I'd like to start by putting it into some kind of context. From WGA's perspective, in a perfect world no regulation--legislation or otherwise--would likely be needed. Businesses would act accordingly. All responsibilities, obligations, opportunities, and challenges could or likely would be managed to the benefit of all participants, and in particular in this case the grain handling industry.
However, it's quite obvious we're not in a perfect world. Moreover, we're in a competitive marketplace that's growing much more international, as we know and as we speak. In this context we're facing real and immediate challenging situations within our industry, and in particular with our carriers.
Again, I'd like to thank this committee for allowing us some opportunity here this morning. We're not here today to seek market intervention. We're certainly not here to ask you to hold our hands as business partners and competitors in moving our crops to valued customers domestically and internationally. Rather, we're looking to government and this committee to help reset the table with more fair, balanced, accountable, and transparent legislative improvements and reform. In our mind this is to ensure that all parties--both shippers and carriers alike--live up to their obligations and commitments to the benefit of the grain sector and its valued producers. We've come here today with a few reasons for the reform and how we've realistically come to the decision to approach both the committee and this government with the need for legislative reform.
Both farmers and grain companies, rightfully and out of great interest, have invested heavily in the western grain handling system over the last 20 years and even beyond that. More than ever, we're finding ourselves struggling to meet our contractual commitments due to carrier shortfalls, inefficiencies, and uncertain failures. The current federal legislation does very little to assist in the correction of these deficiencies.
One measure of rail efficiency is cycle times. Despite significant investments in grain handling infrastructure, cycle times have not significantly changed over the last five years. In the same period we have seen a significant reduction in railway service and, unfortunately, reliability. In this past year we have tracked the country elevator spotting performance of one carrier in particular, Canadian National Railway. We're seeing CN spot elevators according to their plan an average of 60% of the time since the start of the crop year, and 70% of the time since we started taking this measurement. To be clear, this is not CN meeting 70% of our demand as an industry; this is 70% of the car-spotting plan CN itself put into place, which has already been rationed considerably relative to the demand of the industry.
This has caused problems in planning the movement of grain from the country to export terminal positions, and has no doubt resulted in extra costs due to additional country elevator staffing on our part to meet loading requirements when cars finally do arrive, and increased export terminal costs due to the lack of reliability of arrival times of those railcars. As shippers, we are unfortunately captive in many of our locations; a grain company situated on a railway has little or no choice but to ship product on that particular railway. Services offered under terms that in our view minimize railway costs do not necessarily meet the transportation needs of the industry each and every time.
In addition, we find that the railways are offering limited car supply--much less than the demand of the industry. This is a serious concern. In times of high demand, this creates an environment of fierce competition for these cars and their services. They assume that the grain will move eventually, and we feel they are not concerned about the negative effect that untimely movement may have on the operations of the grain companies and our valued farmers.
The railways are operating in an unpredictable manner. They are simply maximizing their returns under the current legislative environment. They cannot be expected to change their behaviour until federal transportation law is amended.
As I've spoken to, under the current CTA there is a lack of balance in accountability between shippers and carriers and little obligation on those carriers to provide adequate service. As an example, companies are required to load 100-car unit trains within 24 hours, or 10 hours for 50-car units, to achieve incentives. This also puts many of our employees in stressful situations as they wait around for those cars. When we do get them there's very little time, as I'm explaining, to load those cars. We also have safety concerns that we are always monitoring and keeping our minds on top of.
In addition, once cars arrive at port position, terminal operators must unload cars within 24 hours or they are subject to railcar demurrage. However, there is no reciprocal penalty for a railway or carrier if it fails to provide service.
The matter of reliable and efficient rail service is an issue affecting other industries as well, not just ours. The WGEA has been working with a broad coalition of shippers, including farmer representatives, the Canadian Wheat Board, fertilizer and forest products shippers, and others, to try to bring forward legislative solutions and changes to the legislation. Together, these groups account for 80% of the railways' revenues.