Grain shippers and farmers will have to dig a little deeper this year to ship grain through the Great Lakes and St. Lawrence Seaway.
As the 2006 shipping season got under way last week, shippers were faced with a two percent increase in tolls and other charges for moving a boat through the inland waterway system.
And those costs could go higher, depending on possible increases in pilotage charges.
Cargo tolls for a vessel travelling through the Welland Canal and the Montreal-Lake Ontario section of the seaway will total $1.25 a tonne, or about $31,250 for a typical 25,000-tonne capacity grain boat.
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Vessel charges of 25 cents per tonne will also be levied, along with lockage fees of $519.40 for each of the eight locks that make up the Welland Canal.
When all that is added up, a vessel traversing the entire system from Thunder Bay to tidewater will incur fees and charges of around $42,000, up from a slightly more than $39,000 in 2005.
Pilotage charges, compulsory fees paid for pilots to guide vessels through tricky sections of the seaway, remained undetermined last week.
The Great Lakes Pilotage Authority has increased its charges by two percent across the board and another hike in July will boost the rate on grain boats by about another 2.5 percent.
The Laurentian Pilotage Authority’s request for a 4.5 percent increase was appealed by Canadian shipping groups to the Canadian Transportation Agency, which had not issued a decision as of March 30.
Shane Foreman, manager of policy and research for the Canadian Shipowners Association, one of the groups opposing the proposed increase, said pilotage fees represent a significant and unnecessary cost for Canadian shippers.
The association believes that if vessels and crews can meet certain standards, they should be exempt from pilotage requirements.
Canadian vessels are already exempt from GLPA pilotage charges, but are subject to LPA charges.
“We feel we don’t need it,” Foreman said. “It’s a cost of doing business and we want to keep it as reasonable and low as possible, if not out of our books altogether.”
The opening of the Welland Canal on March 21 marked the earliest opening in the canal’s 177 year history. The Montreal-Lake Ontario section opened two days later.
The first laker arrived in Thunder Bay to pick up grain on March 26, while the first ocean vessel appeared March 30, the earliest such arrival ever.
A total of seven grain vessels were scheduled to be loaded at Thunder Bay last week, said a Canadian Wheat Board spokesperson.
Heather Frayne said the board expects to ship at least 500,000 tonnes a month through Thunder Bay between now and the end of July 31. Shipments after that will depend largely on new crop production and market demand.
“We are looking for a really good year and a strong program on the lakes,” she said.
Total grain and oilseed shipments out of Thunder Bay so far this crop year stood at about 3.8 million tonnes as of March 23. The board also shipped about 800,000 tonnes of CWB grain by rail from prairie points directly to export position at Montreal and Quebec City.
Grain shipments out of Thunder Bay have averaged 5.9 million tonnes over the past five years, far behind the all-time record of 17.7 million in 1984.
