Grain shippers aren’t cheering too loudly about record grain movement in the 2014-15 crop year, and warn that costly grain backlogs like those in 2013-14 may recur.
“We don’t want people to read about this and say: ‘problem solved,’” Wade Sobkowich, executive director of the Western Grain Elevator Association (WGEA), said in an interview. “It’s not solved.”
WGEA members were mostly happy with their rail service last crop year, he said, but it was a drop in other rail traffic, including oil, that freed up capacity to move more grain. Grain movement was already at full throttle when the crop year started because of a record 77-million-tonne crop in 2013. The federal government’s order that the railways move at least one million tonnes of grain a week or face fines also contributed, as did a milder winter in 2014-15 and good export sales.
“Now is the time to prepare for the inevitability of demand for rail service from all industries converging at a high point again,” Sobkowich said.
“If those forecasts are accurate then long-standing, systemic system failures will re-emerge.”
Last record in 1983-84
A record 35.8 million tonnes of bulk grain were loaded from western port terminals, says the 2014-15 annual report released last week by Quorum Corporation, Canada’s government-appointed grain monitor. That’s up 15 per cent from 31.1 million tonnes in 2013-14 and slightly more than the previous record of 31.9 million set in 1983-84, said Quorum’s president Mark Hemmes.
“More grain moved through the grain-handling and transportation system (GHTS) in the 2014-15 crop year than at any other point in the history of the grain-monitoring program (GMP),” Hemmes said in an email. The GMP began in 2000, but includes data from 1999, Hemmes said.
Several post-1999 records were set including:
- 20.6 million tonnes of grain shipments from Vancouver ports;
- 6.2 million tonnes from the Port of Prince Rupert;
- 8.5 million tonnes from Thunder Bay.
“Both the first and the fourth quarters (of 2014-15) saw shipments reach over 10 million tonnes for the first time in the history of the GMP,” the report says. “These gains marked a high-water mark for the GHTS, which benefited from a strong and steady inbound flow of railway hopper cars.”
The record 54.86 million tonnes of Canadian crops exported between Aug. 1, 2014 and July 31, 2015 was just slightly higher than 2013-14 exports of 53.8 million, Statistics Canada data shows.
Less efficient but more grain
The system, as measured by slightly longer rail car cycle and grain transit times, was a little less efficient than in 2013-14… “but it moved a hell of a lot more grain,” Hemmes said. “The minute reduction in efficiency is an anomaly. The bottom line: for everybody from the country to the port terminals, it was a far, far better year overall.”
Both the grain companies and railways were happy with their performance.
“I think we have demonstrated that if the railways move more we will keep up with that,” said Sobkowich, whose organization represents Western Canada’s major grain companies. “It takes away the rail argument about operating 24/7.”
Canadian National transported record volumes of western grain in 2014-15 — up five per cent from the record crop production year of 2013-14,” Mark Hallman, CN’s director of communications and public affairs, said in an email
It shows government-ordered minimum grain volumes in 2014 were unnecessary, he added.
Minimum grain volume mandates and extended interswitching should not be extended when they expire this summer, Hallman said. Commercial relationships and a stable regulatory environment are essential for a well-functioning system, he said.
Canadian Pacific (CP) spokesman Jeremey Berry credited their performance, in part, to CP’s dedicated train program (DTP), which allows shippers to manage cars.
“CP does not favour one product or commodity over another and is well positioned to move grain in line with the needs of its customers,” Berry wrote in response to claims otherwise. “CP is committed to hauling grain and has continuously delivered on this commitment by moving record amounts.”
Berry also said to be more efficient the system must operate around the clock.
Railway improvement needed
The railways have to provide more consistent service first, countered Curt Vossen, Richardson International’s president and CEO. Ten to 45 per cent of the time there are no cars unloading at port terminals, he said in an interview citing data collected by the Ag Transport Coalition, which includes grain companies.
“What we’ll have (when operating 24/7)… is guys sitting around twiddling their thumbs waiting for cars that aren’t going to show up,” he said.
More grain moved in 2014-15, but often not when the railways said it would, Vossen said.
“That means you’ve got… vessels waiting for grain that doesn’t get there,” he said. “At a high level they moved more grain. Are we happy with that? Yes, but there are a lot of other measures that aren’t really reflected and many of those speak directly to the efficiency of the system.”
Hemmes has often said Canada has the best grain-handling and transportation system in the world and 2014-15 demonstrated what’s possible.
“But when you’ve got that long of a haul and the terrain, geography and climate we have to go through, having the best system isn’t good enough,” he said. “Best isn’t going to cut it if you can’t be reliable.”
For more information, get the full report on the Quorum Corporation website.