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Grain flow good in open market

Vancouver has excellent fall | No major complications seen in early months following end of CWB monopoly

WINNIPEG — Grain is rushing through the Canadian transportation network in the first months after the death of the CWB’s export monopoly.

“Overall, things are looking pretty good,” said Mark Hemmes, manager of the federally appointed grain system monitor Quorum Corp., in a speech during the Fields on Wheels conference Nov. 6.

That perception dominated the conference, which is the grain industry’s annual logistics forum. Not only has the system not broken down as a new set of logistical signals were switched on, but remarkable efficiency gains have been seen since Aug. 1.

“For the first 13 weeks of this year, we have started to bust unloading paradigms, between both railroads in co-operation with grain companies, about capacity in Vancouver,” said Canadian Pacific Railway grain shipping manager Murray Hamilton.

“Is this the new norm? Is that what’s going to be sustainable going forward?”

Car unloading totals in Vancouver are at levels almost unimaginable 10 years ago, while shipping through Thunder Bay has hit near-record levels in recent weeks and the port of Churchill has seen good grain flow.

The lack of significant problems in the grain transportation business is a pleasant surprise to many in the Canadian grain industry, considering that the CWB played a dominant role in many aspects of the grain logistics system, from organizing sales to ordering and organizing rail car allocation to directing grain to port terminals.

Many players, such as grain companies, some farm groups and grain merchants, argued for years that the system could be more efficient without the CWB’s involvement because it added an extra layer of complexity to the system.

However, many of the same players feared the switchover could reveal unforeseen gaps in the system or faulty structures as the new system evolved.

Those problems have not materialized.

“Is this all about the CWB? I’m not ready to say that yet,” said Hemmes. “But I can tell you that things are looking really good.”

The industry had more than a year to prepare for the end of the monopoly, with federal agriculture minister Gerry Ritz making it clear as soon as the Conservative government won a majority that he intended to kill the board’s monopoly powers.

Hemmes said he believes the railway companies didn’t want to be the cause of system problems so they knuckled down to ensure that didn’t happen.

“The railways went into this crop year with a mindset that said nobody’s going to (be able to) blame us for this, so it’s working,” said Hemmes.

Hamilton said the months before Aug. 1 were a harried time, with a feeling of “organized mayhem” within his company as it prepared for the new logistics signals.

Weekly Vancouver grain car unloads of more than 4,500, well above the 4,000 per week average of the past five years, revealed extra capacity that has been hiding within the system.

Hamilton said CPR’s new chief executive officer, Hunter Harrison, is pushing his grain people to find more.

“He is absolutely convinced that there is more capacity out there,” said Hamilton.

“Between railroads and grain companies, I suspect we’re going to get to a brand new paradigm of efficiency in Vancouver.”

Hemmes said many aspects of the new system are still new, and it’s too soon to tell how well they will do in the long run.

However, the system has made the transition remarkably well in the first three months since the ending of the CWB monopoly. Combined with last year’s good performance, it’s a reason to be optimistic.

“Is this sustainable,” he said. “Well, let’s hope so.”

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