March 7, 2014 / 12:50 AM / in 4 years

Canada to take action on railway backlog delaying grain shipments

TORONTO, March 6 (Reuters) - The Canadian government said on Thursday it would take action to address a lack of rail capacity that has led to a backlog of grain shipments, with two top ministers set to provide details on Friday.

The Conservative government had warned last month it might step in with new regulations as record crops of wheat and canola, along with frigid weather, overwhelmed Canadian National Railway Co and Canadian Pacific Railway Ltd, resulting in overdue orders for tens of thousands of grain cars.

The government did not provide specifics on Thursday, but said the announcement in Winnipeg, Manitoba, by Transport Minister Lisa Raitt and Agriculture Minister Gerry Ritz would “address challenges in Canada’s grain transportation.”

Canada’s two big railways have stepped up service to reduce a backlog of grain shipments that have delayed exports and pushed oat prices to record highs. The railways have said they are preparing to add thousands more cars per week to transport grain to ports.

Canadian Pacific Chief Executive Officer Hunter Harrison took out a full-page newspaper ad on Thursday, in which he said the backlog was due to the harsh winter and record large crop.

Canada is the world’s biggest canola exporter, and usually the No. 2 wheat exporter, but the bottlenecks have left crops land-locked.

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