an important voting block. This has gone on since time immemorial on Canadian railways, right back to the infamous Crowsnest Pass rate, which led to disinvestment because the railways naturally wanted to invest where they could get a good return. On grain, not so much.

And yet the farmers' spokesmen, as in this article, have the balls to demand that the railways invest more in infrastructure, rolling stock and manpower. If they really want that, they should be prepared to pay the full freight (pardon the pun).

I'm always suspicious of those who want to have their cake and eat it too, which is an impossibility in nature. You want protected rates? Then be prepared to face the consequences.

Railsmith is exactly right. Look at history. Whenever, repeat whenever the government gets involved with the free market the results are always, repeat always the same!!

If it were your enterprise and you had to choose between putting you funds into an area of your business wherein you could reasonably expect a decent return or an area controlled by the gummit wherein you knew going in that the return stunk, which would you choose??? Not a hard decision. The longer this goes on the worse it will get.

Sad but true.

Ross Rowland

Shortage of crews is a big issue in BC - never mind the scheduled trains, there is the main coal corridor from the West Kootenay's to Golden and West to Roberts Bank, then all the extra grain that has been mandated to be moved weekly by the federal governmnent ... the mainline between Calgary and Vancouver is VERY BUSY



Edited 1 time(s). Last edit at 08/28/14 08:50 by Sparky.

As the profit margin of hauling grain is so thin, and the railroads have about as much enthusiasm hauling it as they would, say, livestock or Less-Than-Carload freight, perhaps we'll see something like Amtrak. The Government may step in and organize an outfit where the cars, locomotives and even the crews are all operated under a separate entity and it only has to negotiate usage of the tracks. Government ownership of the grain hopper cars has already made an appearance.

Has the Port of Churchill realized its full potential since operation of the railway and port have been turned over to a company that, supposedly, wants to make a success of it more than CN did?

That sounds like a project taylor made for the government. Spend a bunch of money on equipment and hire a bunch of people to work a couple of months a year. Of course they will have to PAY them for the rest of the year too........

Who knows? Maybe the railroads might welcome that idea like they did Amtrak back in 1971. What else is Government money for? The Military Industrial Complex? Studies on the sex life of the snail darter? Subsidies to tobacco farmers? Choose your poison.

Well, at least in the US, the defense of our nation is a Constitutionally mandated task for our government. The rest of is not. There again, I can't speak for Canada, but in the US, there is no constitutional right have your grain shipped at or below market rates.

I am not so sure now after the Bakken oil volume developed, but before then grain was BNSF's most profitable commodity. I think the business model BNSF has developed is excellent: Standard-sized shuttle trains operating between high-capacity load-out elevators and high-capacity export elevators; shippers and consignees handle all terminal work (in particular, I have been told that in some cases, shippers re-fuel the units left with the train while it loads); and most importantly, every empty train is auctioned off to the highest bidder.

Given a car shortage, and given every train is auctioned off to the highest bidder before it leaves the export terminal, this should be a bonanza time for the railroad.

I can understand a reluctance to buy more grain cars as it destroys the financial model during low-volume periods.

What I would suggest: Raise the rates during the peak seasons and increase the HPT on the trains to turn them faster.

I wonder if the auction model will be (or already is) applied to the oil trains as well.

Best regards,

Rob L.

CA_Sou_MA_Agent Wrote:
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> Government ownership of the grain
> hopper cars has already made an appearance.
>


... and disappearance for the Govt of Canada at least. All the CNWX/CPWX Trudeau hoppers were sold (given) to railways a few years ago. There are still the "Saskatchewan" and "Alberta" ones but that number is only a small percentage of the fleet.

We sure see a lot of the relatively new DME hoppers, especially since that government edict came out a few months ago. So much so, it makes you wonder if CP has any left in Iowa or the Dakotas.

You want to improve grain transportation and make it profitable enough for the railways to "like" doing it - STOP THE PROVINCES FROM TAXING GRAIN TRAINS - ESPECIALLY BC!!!



Edited 1 time(s). Last edit at 08/28/14 12:35 by KickingHorse.

<Shortage of crews is a big issue in BC - never mind the scheduled trains, there is the main coal corridor from the West Kootenay's to Golden and West to Roberts Bank, then all the extra grain that has been mandated to be moved weekly by the federal governmnent ... the mainline between Calgary and Vancouver is VERY BUSy>

This traffic lane handled more trains 20 years ago. It is not very busy compared to the past decade or so. I wonder how the number of available crews today compares with ten or so years ago. Today some of the trains may be over siding or non-clearing and gum up the works but that is another issue.
Dick
Eisfeller



Edited 1 time(s). Last edit at 08/28/14 13:11 by Dick.

CA_Sou_MA_Agent Wrote:
-------------------------------------------------------
> As the profit margin of hauling grain is so thin,
> and the railroads have about as much enthusiasm
> hauling it as they would, say, livestock or
> Less-Than-Carload freight, perhaps we'll see
> something like Amtrak. The Government may step in
> and organize an outfit where the cars, locomotives
> and even the crews are all operated under a
> separate entity and it only has to negotiate usage
> of the tracks. Government ownership of the grain
> hopper cars has already made an appearance.
>
> Has the Port of Churchill realized its full
> potential since operation of the railway and port
> have been turned over to a company that,
> supposedly, wants to make a success of it more
> than CN did?

A Via Grain wouldn't increase track capacity, and likely would increase competition for crews.

Could someone from Canada explain how the government can cap revenue(not rates) and not cap the required number of trains(or carloads). It seems that with a bumper crop at some point the railways would be moving grain for free. Conversely with a poor crop the railways would have a license to rape the shippers, it sounds like a bizarre idea to me.

For Decades we have put up with the Farmers whinning, account some farmers who have the gall to get into politics, due to only a short work season for them ( seeding, then wait 4 months, then harvest ) which gives them the rest of the year to lobby government to haul their precious grain. I say make the farmers pay for what you want. Let the railways earn where they can. IMHO.

Fred

fredstoltz Wrote:
-------------------------------------------------------
> For Decades we have put up with the Farmers
> whinning, account some farmers who have the gall
> to get into politics, due to only a short work
> season for them ( seeding, then wait 4 months,
> then harvest ) which gives them the rest of the
> year to lobby government to haul their precious
> grain. I say make the farmers pay for what you
> want. Let the railways earn where they can.
> IMHO.
>
> Fred

Grain is sacred in western Canada. At least as sacred as beaver in the national psyche.