TOKYO, Japan – Members of a trade mission to Japan last week tried to reassure customers that shipping delays are being resolved.
“What the (Japanese agriculture) minister wanted to know, what the Japanese Food Agency wanted to know and JOPA (Japanese Oilseed Processors Association), grain millers and feed manufacturers wanted to know was: Does Canada take this very seriously, are we doing something about it,” agriculture minister Ralph Goodale told reporters accompanying the trade mission.
Not taken lightly
“I made that case in the strongest possible terms that just as this predicament severely aggravates Canadian farmers, it also aggravates the customers and we take the problem very seriously.”
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Goodale updated the Japanese on how the backlog is being cleared, how the grain and transportation industries met to address problems and that railways have announced investments in locomotives.
He also outlined a longer term strategy.
“We are actively working on a system of rewards and penalties to make the whole system more accountable and more reliable. They were anxious to know that.”
Goodale is awaiting a proposal from the Canadian industry on that and he is not sure if the result will be a purely commercial arrangement where contracts will set out rewards and penalties for performance or whether there will be a legislative means of enforcement.
A solution to the problem can’t happen fast enough for Lorne Hehn, chief commissioner of the Canadian Wheat Board, who is also traveling with the trade mission in Japan.
“They have growing concerns about service. Our reputation is not untainted,” Hehn told reporters.
During this winter’s shipping delays, when as many as 50 ships were waiting to load grain at the West Coast and the wait was as long as 35 days, the board had to stop seeking new business. It could bid only on business from long established customers such as Japan.
Damage to reputation
Hehn said the situation has improved and the board should be back to a normal shipping pattern by April 10, but the damage to farmers’ wallets and Canada’s reputation has been great.
He said the Japanese can understand delays due to winter storms and avalanches, but are more concerned, as is he, about a deterioration in the average performance.
“We used to average between 4,000 and 5,000 (car) unloads a week at the West Coast on a very consistent basis. But we have only got over 4,500 once this year,” he said.
Last fall the board set a target of 4,800 unloads a week, except for the Christmas period. “Ever since the 17th of November, we have been below that target.”
In the early 1990s, the system was able to load more than 4,500 cars at the West Coast more than 20 weeks out of the year.
Also frustrating is the impact on small-scale customers.
Japanese millers can store enough grain to tide them over disruptions. But smaller mills manage supplies on a “just in time” basis, said Darrell Bushuk, head of Asian market
development for the board.
“They really rely on running their stocks down to a week or so of stocks before getting a new vessel in.
“You make investments in market development trying to encourage customers to
change what they are doing and buy your product and then you run into the situation where you can sell them anything,” Bushuk said.
“The whole idea of market development is to send your team in to prepare the groundwork and follow up,” said Hehn.
“We are in a situation now where we can’t always follow up.”
