The Canadian Grain Commission has taken a step toward addressing one of the shortcomings of its monthly grain export report.
It used to be that the commission published data only on bulk exports, but recently it started tracking and reporting containerized grain shipments.
“It is part of a round of improvements that were made at the start of this crop year to our exports publication,” said Kevin Morgan, the grain commission’s acting chief statistician.
“We are committed to always trying to give the fullest view of the sector in terms of where Canadian grain is going and we knew it was missing.”
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The inaugural set of data for the 2017 calendar year was published in table five of the August 2018 report. It shows that Canadian farmers shipped 3.08 million tonnes of grain by container to markets all over the world that year.
China, Japan and India accounted for almost half of that total, but nearly 100 other countries purchased some quantity of containerized cereals, oilseeds and pulses.
Lentils were the top crop shipped by container at one million tonnes followed by 876,589 tonnes of soybeans and 674,233 tonnes of peas.
The data is available only on a year-by-year rather than month-by-month basis. The hope is to eventually publish more current data, but there will always be a lag.
“I don’t think we’ll ever get to the point where the ports are telling us, ‘here’s what last month’s loads were,’ ” said Morgan.
Mark Hemmes, president of Quorum Corp., Canada’s grain handling and transportation monitor, played a key role in hooking up the grain commission with his contacts in the container industry.
“We have contacts with the bulk handlers. We don’t have the same contacts with the port authorities or the container loaders,” said Morgan.
Quorum has been unofficially tracking containerized grain movement since 2000 but thought it would be best if the grain commission published the data because of its longevity and stability.
Collecting the data has been a challenge.
“It’s not easy,” said Hemmes.
“We have a way of doing it, but it’s not perfect.”
The railways are good at reporting inland containerized grain movement, but they don’t always know what is in the containers they are hauling because shippers are required to divulge that information only if it is hazardous material.
The other problem is that 70 percent of containerized grain arrives at Canada’s ports by hopper cars and is then stuffed into containers by transloaders.
Transloaders are not licensed by the grain commission, so they are not required to report their grain handling data and are reticent to willingly divulge it to groups like the grain commission and Quorum because of competition concerns.
“Therein lies the crux,” said Hemmes.
“That’s what makes it hard for the grain commission and that’s what makes it hard for us.”
So he and others are forced to rely on the ports to provide that information. Montreal and Vancouver do a good job but the data from Prince Rupert is “kind of spotty.”
Despite the constraints, Hemmes believes they have a pretty good idea of how much grain is moving by container every year. His data set is broader than the grain commission’s because it includes other products such as canola meal.
He estimates that an average of 3.5 to 3.7 million tonnes of grain and related products have been shipped by container each year over the last few years.
“That represents between nine and 10 percent of all grain that gets exported,” he said.
Last year, farmers shipped 4.03 million tonnes, or 8.8 percent of all grain exports, in metal boxes. That compares to 4.2 percent of exports when he started tracking in 2000.
He said the uptick in containerized movement began in 2007 when bulk freight rates went sky-high as China became a voracious consumer of coal and iron ore.
Ocean freight rates on a bulk Panamax vessel averaged $60,000 to $80,000 per day during that year, eclipsing $100,000 per day during one particularly expensive week. Today’s rates are $13,000 to $15,000 per day by comparison.
Rates collapsed during the global economic meltdown in late-2008 and early 2009, falling as low as $3,500 per day and drawing a lot of shippers back to bulk. However, some discovered they liked containerized grain movement and stuck with it.
The other big factor in the uptick was the growth in pea and lentil acres on the Canadian Prairies.
The value-added crops were perfectly suited to containerized shipments because shipping crops by metal boxes is typically more expensive than bulk, so the cargo has to be valuable.
The total all-in cost of moving crops by bulk is $60 to $75 per tonne compared to in excess of $100 per tonne for containerized shipments.
Bulk rates are currently lower than the long-term average, so more product than usual is moving that way today.
Grain typically moves in 20-foot containers because growers can stuff 24 to 26 tonnes of grain in those boxes.
A 40-foot container costs twice as much but it can’t hold double the amount. The limit is 30 to 35 tonnes. Any more is dangerous.
“It will literally break the container in half, and that has happened,” said Hemmes.
Ship owners also need to be wary. They can’t load their vessels full of grain-filled containers because ships are engineered to move containers carrying an average of 11 tonnes of product.
Grain containers are placed at the bottom of the pile and empty containers are stacked on top.
“You can’t turn around and fully load a container vessel in Vancouver with grain containers because it will sink,” Hemmes said.
