GRAIN LOGISTICS STUDY IDENTIFIES OPPORTUNITIES TO BENEFIT PRODUCERS

Released on August 13, 1998

Ministers responsible for grain transportation in the four Western

Provinces today jointly released a study by McKinsey & Company,

Improving the Western Grain Logistics System, on options for improving

grain handling and transportation performance to develop a more

competitive, customer-oriented system.



In mid-May, the four Western Canadian provinces retained McKinsey &

Company to conduct an objective, third-party review of the Canadian

grain logistics system. The purpose of the study was to assess the

performance of the system against current and future customer

requirements and to identify the most significant opportunities to

redesign the entire system to improve customer satisfaction and

increase returns to Western Canadian producers. The study found an

urgent need for improvement to ensure the future competitiveness of

Canadian grain in world markets and to improve returns to farmers.



"The Western Provinces have come together in an unprecedented fashion

to address and issue of critical importance to the regional economy,"

stated Walter Paszkowski, Alberta Transportation and Utilities

Minister. "This report clearly emphasizes the need to address all

aspects of the grain logistics system in any attempt to substantively

resolve performance problems."



"Western farmers deserve the most modern and efficient grain

handling and transportation system in the world," said

Saskatchewan Minister of Highways and Transportation Judy

Bradley. "Any changes to the system must increase returns to our

producers."



"The finding that root causes of under performance exist across

the entire system clearly highlights the need for significant

change," observed Manitoba Highways and Transportation Minister

Glen Findlay. "The system blueprint proposed by McKinsey

demonstrates the need for action to improve customer satisfaction

and lower system costs while providing attractive opportunities

for farmers."



"The study shows improved coordination and information flows are

critical for maintaining the competitiveness of the Canadian

grain transportation system, including Canada's ports," said

Harry Lali, B.C. Transportation and Highways Minister. "We

cannot afford poor ship loading performance and other port

terminal problems that may cause our customers to go elsewhere."



As indicated in the joint Western Provinces Phase I submission to

the Federal Grain Review, the study will be provided to Mr.

Justice Willard Z. Estey to assist him in developing

recommendations for improving the grain handling and transportation system. It will also be distributed to stake holders to stimulate discussion on options for restructuring the grain handling and transportation system for the 21st century.



"It is critical that system problems are effectively addressed so

that the freight costs for Western farmers can be reduced,: said

Manitoba Agriculture Minister Harry Enns.



"The problems in the existing grain handling and transportation

system are having a serious negative impact on Prairie producers," commented Alberta Agriculture, Food and Rural Development Minister Ed Stelmach. "I and my Western colleagues are committed to pressuring the federal government to change that."



While the study does not necessarily reflect the views of any

provincial government, all Western jurisdictions agree that it is

a significant effort in advancing a holistic review of the entire

grain logistics system.



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For further information, please contact:

Bernie Churko

Saskatchewan Highways and Transportation

Phone: (306)787-4866



Melanie Courchene

B.C. Transportation and Highways

Phone: (250)387-8082



Dwight Dibben

Alberta Transportation and Utilities

Phone: (403)415-0689



Don Norquay

Manitoba Highways and Transportation

Phone: (204)945-1967