CP Rail meeting Canada grain shipment targets

Thu Sep 18, 2014 1:28pm EDT
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Sept 18 (Reuters) - Canadian Pacific Railway Ltd has met the minimum weekly grain volumes mandated by the Canadian government, the railway said on Thursday, a day after Transport Canada said it would fine Canadian National Railway Co for falling short.

Canadian Pacific spokeswoman Breanne Feigel said in an email that the railway had cleared the minimum volumes to date, and a spokeswoman with the transport department also said the railroad had met the requirements.

After last year's record wheat and canola harvest and transportation bottlenecks, the Canadian government ordered the two railways in March to each move 500,000 tonnes of grain per week. Last month, the government boosted the minimum volume to 536,250 tonnes per week through Nov. 29, capturing the harvest period.

Railway movement of grain is critical since Western Canada lacks rivers to move crops to ports and North American buyers.

But Wade Sobkowich, executive director of the Western Grain Elevator Association, said while railway grain movement has improved, it is still not delivering nearly as many cars as grain handlers order. He said the government has not yet delivered on a promise to make data on grain movement by railway more transparent to measure performance.

"In our view, we don't see how either railway is meeting the volume thresholds," Sobkowich said.

The association represents grain handlers including Richardson International, Viterra, Louis Dreyfus and Cargill Ltd.

Canadian National, however, said that weekly demand for rail cars to move grain has fallen short of the level required to meet the targets. The company maintains that any penalties would be unfounded, since there was not enough grain in the system to meet the minimum.

A Statistics Canada report earlier this month pointed to big stocks of grain as of July 31, but not as much as expected.

The latest government data through Sept. 7 from the Canadian Grain Commission, however, reported that farmers had delivered more wheat, barley and canola to commercial buyers since Aug. 1 than they had at the same time last year.

The harvest of the latest crop is under way, but running later than usual in Western Canada. (Reporting by David Ljunggren in Ottawa, Allison Martell in Toronto and Rod Nickel in Winnipeg)