The trains ain’t going off the rails in the Canadian grain handling system

The following is NOT what is happening in the prairie grain handling and logistics system:


I continue to find this noteworthy, although no-one else seems to share my pleasant surprise.

I went to the annual grain logistics conference, Fields On Wheels, here in Winnipeg Friday and I expected to hear at least some small somethings about problems occurring in the grain system due to the dismantling of the Canadian Wheat Board’s export monopolies and the end of its command-and-control style of logistics. Yes, I know the grain companies, railways and ports have been handling lots of non-board grains for decades and can be expected to know how to run another set of similar commodities through the same pipeline. And I know they had a lot of time to get ready for the change. But I have just expected  to hear about small engineering glitches, since this is a massive re-engineering of one of the world’s most massive export wheat and durum crops. Shouldn’t we expect problems?

Here in Winnipeg we’re having massive problems just working-in a new garbage collection system and a new way of scheduling street snow-clearing. None of this this is bold, innovative stuff. Lots of other cities have already implemented these systems. But bringing in any new system to replace a long-used system is bound to bring on some transitional difficulties. (Two nights ago I was running out to my car at 10 p.m. in my pyjamas as a tow truck honked like a Canada goose in heat trying to get me and my neighbors to move our vehicles before he had to haul them away as the snow ploughs approached. We had not heard about the new system and assumed we’d get notice of when they were coming like in past years.)


But the new post-board system seems to be getting worked-in nicely. Grain is pouring through the system well, as are other crops, and everyone seems pretty happy. The Port of Thunder Bay is very happy: It’s receieved more in the past three months than at any other time since 1997 for this period. Producer cars are shipping fine. Everything seems to be going great.

Why is it working so well, even in this transitional period?

“Is this all about the Canadian Wheat Board,” pondered federally-appointed grain transpo czar Mark Hemmes of Quorum Corp. at Fields on Wheels.

“I’m not ready to say that yet.”

It’ll take a full season and maybe a couple of years to see how it all finally works out, but right now, everything’s ducky.


At least on the outside of the system it all seems fine. On the inside it has seemed pretty crazy at times, according to a CP Rail manager who spoke at the conf. People inside the railway were describing the first weeks after the ending of the CWB monopoly as “organized mayhem” as they switched their systems around the deal with the new reality. “That’s kind of what it was like at CP Rail,” he said, chuckling.

But even if it seemed mayhemmy at the time, they kept the trains on the tracks and flowing to port, so it’s all worked out rather well.

So far, anyway. The ugliness of the cold and snowy shipping season is only just beginning, so there’s lots of time for everything to go sideways.

But it’s certainly a good sign that the working-in period is passing without crisis. And it was nice for me to not have to cover a disaster story on Friday.


About the author

Ed White — Ed White has specialized in markets coverage since 2001 and has achieved the Derivatives Market Specialist (DMS) designation with the Canadian Securities Institute.

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