Canada passes law to improve winter oilseed and grain transport
June 08, 2018
The Canadian government has approved a new act that aims to make the rail transport of grains – including canola – more efficient throughout the country.
Passed on 23 May, the Transportation Modernization Act (TMA) included provisions to move oilseeds and grains to the market more quickly, according to World Grain. It came after Canadian National Railway Co (CN) and Canadian Pacific Railway (CP) struggled last winter to ship harvested crops in a timely manner, the second time in five years the two major railway operators failed to meet their customers’ expectations due to what they called hard winter conditions and a lack of locomotives and staff.
The TMA made it a fineable offence for railway companies to fail to deliver promised rail cars for shipments on time, World Grain said. It also required them to report each summer on their ability to move that year’s crop and to publish a contingency plan by 1 October on how they intended to keep shipments moving in bad winter weather.
CN said it was preparing to purchase “hundreds” of new grain hopper cars now that the maximum revenue entitlement system – which had capped the total revenues railway companies could earn annually through moving grain – had been scrapped.
Ghislaine Houle, CN’s chief financial officer, said the system been a disincentive to invest in new grain cars but now that it was gone, companies would get 100% of their investments back in revenues.
CP executive Murray Hamilton said CP had also announced plans to invest in new higher capacity rail cars and in network changes that included a 2.5km loop system at grain elevators.
According to Hamilton, with the 2.5km loop, tracks at grain elevators could accommodate 134 rail cars instead of the current 112, representing a 20% increase in delivered crops per train.