March 29, 2018 11:06 am

APAS calling on railways to pay shipping penalties

APAS wants CN and CP to pay the financial penalties grain producers face due to ships sitting empty in port waiting for shipments.

File / Global News
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Saskatchewan’s largest farm group is calling on the railways to cover the costs of the financial penalties famers are paying due to delayed grain shipments.

The Agricultural Producers Association of Saskatchewan (APAS) says producers are paying up to $500,000 daily in demurrage fees due to ships sitting empty in port due to the delays.

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Demurrage fees are paid to shipping companies when product is not loaded or unloaded from ships within an agreed timeframe.

APAS said there are more than 30 ships waiting for grain shipments at B.C. ports, with demurrage charges ranging between $11,000 and $13,000 a day for each ship.

Todd Lewis, the president of APAS, is calling on Agriculture Minister Lawrence MacAulay and Transport Minister Marc Garneau to make Canadian National Railway and Canadian Pacific Railway pay those penalties.

“Given that the railway companies are responsible for those delays, APAS is proposing that in any week that grain shipments fall below 85 per cent on hopper car deliveries, both railways share in the cost of demurrage,” Lewis said in a press release.

“We have asked that these payments be retroactive to Jan. 1, 2018, when the problems became severe.”

Lewis added the grain shipment plans proposed by the railroads failed to address how CN and CP will co-operate to clear up the backlog.

READ MORE: Grain backlog focus of agriculture minister meeting

CN has stated it hopes to catch up and meet grain car targets by mid-April while CP said it is starting to recover from the winter weather and is adding crews and locomotives to deal with the situation.

APAS said producers paid more than $40-million in demurrage fees during the 2013-14 grain transportation backlog.

© 2018 Global News, a division of Corus Entertainment Inc.

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