The business adage that you can’t change what you don’t measure seems to fit the Prairie grain transportation system.
In a presentation to the annual conference of the Canadian Agriculture Economics Society, Mark Hemmes, president of Quorum Corp., which tracks the performance of the grain transportation and handling system for Transport Canada, used the numbers his company has collected since 2001 to illustrate how the system has changed from farm to port.
In the process he created a powerful argument for better collection of transportation data. That was a recommendation in the Emerson report on the Canada Transportation Act Review released about a year ago and has been taken up by many carrier and shipper groups. Transport Canada officials have said they’re working on a model for a third-party data collector, possibly based on the operation of the grain transportation monitor.
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Overall Hemmes says the system is “going well this year.” While communications among railways, grain companies and terminals has improved, car allocation is an ongoing challenge. Canada’s dependence on exports is being assisted by low ocean freight rates, which now are in the $5,000-a-day range, compared to $20,000 a day in recent years.
Among the trends borne out by the numbers are an increase in the Prairie harvest from just over 50 million tonnes in 1999 to 2013’s record of 81.9 million tonnes followed by three years of more than 70-million-tonne harvests.
West Coast ports exported a record 28.01 million tonnes of grain during the 2015-16 crop year, up five per cent from the previous year and 13 per cent higher than the five-year average.
Since 1999, the proportion of exports that were cereals has dropped from 76 per cent to 61 per cent, while canola has climbed to 25 per cent from 14 per cent and special crops edged up to 13 per cent from 10 per cent. Shipments of grain by trucks has more than doubled since 2011-12, to 3.2 million tonnes in 2014-15.
In 1999, there were 1,000 licensed elevators in 685 communities in Western Canada. As of last October, that number was down to 382 elevators in 269 communities with seven new builds expected to come into operation by the end of 2017. The storage capacity has risen to 7.8 million tonnes compared to just over seven million tonnes in 1999.
The time grain is in the storage and transportation system has dropped from just under 70 days in 1999 to about 42 days currently. Hemmes credited more efficient use of the country elevator system and faster turnover in the ports. The railway car cycle has dropped to about 12 to 14 days from 22 days in 1999. Meanwhile about 85 per cent of grain movements are in unit trains compared to 1999 when close to 80 per cent was in blocks of grain cars in mixed freight trains.
One issue that needs to be addressed is the fact that the government-provided hopper car fleet will run out of its service life by 2038, he said. It peaked in 1985 at more than 18,000 cars and this was down to just over 13,000 cars.
“It’s not something to panic about yet but we need to keep it in mind,” Hemmes said.