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Canadian railways make progress on easing grain logjam

By Rod Nickel

WINNIPEG, Manitoba, March 18 (Reuters) - Canadian grain shipments by rail have picked up since earlier this month when Ottawa ordered Canadian National Railway Co and Canadian Pacific Railway Limited to improve service, CN and a grain-handling group said on Tuesday.

Transportation bottlenecks have left crops landlocked after a record-smashing harvest and frigid winter in Canada, the world's biggest canola exporter and No. 2 wheat shipper.

Grain handlers have noticed "a slight improvement" in railway service during the past week and a half, helped by milder temperatures, said Wade Sobkowich, executive director of Western Grain Elevator Association, whose members include Cargill Ltd, Richardson International Limited and Viterra.

CN, the biggest Canadian railway, spotted an average of 4,320 grain hopper cars per week at country elevators for the the past two weeks, up from an average of 2,964 cars per week in February, said CN spokesman Mark Hallman.

The railway is in process of adding 500 more hopper cars, and intends to continue spotting more than 4,000 cars per week until Port of Thunder Bay, Ontario opens in early April, Hallman said. After that, it can move closer to the government-ordered target of 5,500 cars per week, provided there is strong collaboration from grain companies, he said.

Each hopper car contains about 90 tonnes of grain.

Canadian Pacific spokesman Ed Greenberg declined to disclose the number of cars it has recently deployed, but said the railway company is moving a record volume of Canadian grain.

The Canadian government ordered CN and CP on March 7 to collectively double weekly grain shipments to 1 million tonnes or the equivalent of 11,000 cars, and gave them four weeks to work up to that pace.

Agriculture Minister Gerry Ritz said Ottawa would also introduce draft legislation later this year to ensure Canadian shippers could get their products to market "in a predictable and timely way."

Sobkowich said estimates of the number of hopper cars available last week vary by grain company, but last week may have been the busiest in 2014 so far.

Most grain hopper cars have been destined in recent weeks to the West Coast and Port of Thunder Bay, Sobkowich said. Thunder Bay may open to vessels in the coming weeks once ice melts on Lake Superior.