Thunder Bay official says volume hurt by federal subsidies to Port of Churchill
Crop shipments leaving the Port of Thunder Bay in Ontario broke a 15-year record during September and October.
Tim Heney, chief executive officer with the Thunder Bay Port Authority, said outbound shipments of grain, pulses and oilseeds during September and October were the highest for any two-month period since late 1997.
Total grain volumes through the first 10 months of 2012 are also on pace with last year, he said.
At the end of October, total 2012 grain movements through the port stood at 4.683 million tonnes, up narrowly from 4.62 million tonnes during the same period last year.
“Nobody really knew what would happen without the wheat board … so there’s always been a bit of speculation …,” Heney said.
“So far, it’s been pretty good.”
Outbound grain shipments during September and October were aided by an unusually large number of in-coming ocean vessels seeking backhaul business, Heney said.
A total of 22 ocean vessels or salties arrived at the port during September and October, Heney said.
Twelve of those arrived in October alone, the highest number for any single month since 2007.
Thunder Bay’s port facilities serve two types of ships: lakers and ocean-going vessels in the Handysize class.
Due to draft restrictions, Handysize vessels that haul grain out of Thunder Bay cannot be fully loaded.
They normally carry 23,000 tonnes of grain or less.
A fully loaded laker can haul 10,000 to 12,000 tonnes, grain that is usually delivered to transfer elevators in Eastern Canada.
Heney did not say whether movements of wheat, durum and malting barley, the grains formerly under the Canadian Wheat Board monopoly, have increased or decreased.
This year marks the first crop year without the wheat board’s single desk being involved.
Grain movements through Thunder Bay dropped significantly during the 1980s and 1990s but have been holding their own over the past decade.
Shipments last year totalled 6.3 million tonnes, up slightly from the 10 year average of 5.9 million tonnes.
Thirty years ago, the port handled a record 17.7 million tonnes.
Adrian Measner, president and chief executive officer of Mission Terminal, one of seven grain terminals at Thunder Bay, agreed that grain movements appear to be normal.
At Mission, volumes were above normal in August and September and below normal in October, Measner said.
Before Aug. 1, some grain industry observers had speculated that shipment patterns for prairie grain would be affected by CWB changes.
Some suggested that more of the prairie crop would be shipped through west coast facilities, as opposed to Thunder Bay or Churchill.
According to Measner, there have been no major surprises.
“I don’t think it’s played out too differently than what we had anticipated anyway.”
Meanwhile, Heney said federal transportation subsidies aimed at boosting grain shipments through the Port of Churchill are affecting Thunder Bay’s business.
The $25 million Churchill Port Utilization Program offers a shipping subsidy of $9 per tonne to grain companies that ship grain, oilseeds, pulses and special crops through the northern port on Hudson Bay.
The subsidies are offered on a first-come, first-served basis with $5 million available each year for the next five years.
“It’s interesting that you’re subsidizing in cash one route versus another,” said Heney. “What kind of transportation policy is that?”