PRINCE RUPERT, B.C. – At the end of a long railway track sits a big, underused grain terminal on the Pacific Ocean.
But the use issue is about to change and that means more money could find its way into farmers’ pockets.
Despite being Canada’s highest capacity grain port, Prince Rupert Grain has spent many of its 22 years idling as a second choice to the other western grain facilities located in Vancouver.
Due mainly to higher rail tariffs on the lone northwestern track that feeds the port, the terminal became second choice to Vancouver for grain shippers, said facility president Jeff Burghardt.
Read Also
Alberta researcher helps unlock the economics of farming
Lethbridge Polytechnic researcher helping agriculture producers with decision-making tools in economic feasibility
Those tariffs have shifted from a 15 percent penalty to a three percent advantage over Vancouver. And the grain is following the money.
With the start of the new grain year Aug. 1, Canadian National Railway announced an 18 percent reduction in rates on the track.
“We’ve been demonstrating to CN that we could staff the facility efficiently, working with the railway and the (bulk grain ships). Shippers and the railway saw us in action during the (B.C. Terminal Elevator Operator Association’s Vancouver worker lockout) in 2002 and since then it’s been a matter of reinforcing what we are capable of in this port and this facility,” said Burghardt.
Built in 1985 by a consortium of grain companies and the Alberta government, the terminal was heralded as the port of choice for Canada’s west coast grain shippers. The federal government played its part in the construction by guaranteeing parity grain shipping rates between Vancouver and Prince Rupert.
In 1996 the end of the Crow Benefit on rail shipping of prairie grain stopped the federal guarantee of a matching rate for the northern CN Rail route.
The 1,525 kilometre rail line through Jasper, Alta., and Prince George, B.C., seemed less appealing to shippers like the Canadian Wheat Board and its off-board counterparts.
More appealing was Vancouver via the 1,025 km route from Calgary over Rogers Pass or the 1,320 km railway over the Crowsnest from Lethbridge, especially when CN added a 15 percent tariff on transportation to Prince Rupert.
Despite the longer distance from prairie to port, the terrain is flatter on the northern route, making it a faster train trip, said Don Krusel of the Prince Rupert Port Authority.
“That means less fuel and wear and tear on the (train) running gear,” he said.
A tripling of container traffic through the lower mainland of B.C. and an increase of exports of all sorts through the port of Vancouver gradually pushed grain onto the commercial sidings and created congestion in that port, said Burghardt.
Loading delays cost grain shippers ship demurrage, which costs between $18,000 and $25,000 per day.
Prince Rupert doesn’t have those problems because there is no other significant port business or any urban pressure. The rail line that feeds Prince Rupert now operates at 10 percent of its capacity, said port officials.
Even with a huge expansion of port activity due to the construction of the new Fairview container port, the rail line will likely reach only 30 percent of its potential, said Krusel.
Prince Rupert also boasts single-berth loading of 50,000 to 66,000 tonne ships in 24 hours, which brings in early dispatching premiums to shippers.
In Vancouver, loading of large grain ships requires shifting the boats between terminals at a cost of $15,000 per move.
Burghardt said if Prince Rupert Grain reaches five million of its seven million tonne capacity for the 2006-07 grain year, it will return more than $7 million directly to prairie farmers through the CWB over what they would have paid shipping through Vancouver.
“That is money that doesn’t end up in the pockets of others. It goes to farmers, where it’s needed most,” he said.
Burghardt feels that reason alone should make his terminal the facility of choice for years to come.
