Winter railroad woes

It’s the time of year every Albertan farmer dreads; winter. The days are shorter and the bills for the crop are coming due. The question on everyone’s mind is “Will my crops move on time?”. Each year Canadian grain yields grow by an average of 2 per cent, which means there is more pressure on Canadian rail carriers to keep up with the growing demand for westward bound grain shipments. It is a well-known reality that if rail capacity comes up short, Canadian farmers will feel the brunt on delayed deliveries and cash flow headaches.

"Each year Canadian grain yields grow by an average of 2 per cent, which means there is more pressure on Canadian rail carriers to keep up with the growing demand for westward bound grain shipments."

Over the colder months weather tends to get the blame for a slowdown in rail movement, in part because the railways use air to operate the brake systems. Cold air fills less space than warm air, leading to compressors taking longer to fill break lines to operating pressures. The result is that trains sit still until break lines are pressurized, and a reduction in car numbers out of safety concerns. To mitigate this issue compressor cars are used within trains to supplement the compression provided by the engines, or by asking export locations to pre-fill the break lines prior to engines arriving. However, a noticeable impact remains as every year service levels dip throughout the coldest months.

The Agriculture Transport Coalition measures the weekly supply and demand of rail cars delivered for grain transportation from major grain export companies. Each year, often during the coldest months, car supply falls below demand. Vessels that were expected to be filled by a certain date end up waiting longer until the trains can deliver the grain required to fill them. The end result is that grain vessels on the west coast line up, waiting for trains that were expected weeks earlier. Because of this, grain exporters face fees called demurrage costs, for vessels operating later than they were scheduled. These fees range from $10,000 to $40,000 per day, depending on the market price for ocean freight. Ultimately, grain exporters recover these fees through reduced grain prices, of which farmers feel the impact.

The best way to address this seasonal issue is to run as many trains as possible during these cold months, however this requires more cars and more personnel. Both CP and CN have been purchasing new hopper cars for their rail fleets with greater capacity. With these purchasing programs nearing completion, the industry can expect that the equipment needed to move the crop is in place. Still, the question remains – will there be enough staff to keep pace with movement demand? Both railways reduced their staff during the pandemic as demand for rail services dropped. Now, with the economy largely reopened both CN and CP are recruiting heavily to increase service capacity. If these efforts prove successful and if there are enough trained staff to operate the rail service, the remainder of this winter might prove less woeful than many in the recent past.