Overwhelmed railroads threaten Canadian export economy – by Jen Skerritt, Kevin Orland and Federic Tomesco (Toronto Star/Bloomberg – May 9, 2018)


WINNIPEG—Every day for more than six months, Jessica Raycraft has confronted hulking mounds of evidence of the great Canadian bottleneck. They’re stranded on her farm — wheat, peas and canola in 91-metre-long, 3-metre-high bags, an astonishing 50,000 bushels, enough to fill 15 rail cars.

“Nobody would take it,” Raycraft said from her home near Tramping Lake in Saskatchewan. It wasn’t until a few weeks ago that space finally opened up on freight trains, and then the fields were such a mess of mud from the spring melt that the bags were stuck. “We couldn’t move it.”

That pretty much sums up the problem with Canada. Its railroads are overwhelmed, threatening the country’s standing as a major exporter of commodities and slamming businesses — from relatively modest ones such as Raycraft’s to the likes of oil-giant Cenovus Energy Inc. — that have precious few transportation alternatives.

Stacks of grain piled up on the prairies before the logjam recently began to break. Pipelines were crammed, too, crimping oilsands production. Kinder Morgan Inc. has halted work on a new $7.4-billion line until it can overcome British Columbia’s objections. Other projects have also fizzled.

“There’s no excess capacity,” said Laura Lau, who helps manage about $1.6 billion at Brompton Corp. in Toronto. “If there’s any hiccup, you feel it.”

While freight-train congestion isn’t unique to Canada, it’s particularly acute there. The struggle to get products to market has turned off investors, and is turning into a political headache for Prime Minister Justin Trudeau.

For the rest of this article: https://www.thestar.com/business/2018/05/08/overwhelmed-railroads-threaten-canadian-export-economy.html

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