The Inland Terminal Association of Canada will study the Australian grain handling system for lessons from that country’s transition to an open grain marketing structure.
Executive director Kevin Hursh said some ITAC members and small shippers are concerned that access to Canadian port facilities could be affected after the Canadian Wheat Board’s single desk marketing structure is eliminated.
ITAC membership consists of 10 independent terminal operators in Saskatchewan and Alberta.
Independent terminals that handle board grain now depend on the CWB for marketing.
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Access to port facilities is ensured in the Canadian Grain Act, but there are concerns that changes to the wheat board could leave small shippers in a vulnerable position where they must negotiate with larger competitors for port access.
“A number of (ITAC) terminals don’t have direct access to port positions so we are … doing a little bit of research on the Australian model to see what they’re doing to ensure (reasonable access),” Hursh said.
“We want to see what they’ve done to try to ensure that companies that don’t (own port facilities) still have reasonable access and that the gatekeepers can’t squeeze them out of business by denying access or charging exorbitant fees.”
Not all independent terminals are in the same situation.
Prairie West in Plenty, Sask., Weyburn Inland Terminal in Weyburn, Sask., Great Sandhills Terminal in Leader, Sask., and North West Terminal in Unity, Sask., are part of a consortium that owns the Alliance Grain Terminal (AGT) at Vancouver.
Other AGT consortium partners include Paterson Globalfoods Inc. and Parrish &Heimbecker.
Two other ITAC members, CMI Terminal near Naicam, Sask., and Gardiner Dam Terminal at Strongfield, Sask., have contracts or equity agreements with Viterra, while the South West Terminal near Gull Lake, Sask., is aligned with Cargill.
Hursh said the Australian system may not be a perfect solution for unaligned terminal owners, but it offers a level of transparency that should, in theory, give small shippers a better chance to compete for and secure port access.
The Australian system requires port terminal owners to file plans outlining steps they will take to ensure that independent shippers have reasonable and competitive access to port facilities.
The Australian Competition and Consumer Commission reviews the plans, seeks feedback from producers and other industry players and can demand revisions.
Typical plans include provisions that require companies to post lineups of incoming vessels, specify loading dates of those vessels and post service fees to ensure that small shippers are getting a fair shake.
Richardson International president Curt Vossen, whose company has ownership interests at port facilities in Vancouver and Prince Rupert, B.C., said he is surprised by the level of discussion around the port access issue.
“The right to access is ensured under the Canada Grain Act,” Vossen said.
“There is no problem getting access to existing terminal capacity because it’s a right that’s enshrined in existing legislation.”
He also said excess port capacity will motivate owners of port facilities to provide competitive access to small shippers.
“There is, at every port … more capacity than there is grain … so there’s a significant economic opportunity and motivation to provide access to independents and … in fact, to compete for (that business).”
However, Hursh said it is important that Canada look at additional measures to protect small players.
“It’s not that we’re saying that access should be cheap or preferential (for small shippers), but in order to compete on a level playing field, we really do need some assurance that port access will continue.
“Many times, the terminals are hungry for extra business so access is not a problem, but that situation may not always occur.”
