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Plan to address grain backlog forcing elevators to cancel orders.

Krissa Welshans 1

August 29, 2014

3 Min Read
Canadian Pacific unveils new plan, takes heat

ON  August 22, Canadian Pacific (CP) updated its plan to resolve the backlog of unfilled grain car orders in response to an August 18 U.S. Surface Transportation Board (STB) order, but the new plan, which requires grain elevators to cancel a majority of their existing orders, has drawn criticism from public officials. CP said it believes the new grain-car request system will provide a more accurate reflection of the grain backlog.

As a first measure, shippers removed 16,256 unneeded open requests from the system, bringing the new estimate of the backlog down to 11,989 open requests, and CP expected this number to fall significantly in the weeks to follow as customers were expected to continue to remove unneeded open requests.

CP said it also planned to modify and improve its planning process for small shipments, increase employees, deploy a new shuttle service, improve routing options with customers, and supply additional locomotives to the Rapid City, Pierre, and Eastern Railroad operating in South Dakota.

Upon hearing of CP’s plan, Sen. Heidi Heitkamp (D., N.D.) called out Canadian Pacific Railway chief executive officers E. Hunter Harrison, saying the company’s plan is “seriously flawed.”

Specifically, Heitkamp said the company’s new rail car order and shuttle train system ignores the current number of unfulfilled requests from grain elevators, and forces North Dakota’s farmers and grain operators to start from scratch in the middle of the state’s harvest season. It’s making grain elevators essentially leave massive quantities of crops on the side of the road while the railroad will only transport new grain orders, according to Heitkamp.

Numerous grain elevators who are customers of Canadian Pacific have contacted Heitkamp about the problems with the new system. For many, their number of open requests for grain cars has recently dropped dramatically, but it wasn’t because Canadian Pacific has fulfilled those requests. Rather, it was because CP was making them cancel most of their open orders, leaving grain elevators without certainty that they would receive the cars they need under the new system. It also was preventing them from selling the grain that had been delayed for months.

Just over a week ago, some grain elevators using CP reported past-due cars ranging anywhere from 200 to 2,000 cars. But now, under the company’s new system, those delays range from zero to 50 cars, despite Canadian Pacific moving far fewer cars than necessary to actually achieve such dramatic reductions in this short timeframe.

“Canadian Pacific is trying to pretend like the massive agricultural shipment delays across North Dakota don’t exist despite the fact that grain has been piling up around the state for months,” said Heitkamp. “Our farmers and grain elevators are suffering, and just leaving crops from the past few months that haven’t been shipped – because of the railroad’s failure to deliver cars – on the side of the road hurts us all, including our state’s economy. While Canadian Pacific’s new reporting system may provide more transparency in the long run, the company cannot just sweep under the rug the delays of the past year and start from scratch.”

Rep. Kevin Cramer (R., N.D.) also responded to CP’s new plan, saying he would “not tolerate bullying tactics of any kind, especially given the pressures already placed on our agriculture industry.” Cramer added that he had made the Surface Transportation Board aware, and explained he would address the “serious matter” during an upcoming hearing.

The Surface Transportation Board has a hearing scheduled Sept. 4 in Fargo, North Dakota to address the ongoing grain backlog and the railroad companies plan to resolve it. View a list of scheduled speakers. A live video of the hearing will be available at www.stb.dot.gov under “Information Center:  / Webcast / Live Video” on the home page.

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