Room for improvement in grain transportation, study indicates

With the notable exception of the grain backlog in 2013-14, which cost western farmers billions of dollars in lost income, the rail transportation system is working well, according to the Canada West Foundation (CWF).

But a CWF study released Wednesday says “there’s room for improvement” and makes 25 recommendations to improve safety, efficiency, service levels and flexibility in the rail transportation system.

However, the study authors concede no transportation system could have handled the “2013-14 surge,” the record 76.3-milliontonne crop harvested by western farmers, which combined with extremely cold weather, lack of rail and grain handling capacity and logistics co-ordination led to the grain backlog.

University of Saskatchewan economist Richard Gray estimated lack of grain handling and transportation capacity cost western farmers up to $6.5 billion in 201314 and 2014-15.

Last week, the Canadian Wheat Board Alliance released a study on the impact of the elimination of the Canadian Wheat Board’s single-desk marketing authority in 2012, which claims the lack of logistics co-ordination by the CWB was a major contributor to the backlog.

“It probably didn’t help that we hadn’t have a lot of time to adapt to no longer having the wheat board do that job,’’ said Colleen Collins, study co-author and vice-president of the CWF.

“At the same time ... whether the wheat board was there or wasn’t there, physically they couldn’t move enough grain on the timetable that farmers (wanted),” Collin added.

“It was just the perfect storm and I don’t really think there was anything that the wheat board or anyone else could have done with the conditions that they had.’’

Collins added that if the grain transportation system had been built to move a one-in-a-100 year crop, the cost of moving grain would be prohibitive. “If you built a system that could have accommodated that, you would have built a system that you couldn’t afford,’’ Collins said.

Instead, the report calls for the integration of information systems to improve co-ordination and better commodity forecasting so that the supply chain can better prepare for surges in demand.

“There’s a choice: You can have a system that’s very efficient and therefore affordable, not just to the grain business, but everybody else. Or you can have a system that’s highly responsive, like a courier service, and that’s going to be a much more expensive system,’’ Collins said.

Collins said the No. 1 priority of the rail system is to “make sure our exporters are competitive, not just in grains but across the board in bulk commodities.’’

“Exports are the key priority. Competitive exports are what’s required. What does it take to make our exporters competitive?”

The report says the rail transportation system could be improved by stepping up the replacement of level crossings through “grade separations,” adding track to remove “choke points,” and streamlining the way information is gathered and shared.

Janice Plumstead, co-author and senior economist with CWF, said the replacement of level crossings would be a significant investment. “Those costs would be recovered, however, through reduced interaction of people and trains at highrisk level crossings.”