Canada’s much-criticized grain handling and transportation system showed what it’s capable of in the first three months of the 2007-08 crop year.
In its latest report, the federal grain monitoring agency indicated that during the first quarter of the year, grain moved through the system faster than any time in the eight years the agency has been keeping track.
“The first quarter numbers showed what the system is capable of when it’s running on all cylinders,” said Bruce McFadden of Quorum Corp., the Edmonton based firm that acts as federal grain monitor.
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“It’s some pretty impressive efficiency and volume statistics.”
Some of the key numbers include:
- Grain spent an average of 56.1 days in the supply chain from country elevator to a vessel at export position. That’s half a day less than the record low 56.6 days recorded in 2005-06. In 1999-2000, the first year of monitoring, grain spent 69.4 days in the system.
- The average rail car cycle time for all movements was 15 days, down from 16.8 days in 2006-07 and among the best quarterly performances ever.
- The average transit time for a loaded grain car moving from country to terminal position was a record low 7.3 days.
- Grain was in storage in country elevators for an average 29.2 days, down from 30.7 in 2006-07 and 41.7 when monitoring began eight years ago.
- Primary elevators turned over their capacity at an annualized rate of 7.2 times, up from 4.8 times in 1999-20åç00. That mainly reflects a reduction in storage capacity.
McFadden said those numbers reflect a strong demand for grain during the period and no operational problems throughout the system.
“Generally speaking, high volumes are key to efficient performance.”
However, he cautioned that those impressive first quarter results won’t be maintained throughout the entire crop year.
Over the year there are bound to be operational problems, such as bad weather and labour disruptions. For example, rail operations are invariably slowed by harsh winters.
McFadden said that makes it crucial that all stakeholders implement plans to enable a rapid recovery from those inevitable disruptions.
“The issue is does the problem drag out indefinitely and exacerbate the pain for the shippers and marketers, or is there the ability to return to normal operations within a reasonable time period?”
He said Canada’s track record on that front in recent years has not been that good.
The best way to deal with it would be to build surge capacity into the system, but that means carrying costs when the surge capacity is not being used. On the other hand, he said, there are also costs when the system falls behind and can’t catch up.
Generally speaking, statistical performance of the grain handling and transportation system has shown improvement during the eight years that the monitoring agency has been in place. However, McFadden noted the question is whether it has improved enough.
Consolidation in the primary elevator network has had a major impact on railway operations.
In 1999-2000, the railways provided service to 976 elevators at 685 locations across the Prairies.
Today, they provide service to 338 elevators at 274 locations.
