Grain transportation faces post-pandemic challenges

Grain transportation was a smashing success during the first year of the pandemic, but post-pandemic times might contain some challenges revealed during COVID-19.

That’s the view of agricultural economists Richard Gray of the University of Saskatchewan and Mohammad Torshizi of the University of Alberta.

“The COVID-19 experience demonstrates that if industry recognizes that change is necessary and inevitable, it can innovate very quickly,” they wrote in an article in a special issue of the Canadian Journal of Agricultural Economics.

“The agriculture and food sector was profoundly challenged with the need to continue to feed the world on a daily basis despite the widespread closure of restaurants and the changing operating practices at every point in the supply chain. Thankfully, the sector was able to respond to the enormous challenge with relatively few COVID-19 related deaths and very few incidences of food shortages.”

The analysts found quick adaptation in all the main forms of grain transportation.

Freighters were able to practise great social distancing due to their small crews and physically distanced situation on ships afloat on the water.

Making that distancing even more extreme probably helped prevent disruptions.

“The isolation of these crews was intensified by the shipping companies and the measures imposed by local port authorities. As a result, the supply of these services was largely unaffected by COVID-19 illness.”

The pandemic will likely not cause any increased problems to bulk ocean shipping.

Rail records were set in 2020-21 as years of investments and improvements by railways, ports and grain terminal operators were employed while competing commodities were largely not vying for shipping capacity.

That’s where future challenges will possibly come, the economists say. Once the pandemic is over, there will be more competition for shipping space on rail.

“The greatest risk to the rail transport of grain would appear to be a post-pandemic boom in the shipment of other goods that would make the railways less able to respond to unanticipated increases in demand.”

Despite widely reported problems with empty container scarcity, containerized exports increased during 2019-20, which includes the most disrupted part of the pandemic.

Empty container traffic increased in the second half of 2020, but containerized grain traffic continued at a good pace.

“Fortunately, the reported container scarcity did not result in reduced container-based export of grain, which continued at record pace in the last four months of 2020,” they write.

“On a calendar year basis, the 2020 exports of six million tonnes exceeded the previous record of 2019 shipments by more than a million tonnes.”

However, the shortage of containers to meet all the demand highlights a problem that could become worse in the post-pandemic world “if there is a post-pandemic economic boom in overall container demand. For a growing number of high-value markets, there are no good alternatives to containerized movement.”

Gray and Torshizi see the trucking industry’s decentralized nature, the isolated driver basis, and less competition from other shippers allowing grain shipments to flow well despite new restrictions. Companies, drivers, shippers and regulators shifted quickly.

“The protocols for the pick-up and delivery of farm inputs, farm produce and intermediate or final processed goods to grocery distribution centres were quickly modified so that they did not require a trucker to leave the safe confines of their truck,” they write.

“With the minor regulatory changes, the trucking sector, by and large, has been able to meet the demand for trucking services during the COVID-19 pandemic.”

However, the problems truck drivers faced were significant. Restaurants refused service. Service station bathrooms were forbidden to them. Crossing the Canada-United States border and provincial borders became complex. As well, it was hard to find accommodations.

The biggest challenge to the industry post-pandemic could come from the privations drivers suffered during COVID-19.

“Perhaps the isolated nature of the job, brought about by physical distancing and quarantine requirements during the pandemic, could reduce the supply of drivers, requiring a higher wage or other measures to offset.”

Gray and Torshizi praise all elements of the transportation system for being quick to adapt and to be willing to work co-operatively to meet the need to keep Canada’s part of the world’s food economy working.

If governments, regulators, grain handlers, shippers and all parts of the grain transportation system keep working together, the authors feel confident in the future performance of grain transportation.

“The resilience of the agri-food value chains to provide continual supply of safe food during the COVID-19 pandemic is an indicator of the robustness of the sector,” they conclude.

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