"On The Line" - Grain Transport and the Issue with Canadian Rail
Written by Rachel Hahn for Terriann Walling's blog post on 01/20/23"On The Line"Grain Transport and the Issue with Canadian Rail
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| "Harvest" - featuring two combines and a truck in the foreground and the G3 grain terminal in the background. Photo captured by drone. (Hahn farm, 2021) |
With Canada’s increasing population rates, it is imperative that people understand the challenges agricultural producers and manufacturers face. One of the greatest adversities the Canadian ag sector has faced in recent years is getting grain to port efficiently, and landlocked Saskatchewan has been hit especially hard. With the combined factors of the COVID-19 pandemic, drought, BC floods, rise in demand for consumer goods and increased expenses, Canadian farmers are sweating to meet production demands and an over-exerted rail line is already causing issues that are affecting consumers - heightened rail traffic in cities and spiking grocery prices among them. But why aren’t agricultural exports being prioritized, and what are some possible solutions that would clear up our rail lines?
In the last couple years following the COVID-19 pandemic, grain has been pushed down the priority list for shippers like CP Rail. This has led major trade partners to develop mistrust in Canada’s ability to meet export demands. Not only is this risky in the case of upholding current export percentages, but it makes producers look bad. Local grain farmer Sheldon Hahn indicates multiple causes: he says the number one reason grain isn't shipped as often is oil. Due to the nature of the commodity, rail companies can meet oil demands faster and make more money doing it. From their perspective, it makes sense: why spend time and money shipping grain when oil is in high demand, with a profit to match? Another reason Hahn pointed out is the increased demand for goods shipped in sea cans. Large consumer goods corporations like Amazon have seen an incredible rise in orders since the pandemic, and shipping companies have had to step up to meet this demand. This directly affects the grain industry because now, instead of sending grain-filled cans to China to be emptied and shipped back with consumer goods inside, the cans are being sent to China empty. This is because shipping companies are losing time waiting for the cans to be filled with grain. Fees from shipping empty containers are then passed onto grain elevators and eventually producers, and the entire shipping process is slowed. This practice is wasteful and as aforementioned, makes Canada look unreliable in our ability to ship grain.
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Facing such issues, affected Canadians are searching for answers to their questions and governmental action. Saskatchewan farmers demand stability and an end to the inconsistencies faced in shipping their product. With no foreseeable changes in the products Canadian rails are prioritizing, producers and manufacturers are forced to consider alternative solutions. The leading solution being considered is the continuation of the Keystone XL pipeline extension running from Alberta to the west coast. The extension would free up space on rail lines and provide a safer alternative to rail transport. (see “Calls for pipelines after fiery train derailment in Saskatchewan”, The Globe and Mail). Though the pipeline extension would prove to be an equitable and effective solution, it does pose environmental risks. Other solutions like building more rail lines and processing grain locally are also being considered, but are less likely to come to fruition.
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