TORONTO – Although it garnered little more than a passing mention in the official program of the Canadian Special Crops Association’s convention, there is one ongoing irritant that will dominate the board’s attention during the 2005-06 crop year.
“Transportation will be the number one issue to continue to work on in the following year,” president Steve Foster told delegates at the convention.
That brief sentence was one of the few moments devoted to the topic during the formal presentation section of the conference, but there was plenty of talk about grain movement in hallways and during closed-door meetings.
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CSCA executive director Francois Catellier was particularly outspoken during an interview in which he called for an industry-wide summit on what has become a perennial problem for shippers of agricultural commodities.
“The whole systems and strategies that are used for transportation need to be overhauled in order for Canada to regain its reputation as a reliable supplier,” he said.
Catellier was echoing a report he wrote that was distributed to delegates before the conference in which he said it may be time for the federal government to take a page from Agriculture Canada’s book by establishing a transportation policy framework.
Catellier’s call for a revamped transportation policy was prompted in part by a conference he attended in Montreal this spring where the Shipping Federation of Canada concluded North America’s logistics network could carry more cargo if the players worked together more efficiently.
“We have an industry that is operating on yesterday’s strategies,” Catellier said, which has huge ramifications.
He said Agriculture Canada is in the process of launching a national branding strategy to bring more marketing clout to Canadian agri-food products.
“All of that will be for naught if we can’t deliver on the basic theme of being available when people want our crops.”
Special crops shippers have heard many complaints recently, contributing to Canada’s growing reputation as an unreliable supplier due to longstanding problems in securing containers and delivering commodities in a timely fashion, Foster said.
It’s a situation that is going to get worse as China’s economy grows and usurps more containers for its growing export business.
The steamship lines that own the containers have told the association it is more lucrative to send empty boxes to China where they can fetch repositioning rates of $2,000 to $3,000 US rather than fighting with a processor in Saskatoon that doesn’t want to pay a $400 repositioning fee to fill the boxes with special crops.
Although they can make more money on a two-way haul, the 20 to 30 day cycle it takes to send a container to the Prairies and wait for its return is a huge deterrent for steamship lines.
“It’s not a real money-making option for them,” Foster said.
China’s voracious appetite for containers is forcing prairie processors to get their commodities to port by other means and then stuffing them into containers once they reach the West Coast.
However, a recent truckers strike at the Port of Vancouver has demonstrated how risky that can be.
Container demand from the Far East is also taking boxes from the Port of Montreal, so shippers sending commodities such as lentils to the Middle East are experiencing costly waiting times.
That is leading to a surge in customer complaints, Catellier said.
“The end result of all these problems is Canada could be losing footing to competitors we never thought of before like China because they have access to better transportation infrastructure, believe it or not.”
He said the association’s transportation committee will get all the players together on a regular basis to resolve some of the container problems.
However, the long-term solution to Canada’s transportation woes requires government intervention and the input of all of the country’s commodity shippers.
