TRANSPORTATION ISSUES
Getting the Crop to Market
By Brian Doidge, OCPA Market Analyst, Ridgetown College, University of
Guelph
There are a number of initiatives currently underway at both the federal and provincial
level that affect the three modes of transportation: water, rail, and road. Since the cost
of transportation directly affects the price you receive for your corn, these initiatives
directly affect the profitability of your grain corn operation.
WATER
The federal government’s reform of marine transportation in Canada, the Canada
Marine Act, is currently undergoing Senate scrutiny and is likely to receive Royal assent
shortly. Essentially, the OCPA is in agreement with the general thrust of the legislation,
which is to make water transportation more efficient, competitive, and cost effective.
These are the main elements of the Act that the OCPA is monitoring:
• Commercialization of the day-to-day
operations of the St.Lawrence Seaway through a “not-for-profit” management
consortium of major shippers, while the government retains ownership and responsibility
for major maintenance and capital investment. The OCPA supports this initiative as a step
towards improved efficiency.
• Rationalization and cost-recovery of
services. The OCPA supports this initiative with the provision that costs are reduced
before pass-through of charges to users are implemented. Of most immediate concern is the
monopolistic and high-cost pilotage system on the St. Lawrence; however, the Act does not
address this situation sufficiently. The OCPA notes the two per cent increase in tolls
effective June 1, but recognizes that this is the first increase since 1993.
• Divestiture and privatization of
ports with the establishment of a much reduced number of Canada Port Authorities under
federal oversight and financial support. Under this scheme, most ports on the Seaway will
be sold to local municipalities or private interests, or if none emerge, will be closed.
Of most immediate concern are Port Stanley and Prescott where emergence of a local
champion to purchase and operate the ports has been slow. Canada Ports Corporation
(C.P.C.) has begun discussions with the Township of Edwardsburg concerning the transfer of
the Port of Prescott, but the outcome is unclear. Moreover, C.P.C. will cease to exist at
the end of this year, so there is a clock ticking. The future of the Port of Prescott is
made even more uncertain because of the construction of a new terminal facility on
Hamilton harbour by James Richardson International. Scheduled for completion late this
summer, this facility on the downstream side of the Welland Canal and well serviced by
rail and road connections, may spell the end for Prescott as a viable grain storage and
shipping terminal.
RAIL
There are two elements of rail transportation that the OCPA
has been monitoring: changes in the rail infrastructure in Ontario and eastern North
America generally; and, the level of service on the rationalized rail system that is
emerging in Ontario. As with marine reform, the OCPA supports initiatives that will make
rail transportation more efficient and cost effective.
To date, a number of rail subdivisions in Ontario have been sold to short-line operators
or abandonned. Of main interest are three: the sale/abandonment of the Canada Southern
(CASO) line across southern Ontario from Windsor to Ft. Erie. Owned jointly by CP
(St.Lawrence & Hudson east of Thunder Bay) and CN, CP is overseeing the sale of the
portion east of St. Thomas while CN is responsible for the portion west to Fargo (south of
Chatham). Neither portion is expected to remain which will isolate a number of elevators
among which is the W.G.Thompson facility at Black’s Lane. The Barrie-Collingwood CN
subdivision has been sold to the two municipalities with local industrial support. Of
immediate interest are two large users of corn in Collingwood, NACAN (a wet miller) and
Canadian Mist Distillery. Concern centers on weight restrictions applied to the line, the
level of service provided by the Class 1 connector, and on the future of the rail
connection at the Barrie end. It may be possible that this short-line operation will have
to acquire running rights almost to Toronto or acquire more trackage. The third rail line
of interest is the future of the CN Guelph subdivision, which connects London
northeastward through Guelph to Toronto. Slated for divestment, this is the only line
connection for the existing shortline railway Goderich & Exeter. There is an obvious
buyer for the subdivision to ensure connection to CN mainline, but the question is: can
the G&E afford more trackage especially since grain movement has been sharply reduced
in the last two years forcing almost total reliance on salt movement from Goderich?
The OCPA is also monitoring the division of ConRail in the northeast U.S. between Norfolk
Southern and CSXT. With major export markets in the northeast and central eastern seaboard
previously serviced by ConRail, OCPA welcomes the proposed sale and split as an
improvement in service due to direct one-carrier connections, especially via CSXT. The
proposed sale is currently under review in the U.S. Senate, but is expected to be
approved.
The OCPA is encouraged by the recent acquisition by CN of Illinois Central (main
north-south carrier in the U.S. with links Chicago-New Orleans) and a marketing alliance
between CN/IC and Kansas City Southern which will dramatically improve access into Mexico.
Although not of immediate benefit to Ontario corn producers, this North American system
should prove of value as a food grade yellow and white corn industry emerges in Ontario
aimed at Northeast U.S. and Mexican markets.
The OCPA’s other rail interest is the level of service provided by the Class 1
railways (CN and CP/St.L&H) to any Ontario shortlines, especially the availability of
hopper cars. The federal government is proceeding extremely slowly on the sale of its
15,000 hopper car fleet. To ensure that the emerging eastern shortline rail system is not
shortchanged by limited car availability, the Ontario Grain & Oilseed Group’s
(OCPA, Ontario Soybean Growers’ Marketing Board, Ontario Wheat Producers’
Marketing Board) position remains that a condition of sale for the federal hopper fleet
must be that 500 cars are available to Eastern grain interests annually on an as-required,
commercial lease basis. We have reaffirmed support for this condition with our partners in
the West, but note that the federal government thus far, has not recognized our position.
We also are not impressed that the Estey Grain Handling and Transportation Review
Secretariat, who’s mandate includes recommendation on the disposal of the fleet, has
also failed to recognize the interests of Eastern grain and oilseed producers. We await
with interest the report on the first phase of the review due May 31.
ROAD
Initiatives affecting truck transportation emanate from the
provincial government with several Ministry of Transportation (MTO) regulatory proposals
of interest. MTO has delayed release of final proposals to harmonize truck size, weight,
and dimension requirements pending the outcome of discussions with Quebec to harmonize
regulations. OCPA supports most of the proposals but has recommended a ten-year phase out
of lift axles on highway trailers. Of more immediate concern is that Quebec is proposing
the elimination of lift axles on straight trucks (ie. feed blower trucks, etc.) while MTO
as yet has not.
OCPA, with the support of many Ontario farm groups, has voiced strong concern to MTO and
the provincial government about the probable balkanization of road transportation in rural
areas (ie. different weight restrictions across the province on roads and bridges
downloaded to rural municipal jurisdiction) and the resultant negative impact on rural
economic development prospects. Unless the province provides funding to maintain
down-loaded roads and bridges to provincial standard, rural municipalites already strapped
for cash will simply lower allowable load restrictions rather than invest in repairs to
roads and bridges, especially if these are used mostly by through traffic rather than by
trucks originating in or destined to industries in the municipality.
OCPA has also made suggestions to the MTO concerning the introduction next year of a
Carrier Safety Rating System involving mandatory facility audits (every 3 years at
operator’s expense) for all licensed trucks. Although OCPA fully appreciates and
supports the need to enhance highway safety, we suggest that most farm trucks do not
accumulate very many kilometers in a year and therefore a system of facility audits
triggered by mileage would be more logical. We also suggest that rather than waste 3 - 4
hours (at a farmer’s expense) of an auditor’s time travelling to and from a
farm, a more efficient system would be to have centralized locations staffed with auditors
dedicated to agricultural vehicle inspections to which a farmer comes on a pre-arranged
schedule. Most importantly, the facility audit checklist of records and documentation that
an auditor will inspect, in addition to the truck, must be sent to all CVOR licensed
producers one year in advance.
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