WINNIPEG – Thunder Bay’s future looks precarious at best, according to two experts at the University of Manitoba’s Transport Institute.
John Heads and Arthur Wilson project grain exports through the East Coast have likely fallen as far as they will go. But Lakehead terminals will face increased competition from other East Coast routes in the future.
The two academics presented their research at the Canadian Trans-portation Research Forum, held here at the end of May.
By 2005, the professors said they expect seven million tonnes of the six major grains to move east.
Read Also
Russian wheat exports start to pick up the pace
Russia has had a slow start for its 2025-26 wheat export program, but the pace is starting to pick up and that is a bearish factor for prices.
But as rail transportation becomes more efficient, shipping direct to the Bunge transfer elevator at Quebec City could become more attractive than moving grain through Thunder Bay.
Heads said grain companies already ship some grain direct to Quebec City in the winter, but use Thunder Bay when they can to capture terminal elevator charges.
“That competitiveness of Quebec is going to increase over the years, because it’s all rail, and rail productivity is increasing,” Heads explained.
“Water productivity is also increasing, but it’s got a problem and that’s the size of the locks on the seaway.”
Depends on dollar
Moving grain through the U.S. to the Gulf of Mexico by rail or rail and barge also has potential, they said. However, these routes would depend on a stronger Canadian dollar.
Barge rates vary widely according to season and demand, Wilson noted, and access to the Mississippi River system isn’t guaranteed.
Also, ocean freight rates are lower from the Gulf of St. Lawrence to export destinations than they are from the Gulf of Mexico, making the Quebec City elevator a more likely option.
Wilson told the conference Thunder Bay could improve its short-term competitiveness if it made a number of changes:
- Terminals would have higher turnover if owners formed a consortium and provided more specialized terminals. This would also mean vessels wouldn’t have to travel to several terminals to get a full shipment of grain.
- A joint terminal railway would mean less switching between CN and CP lines, especially if there were fewer and more specialized terminals.
But in the long run, costs for vessels are beyond anyone’s control, Wilson said.
