By Tim Kalinowski
While the challenges facing the Great Western Railway based in southern Saskatchewan may be many, Andrew Glastetter, general manager of GWR, says his company has focused its efforts on creating greater diversity and flexibility in its operations to serve the local ag community better— and to better meet the local rail transport needs of the future.
“We have been looking at diversifying our business,” Glastetter says. “And we do now bring in sand for the energy industry. Also fertilizer by railcar load is picking up in this area. We have been able to work with one of our local retail companies to bring fertilizer in by rail, and that has been a good shot in the arm for our business. We are still quite busy in the railcar storage business, and we have been reaching out to different industries looking for opportunities to store their cars. We have been able to get creative freeing up different space along our lines to provide additional storage— so that’s a good revenue source for us as well.
“But our core business remains serving the farming communities of southern Saskatchewan,” he states, “and if we are able to diversify our business and bring in revenue from other sources when we do have some slower years on the grain side of things— we have that confidence we’re going to be here for the long run to keep serving the farmers and local farming industry.”
Much of what the railway has done is by necessity, admits Glastetter— with a litany of problems creeping into the shortline rail business since 2013-2014.
“When cars were in short supply in western Canada with the backlogs on the Class 1 railways,” recalls Glastetter, “there some initiatives put in place by the federal government which ended up encouraging the Class 1 railways to put more priority on their mainline terminals where they could run larger unit trains back and forth to port and get a faster turn on their railcars. To that end, a lot of shortlines ended up losing out because they had fewer cars allocated to them and had a much longer waiting period to get those cars.”
This situation gutted the GWR’s mainstay durum hauling business in southern Saskatchewan as farmers opted to move their grain by truck to the mainline terminals rather than face the uncertainties in car allotments beleaguering the local rail company. That business has never really roared back in the years since, confirms Glastetter, but GWR had another lever to pull to replace some of that lost business— pulses.
“We ended up having some pretty good years with the pulse crops,” remembers Glastetter. “Of course, that mini boom ended when a lot of the political issues came up with India, and with supply and demand issues worldwide we have seen the pulses really slow down. When pulses pulled back, we have seen really reduced rail shipments of crops over the last year.”
Crude oil shipments out of southwest Saskatchewan was another lucrative business; at least for awhile.
“We were also moving crude oil until those shipments fell off with the downturn in the industry,” says Glastetter. “So that was at the end of 2014, and we haven’t been moving any since.”
While these kinds of challenges might have been the death knell for other companies, Glastetter believes GWR has come out of these trials stronger than ever before, more ready to compete and more hawkish in taking advantage of the opportunities presented to it.
“We are really happy with the position we’re in overall,” confirms Glastetter. “But we would prefer to see is the grain shipments increase; so now that we are comfortably diversified around different revenue streams. That’s our focus at the moment.”
And that’s also where GWR’s latest endeavour comes into the picture— the founding of a sister company called Great Western Commodities Ltd.
“Great Western Commodities will be involved with, at a minimum, helping to co-ordinate grain shipments off our lines, and trying to put buyers and producers together,” explains Glastetter. “There will be times when Great Western Commodities will actually get into the business of buying and selling of grain as well.
“We are not looking necessarily to go head to head with the companies on our line that do that also,” he cautions, “but at the end of the day our situation is if there is a deal which can be put together, and it needs us to get in between to buy the grain or facilitate that part of the deal off our line, we will do that.”
To support this new and exciting initiative the GWR has purchased 150 of its own hopper cars, and has applied for a Canadian Grain Commission marketing licence, says Glastetter.
“There are perhaps buyers, maybe overseas, that may want to get access to our grain and may not be Canadian CGC licensed or bonded, or have the expertise to deal with local producers, perhaps they may have to put together a train of several producers— our expertise can look after the producers, the payments to the producers for their grain, and put it all into one train and sell it as one block,” says Glastetter.
The GWR already is working closing with the CPR to explore other opportunities in this linking vein for Great Western Commodities Ltd. to ship to buyers through the Port of Vancouver or Thunder Bay, and Glastetter says it has also not escaped his or his board’s notice that the U.S. border is just a hop, skip and jump away.
“We have certainly thought about expanding more southward,” Glastetter confirms. “A lot of our traffic over the years has traditionally gone through the United States when you take into account our current railway network. Our traffic will connect with CP’s line and end up hitting a lot of millers in on those lines down there over the years; especially with durum. Quite a bit of our durum goes down to the U.S. now. And quite a bit of our barley.”
While there would be an infrastructure cost involved in laying down additional track of its own to connect directly southward, Glastetter says if the right opportunity presents itself that would likely not hold GWR back.
“What would the world for us look like with a possible direct physical link to a United States Class 1 railway like the BNSF, for instance?” asks Glastetter. “It’s not an idea totally out of this world for us. I can tell you it gets looked at seriously now and then at various levels of our organization. It’s some that could be a game-changer for shippers on this side of the border. Definitely for the grain industry, and also probably for the oil industry.”
While Glastetter says he is not ready to make any announcements on that score yet, he is keen to get Great West Commodities Ltd. fully launched in the New Year.
“The future for our company is strong and bright,” he states with confidence. “We have already seen an increase in our grain shipments (since announcing the start of Great Western Commodities Ltd.) from companies contacting us, and having (our staff) put some prices out there.
“We know a lot of the producers already,” he explains, “and we have a good database of what’s out there for crops and farmers, and what they are willing to sell their grain for. That alone has put us in a position to move more grain because we have been able to get people together to make deals along our line.”