Larger grain supplies may pressure system

Transportation expert worries rail and grain-handling capabilities may not keep up with increased crop production

Western Canadian grain supplies have steadily increased during the past two decades and they show no sign of slowing down.

That says a lot about the productive capabilities of prairie farmers, but it also raises concerns about the ability of Canada’s grain-handling and transportation system to move greater volumes of grain each year.

Mark Hemmes, a grain transportation expert and president of Quorum Corp., says larger grain supplies will continue to put pressure on Canada’s major rail companies and on the country’s transportation infrastructure.

“The total supply of grain continues to grow,” said Hemmes, whose company has been contracted by Ottawa since 1999 to manage the federal grain monitoring program (GMP).

“For the first 10 years that we monitored (total grain supplies), the average annual growth rate was just a little better than one percent.

“But in the last six years, we’re seeing average growth rates of about three percent. If you (maintain that pace of growth) for the next 10 years, by 2030 we’re going to be seeing total grain supplies in the 100 million metric tonne area. So basically, if we don’t continue to get better at what we do, we’re going to run into some real problems.”

Speaking at CropSphere in Saskatoon last week, Hemmes said Canada’s railways and grain companies have done a good job handling larger grain tonnages.

By several measures, Canada’s grain-handling system had a record setting year in 2018-19.

Total grain supplies in the 2018-19 crop year were just a hair short of 82 million tonnes, surpassing the previous record of 81.91 million tonnes set in 2013-14.

Supplies for 2019-20 are now estimated at 83.6 million tonnes, he added.

Throughput at Canada’s primary elevators was up 7.3 percent from the previous year at a record 48.8 million tonnes and total movements by rail were up 4.8 percent to a record 54.3 million tonnes.

Total shipments through western export terminals were also up 6.4 percent to a record 37.1 million tonnes.

However, rail performance did not improve by all measures, Hemmes said.

Car cycle times for the grain industry were listed by Quorum at 15.7 days, which was even with the previous year.

Loaded transit times were up 8.8 percent to 6.6 days and out-of-car time was up 2.7 percent.

Vessel time in port also increased by 2.9 percent.

Nonetheless, Hemmes characterized 2018-19 as a good year with few major problems.

“It was a good year. We moved more grain than we’ve ever moved before,” he said.

“There were records set right across the board, in terms of volumes. I think moving the grain in the period when grain prices are highest is probably what their next focus is going to be.”

Hemmes said significant capital investments by both railways and grain shippers have resulted in a more efficient system with greater capacity.

Railways have invested in new, high-volume grain hopper cars, additional locomotive power, longer sidings and more track.

On the shipper side, the number of highly efficient loop track elevators is continuing to increase on the Prairies and investments in export terminals and port infrastructure will add additional capacity.

“(Shippers) have spent a lot of money in the country and at port terminals,” Hemmes said.

Every port terminal has spent significant funds to improve rail car unloading and ship loading, he said.

“Plus we’ve got three new terminals that are coming on line (at Vancouver). Fibreco is pretty much done; they’re already loading vessels. G3 will be done before the end of the crop year and the Fraser Port (project)” announced by P&H and GrainsConnect is moving ahead, he said.

The Port of Vancouver must address some key issues, including access to the North Shore. But the port authority has done a good job so far of addressing congestion issues and facilitating increased rail traffic.

Recent private-sector investments in West Coast grain terminals suggests that grain companies have confidence in the port’s ability to accommodate higher traffic levels.

“Vancouver is Canada’s No. 1 port. It’s serving our (top) markets and we’re selling more and more products of all types, not just grain, into the Asia Pacific,” Hemmes said.

“So I think it behooves everyone involved to do better at moving as much product through that gateway as possible.”

As of last week, there were 35 grain ships waiting to be loaded at the Port of Vancouver and eight more at the northern British Columbia port of Prince Rupert.

Hemmes said those numbers are slightly higher than average, but not completely unexpected at this time of year.

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