In less than a month, a consortium of Saskatchewan based grain handlers is slated to go into business as Terminal One Vancouver.
Between now and then, the company will be scrambling to secure sufficient grain supplies to make the terminal a financial success.
That has turned out to be a challenging task, says Terminal One spokesperson Garth Gish, but he remains optimistic that and other outstanding issues can be resolved within the next 30 days.
“We still believe that operationally we can take over the terminal on
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Aug. 1,” said Gish.
“That’s always been our goal and we’re not willing to say that’s not achievable at this point.”
In early May, the five farmer-owned terminals struck a deal with Agricore United to buy its 102,070 tonne export terminal at Vancouver.
However the five companies, which together can ship about 500,000 tonnes of grain a year, must sign handling agreements with other grain shippers to meet their goal of handling at least 1.6 million tonnes at the terminal.
Gish said that has proved complex and challenging.
“We knew this was a significant challenge when we started out,” he said. “It hasn’t been a slam dunk, but we definitely are finding the interest we knew would be there.”
The problem is translating that interest into grain. All of Terminal One’s potential partners, notably the eight other independent farmer-owned terminals operating across the Prairies, already have handling agreements with the big firms that own terminals at Vancouver.
While the terms of those agreements vary, the existing terminal operators will likely want to see those contracts carried through to their conclusion.
“We have to figure out how to bridge from their existing contract to our contracts,” said Gish.
Fran Malecha, head of Saskatchewan Wheat Pool’s grain group, said it’s too early to know the impact on Terminal One.
However, with the port operating at about 70 percent of capacity, the addition of an aggressive new player is bound to change the competitive dynamics, both at the port and in terms of attracting farmer deliveries in the country.
“I think there’s a potential for (those five companies) to take a portion of their margins and subsidize that to the grower,” he said.
“I think there’s a chance for them to become more competitive in those areas.”
The five companies involved in Terminal One are Great Sandhills Terminal Marketing Centre, North East Terminal, North West Terminal, Prairie West Terminal and South West Terminal.
