Rail not the only way to do business, Algoma Steel says

While rail transportation is vitally important for companies such as Algoma Steel to move its product to market, the steelmaker says it is not the only way to do business.

As reported earlier Genesee & Wyoming Canada Inc. (GWCI), the parent company of Huron Central Railway Inc. (HCRY), which ships out Algoma Steel’s goods, announced “we have made the difficult decision to cease service on the line in early 2020,” citing the need for approximately $40 million in capital investment funding from the federal and provincial governments over a five-year period to rehabilitate the line and safely sustain its operations. 

However, in an email sent to SooToday Monday, Brenda Stenta, Algoma Steel communications manager, while acknowledging rail’s importance to Algoma, stated the steelmaker may still get its steel to market by truck.

“Rail is the preferred method of transport for the commodities that we ship as opposed to truck. The provision of this important mode of transport is of vital importance to Algoma Steel. While we have alternative means to get our product to market, reliably, and on-time, the loss of the Genesee-Wyoming connection between the Sault and Sudbury would impact our freight costs and could result in more trucks on the roads,” Stenta wrote.

“While both the provincial and federal governments made commitments to support our long-term plan, the only recent funding received has been a modest investment from the province to temporally sustain operations. This funding allowed us to complete the minimum level of emergency repairs needed to sustain the safe operation of the line while we pursued the longer-term solution,” wrote Louis Gravel, GWCI president, in a news release.

“This transportation corridor is critical to the region’s industries and future development of northern Ontario, and our plan includes a cost-sharing model between HCRY and both levels of government...while they (the senior levels of government) recently announced substantial investments to help some of HCRY’s main customers, the railway that supports their supply chains and access to global markets hangs in the balance,” GWCI wrote.

Genesee & Wyoming Canada Inc. has operated the Huron Central line since 1997. 

“The need for this capital investment predates that time, but we remain hopeful that it can still be secured prior to our cessation of service,” GWCI wrote.

Stenta stated “CP is a valued supplier to Algoma Steel and we remain optimistic that they will achieve a resolution that ensures their continued service to Algoma Steel and other regional customers. We remain committed to working with all stakeholders towards the continued viability of Huron Central Railway.”

“I believe in the long-term viability of this project. The railway is important to Sault Ste. Marie’s economy, particularly to Algoma Steel. That’s why I have been working with the Huron Central Railway Taskforce, Huron Central executives, and officials in Ottawa to make sure that they have the support they need," replied Sault MP Terry Sheehan in an email to SooToday late Monday afternoon.