After quadrupling the volume of grain shipped in containers last year, the Canadian Wheat Board expects to double that again this year.
The board shipped 4,500 containers holding 102,000 tonnes of grain in 2006-07, up from 26,000 tonnes the year before.
“We’ll try to double that number in 2007-08,” said Mark Dyck, manager of rail logistics for the CWB. That would make the board one of the biggest single shippers of containerized grain.
Ocean freight rates for bulk commodities are at record high levels, making it more economical to ship to some destinations by container than in bulk.
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While he didn’t have current figures at his fingertips, Dyck said that in mid-summer it was about $5 a tonne cheaper to ship grain to Asia by container than bulk.
“That has driven some of our customers who normally ship in bulk to switch to containers because it’s cheaper for them,” he said.
That’s despite the fact that shipping in containers involves additional labour and handling costs.
“It’s an abnormal situation.”
The board is also taking advantage of the fact that the rates on containers moving from the Prairies to Vancouver are cheaper than rates on containers moving inland.
“There’s lots of empty containers available,” Dyck added.
“It’s booking capacity on boats that’s going to be the problem.”
For the vast majority of the wheat board’s container shipments, grain is shipped in bulk to Vancouver and stuffed into containers at the port. That’s much cheaper than filling containers on the Prairies and shipping to port at higher intermodal freight rates.
Dyck doesn’t expect the current situation to continue indefinitely.
The high freight rates and strong demand for shipping will encourage the construction of more bulk carriers, thus easing the pressure in the market and reducing rates.
In the meantime, Dyck said, the board will continue to move as much grain by container as it can.
Even if the board doubles its container shipments this year to 200,000 tonnes, that will still represent just a fraction of the roughly 15 million tonnes of grain the agency expects to ship in 2007-08.
Most containerized grain shipped through Vancouver is special crops such as peas, lentils and soybeans, and products such as canola oil and meal and processed alfalfa and hay.
