MONTREAL, Que.– CN said Canada’s rail transportation system is ready to accommodate the new harvest with a solid throughput rate in line with the grain supply chain. The supply chain will also be able to address the excess carry-over from last year’s extraordinary crop by as early as next spring, said the railway.
“By virtue of normal commercial incentives, the grain handling and transportation system is now fully back in sync and ready to accommodate the upcoming harvest. This positive development is very encouraging and calls for careful balance from the federal government in how it pursues the regulatory agenda it announced in haste in the midst of a very difficult winter,” said Claude Mongeau, president and chief executive.
CN said its run rate of spotting approximately 5,500 grain hopper cars per week since April 2014 has exceeded unconstrained orders placed by its customers, and its wait-list has declined significantly in the last few months due to a high level of order cancellations. As such, CN’s wait-list now represents a normal level of only one week of shipments.
With the rail transportation system running efficiently, Mongeau said the grain supply chain is very well positioned to handle the coming harvest.
“According to Agriculture Canada, the carry-over from the crop-year just ending will be about 18 million tonnes, only 5.5 million tonnes higher than an average carry-over. Given a late-planted crop this spring, the supply chain will have another five or so weeks to deplete stocks further by five to six million tonnes prior to the harvest starting in full gear. All this means there should be sufficient storage capacity available in the system. Looking forward, given Agriculture Canada’s latest 2014-2015 crop forecast of 59 million tonnes – slightly higher than a trend-line average crop – the current throughput level for the rail industry should be sufficient to eliminate all the excess carry-over of grain by as early as next spring. CN urges the federal government to adopt such a commercial approach and is ready to play its key role in the grain handling and transportation system for the benefit of Canadian grain growers,” said Mongeau.