Reports of a logistical nightmare unfolding on the West Coast don’t ring true with Canada’s grain monitor.
Glen Pownall, managing director of Peter Cremer Canada, a Winnipeg based grain trader, said ship loading has slowed to a crawl.
“It has been pretty painful lately being able to get any access to fobbing capacity (transferring grain to a ship) on the West Coast, really, due to bad weather,” he said.
“We’ve had rain delays, snow delays. I’ve never seen the loading this bad out there. It’s terrible.”
It rained a record 28 out of 31 days in Vancouver in October. The city received 203 millimetres of precipitation that month, which is well above the normal amount of 121 mm.
Lately the snow has been the problem. There has been 11 days in February with snow on the ground and accumulations up to 20 centimetres, which is unusual.
“We haven’t been able to get much on ships at all lately,” Powell said.
Mark Hemmes, president of Quorum Corp., which is Canada’s federally appointed grain monitor, doesn’t see the same nightmare scenario Pownall is talking about.
“I don’t know where he’s coming from on that one,” he said.
“I’ve been doing this for 18 years, and it’s not bad right now.”
West coast ports had shipped 14.03 million tonnes of grain through week 27 of the 2016-17 shipping season. That is down seven percent compared to last year, but last year was a “dream year.”
This year’s total is nine percent higher than the previous five-year average.
Hemmes said it isn’t a perfect shipping season by any means, but it doesn’t come close to the disaster of 2013-14.
“If you use that as the benchmark of really, really bad performance of the whole supply chain, right now doesn’t look so bad,” he said.
“The biggest challenge right now hasn’t been the ports; it has been in allocation in the country and trying to get through the mountains.”
The Ag Transportation Coalition says Canadian National Railway has supplied 91 percent of the hopper cars during the week they were wanted so far this year. Canadian Pacific Railway’s performance is poor by comparison at 77 percent.
CP has also faced challenges getting its trains through the southern Rockies, where snowfall has been “phenomenal.” The railway has had to do avalanche control.
“They bring down the side of the mountain and it takes them 12 hours to dig out the track,” said Hemmes.
The problems inland are leading to a pile-up of vessels on the West Coast. Twenty-six ships were waiting to load grain in Vancouver as of week 28 compared to the one-year average of 18. Another four were waiting at Prince Rupert, compared to the average of two.
“That’s concerning,” he said. “The guys at the port, they’re just pulling their hair out because you’ve got to find a place to park these things.”
Twelve of the 26 ships in Vancouver have been waiting more than three weeks to be loaded with grain.
The good news is that ocean freight rates are extremely low right now, which significantly re-duces demurrage costs.
Hemmes disagreed with Pownall’s assertion that fobbing capacity is hard to find. He tracks that closely and capacity is available to companies willing to pay for it.
He believes the problem Pownall is facing might have something to do with the fobbing partner he is working with.
“If they’re a grain company, their business is going to come first,” said Hemmes.