The historic grain port at Thunder Bay, Ont., is in danger of sharp decline if increasing volumes of grain continue to bypass the port by train on the way to eastern elevators, said a Thunder Bay port executive.
Tim Heney, chief executive officer of the Thunder Bay Port Authority, said the Canadian Wheat Board is part of the problem by largely refusing to use ocean-capable vessels for its shipments out of the port situated on Lake Superior. It means CWB grain must be shipped on laker vessels from Thunder Bay to transfer elevators in the lower St. Lawrence, which adds to the cost.
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It leads to more direct train transport from the Prairies to Quebec transfer elevators. An average annual 850,000 tonnes are shipped by rail past the elevators that have defined the Thunder Bay skyline for decades.
“This is the primary threat to the port of Thunder Bay,” Heney said during a Nov. 21 appearance before the House of Commons agriculture committee.
“The Seaway’s nine-month operating season is often used as rationale for this movement. However, currently five trains per week or about 60,000 metric tonnes are bypassing the seaway and our port will remain open until early January.”
He said the loss of import cargo in the 1980s has made the port largely dependent on grain exports. And these have been declining.
Heney told the MPs that the impact of railway shipments bypassing the port is a loss of $50 per tonne in freight charges. Had those 850,000 tonnes used the Seaway, it would have added more than $42 million to Seaway revenues.
The wheat board disputed Heney’s claims.
Ward Weisensel, CWB chief operating officer, said in a Nov. 24 interview the board is not using ocean-capable vessels now because ocean freight rates are high and it is cheaper to ship through the Seaway on lakers.
But in 2004, the board shipped 864,000 tonnes on ocean-capable vessels, almost one-quarter of its eastward shipments, and last year, 261,000 tonnes.
“We use a lot of salties,” he said. “It is a function of availability and relative costs.”
He said the current rail shipments around Thunder Bay are a matter of necessity.
“We are operating through Thunder Bay at full capacity right now,” said Weisensel. “We could not ship more through the port so to get the extra grain to where we need it, we need to use rail.”
Heney said Thunder Bay still has nine terminal grain elevators, sustained because they are owned by competitors. But they are underused.
“The last five years have been the lowest five years (in grain handling) in the history of the port and grain,” he said.
“How much lower can it go? It’s always a question. We don’t know. You will start to see elevators lost during consolidations of companies. Beyond that, it seems to be sustained by that distinct ownership.”
The Thunder Bay port executive said the government and its agencies can make changes that would help, including directing the wheat board to use ocean-going vessels for its grain. Non-board grain that typically makes up 35 percent of shipments has no problem using ocean-going vessels.
Heney also suggested that the government instruct the Canadian Grain Commission to adjust to grain industry efficiency standards by making inspectors available whenever grain needs to be checked.
