WINNIPEG – If bulk grain handlers aren’t careful, they could end up in
the same boat as the makers of fountain pens.
Promoters say there is a growing demand from the marketplace for grain
to be shipped in containers rather then handled as a bulk product
through big concrete elevators.
But they also say the demand for more containers is running up against
a well-entrenched bulk handling industry with a vested interest in
maintaining the status quo.
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“The ballpoint pen was not introduced and promoted by the fountain pen
industry and I’m not sure the bulk handling industry has the incentive
and interest to promote containers,” said Barry Prentice, head of the
University of Manitoba’s Transport Institute.
He said grain companies might be well advised to take the initiative
and develop container loading and handling facilities of their own.
“Maybe they should be out ahead of this as opposed to waiting for
something to sweep over them,” Prentice said in an interview at the
conclusion of a conference on the future of shipping containerized
grain.
“We’re not making this up. There are real forces that are out there and
either they join them or they fight them and sometimes it’s better to
join.”
The one-day meeting in Winnipeg brought together 20 speakers
representing every facet of the container industry, from railways and
steam ship companies to port officials and farmers.
Even a company that makes bags that go in the containers was on hand to
talk about the logistics involved in loading and unloading.
The conference was designed to talk about the challenges and benefits
of shipping containers and most speakers were enthusiastic about the
future.
That optimism is based on an increasing demand for identity-preserved
shipments of such things as organics and non-GM crops and crops with
specialized quality traits. Also, there is a growing desire among
safety-conscious consumers to be able to trace food shipments back to
their farm of origin.
“The time has come to put our attention and effort on how we can ship
these products in identity-preserved form,” said Lyle Minogue, a farmer
from Lacadena, Sask.
No one questions that shipments of containerized shipping are on the
increase, but no one suggests it is about to displace the bulk handling
system.
Keith Bruch, director of grain operations at N. M. Paterson and Sons,
said containers account for three to five percent of total grain
shipments out of Western Canada.
In the 2000-01 crop year, dry bulk grain vessels loaded out 23.7
million tonnes at Canadian ports, while grain containers accounted for
768,000 tonnes.
Bruch said containers have the potential to reach 10-15 percent of
total movement, based largely on increased demand for shipments of
identity-preserved grain and grain products. But he said there is a
limit on how much grain will ever move in containers.
Containers lend themselves to new and developing markets or grain being
shipped to specific customers in relatively small volumes.
“But as demand grows and more players get into the market, you’re
forced to find the cheapest way to ship it, and that tends to be bulk,”
Bruch said.
Jake Kosior of Supply Chain Solutions International, has studied the
relative benefits of containers versus bulk for different kinds of
grain and grain movements.
He sees a strong future for containerized grain, based on the changing
crop production patterns in Western Canada, growing demand from
customers for traceable, identity-preserved grain and food products,
and the favourable economics of small volume shipments for some
customers.
“It’s not going to supplant bulk, but the two of them can work well
together,” he said, adding he thinks containers have the potential to
take up 20 percent of total grain movement.
Kosior said a key factor in container demand is the processing capacity
of the end-user. Big plants that process 800-1,000 tonnes of grain,
oilseeds or pulses per day need large volume, bulk shipments.
“But if you’re talking about customers with a capacity of 400-600
tonnes or less, that’s the customer the container is meant for.”
Figures presented at the conference indicated that it’s anywhere from
$9-$17 US a tonne cheaper to ship product to Europe in bulk than to
ship containers loaded on the Prairies.
But Kosior said there is no reason container shippers can’t offer
discounts to match those bulk rates.
The availability of empty containers on the Prairies is also a key
issue. Representatives from the railways and container line companies
said that’s because loaded containers from overseas end up in populated
urban areas. So empties have to be shipped to the Prairies to load
grain.
“If the grain was in Toronto where the empties are, I think we’d be in
business,” said David Cardin, president of Maersk Canada, a major
container shipping company. “But it happens to be out here in the
Prairies and we have another transport leg that has to be covered along
with depot costs of maintaining the containers, so the supply side is
really a costly part of it.”
However, Prentice said rail cars travel empty to the Prairies to pick
up bulk grain and vessels arrive empty at Vancouver to load it out.
“It’s nonsense to think we can’t bring the containers in empty,” he
said. “The question is, who really wants to do it?”
