Grain movement positive despite rail and port challenges

By: Dallas Carpenter

Over the last few months, the Canadian grain handling and transportation system has received a lot of attention, and not only because of the recently announced amendments to the Canada Transportation Act.

From late-season rain and snow in Vancouver to the struggle of a railway to meet demand over winter, some are once again questioning the reliability of the transportation system. The reports of vessels lined up at the Port of Vancouver this winter led to some producers speculating how transportation issues would impact them financially.

Mark Hemmes, President of Quorum Corporation, which monitors performance of the Canadian grain transportation system on behalf of the federal government, feels that the system has weathered the challenges faced this winter and that 2016-2017 has been a positive year overall for the movement of grain.

“It has been a good year, but it hasn’t been as good as 2015-2016,” says Hemmes. “15-16 was pretty remarkable in a lot of respects. Both railways were just humming. All the port terminals were performing optimally. We had pretty good performance at the ports. Our vessel lineups weren’t a big concern and time in port wasn’t a big concern.”

Part of what has kept this crop year from attaining the same service levels of 2015-2016 is inconsistent railway performance.

“On one hand, CN has performed exceptionally,” says Hemmes. “They have just been constant, all the way through the fall and through the winter, they have kept their numbers right up. CN’s volumes are higher than what CP’s are.

“CP has been challenged by a number of things. They had some staff issues through the fall and winter. They just couldn’t keep ahead. When January came, they took the brunt of what happened (with weather) through the mountains and that compounded things for them. In the last few weeks, they have started to pick things up, partly due to better management and partly due to good luck with the weather.”

Vessel lineups and unseasonably poor weather at the Port of Vancouver grabbed headlines in the winter, compounding the worry caused by the inconsistent rail service.

“We had some long vessel wait times, January and February numbers were around 18 days plus, in Vancouver,” says Hemmes. “This was concerning, as it means demurrage was being paid on vessels.

“When we got to March and April, it seems as though Vancouver went for a number of weeks straight with snow and rain, which made it difficult for ship loading at a few of the terminals. But, we’re past that.”

Having pushed through the problems of the winter, the system is now running well, says Hemmes, who expects this year could see a near record amount of grain shipped. As of week 42 (May 23) of the crop year, over 28.2 million tonnes of grain has been shipped through Canadian port terminals. While this is still almost one million tonnes behind 2015-2016, it is almost two million tonnes ahead of the five-year average.

Larger yields and increased supply have put a greater demand on the transportation and handling system, which will require changes to meet the transportation needs of producers and shippers. While the system adapts to meet new expectations, like adding more port capacity and making amendments to transportation regulations, there are bound to be a few hurdles. As Hemmes explains, this increased demand and the response of those within the system should be looked at in the right context.

“You have to put this all in perspective,” says Hemmes. “We’re at a new normal now. The first 10 years we were monitoring, the total supply was in the 60 to 65 million tonne range. Now we’re looking at supply anywhere from 70 to 80 million tonnes. So, there’s also the factor where the system is adapting to a new plateau.”

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