Transportation backlog is costing grain farmers up to $13,000 per day
By Kate Ayers
Staff Writer
Farms.com
Railway companies should help compensate grain farmers for the financial losses they face because of transportation delays, says Todd Lewis, Agricultural Producers Association of Saskatchewan (APAS) president.
Shipping companies charge producers daily demurrage fees for vessels sitting at port awaiting product, an APAS release said yesterday.
Generally, “some demurrage costs are paid because of logistics issues. But when you get years like this (one), with such great logistics issues, … it really adds up,” Lewis said to Farms.com today.
“We are short tens of thousands of grain carts for our shipping requirements.”
Because of the rail backlog, over 30 ships are waiting at British Columbia ports.
So, Lewis has lobbied the federal minsters of transport and ag to ask Canada’s railway companies to cover the charges.
The fee for each boat docked off the coast of Vancouver costs shipping and grain companies between $11,000 and $13,000 daily. Companies then pass these charges on to grain producers.
“Given that the railway companies are responsible for these delays, APAS is proposing that, in any week that grain shipments fall below 85 per cent on hopper car deliveries, both railways share the cost of demurrage,” Lewis said in the release.
The ag organization asked that the payments be backdated to Jan. 1, when the rail issues became critical.
“This backlog is going to take months to clean up. (The railways) are so far behind that these costs are going to be ongoing throughout the shipping season. So, it’s important that farmers get help,” Lewis said to Farms.com.
“Hopefully the railroads will pick up some of these costs. … They have apologized lots for poor service but that doesn’t pay any of these bills.”