PRINCE RUPERT, B.C. – Like an understudy in a play who finally gets a
chance to perform, Prince Rupert Grain is using the lockout of grain
workers in Vancouver to show off its skills.
Most west-bound bulk shipments of prairie grain have been diverted
through the northern British Columbia port, and Prince Rupert Grain
general manager Jeff Burghardt said the terminal will use the
opportunity to show it has the expertise to handle plenty of it.
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“This is an excellent time for us to prove to Western Canada what the
capabilities of Prince Rupert Grain are,” said Burghardt from his
office at Ridley Island just outside Prince Rupert.
“It’s very difficult there should be such an extended lockout at the
port of Vancouver, but this is a good opportunity for Prince Rupert
Grain.”
Built in 1985 by a group of prairie grain companies to improve export
grain shipments, the deep water port has always played second fiddle to
the port of Vancouver, where the majority of grain is funneled.
With three full shifts, the 210,000-tonne capacity Prince Rupert
terminal can ship seven to nine million tonnes of grain a year. But
with lower grain export sales in recent years, the terminal has shipped
around three million tonnes and slipped to a low of 1.2 million tonnes
in 2001, not enough to keep the facility open year round.
Together, Vancouver and Prince Rupert can ship around 33 million tonnes
of grain a year, but have only averaged 16 million tonnes in the past
five years.
This year’s poor yields and unharvested crops have produced another
year of low grain exports. The Canadian Wheat Board estimates its total
wheat and barley export program will only be eight million tonnes of
grain, half exported through Eastern Canada and half through the West
Coast. The roughly four million tonnes of board grain destined for the
West Coast could be handled by one port.
The Canadian Wheat Board had worried that Prince Rupert Grain, with its
single-vessel berth, might not be able to handle wheat and barley
exports plus canola shipments.
But Burghardt disagreed. With 17 kilometres of rail track, Prince
Rupert can unload 350 grain cars in 24 hours, hold 600 rail cars on a
siding, store 210,000 tonnes of grain and clean and pour 3,000 to 4,000
tonnes an hour into a ship.
“We think we can make a very good case to the shippers of grain about
operating through our facility regardless of what happens with the
labour situation in Vancouver,” he said.
“We’ve loaded 92,000 tonnes of wheat in less than 24 hours. There’s
nobody on the West Coast of North American that can touch those
production rates.”
He said the terminal’s high-speed cleaning and loading facilities are a
good selling feature to get ships in and out of port quickly.
Its location 720 kilometres north of Vancouver is 30 hours sailing time
closer to Asian markets than Vancouver. Its deep water and ice-free
port allow the terminal to stay open year-round.
Because of its traditional use as a secondary facility, Prince Rupert
has the reputation of being able to handle only small volumes of grain.
But Burghardt wants to dispel those myths, pointing to early years when
30 percent of west coast grain moved through Prince Rupert.
“This is a great time to show the ease at which we unload grain and the
quickness of loading vessels. There is a wonderful opportunity for the
wheat board and non-board shippers for gaining some confidence of the
increased use of the northwest corridor and our facility.”
A need to keep grain exporters’ eyes focused on Prince Rupert kept
Burghardt at the bargaining table until 4 a.m. in the middle of
November when locked-out Vancouver grain workers put up pickets at his
terminal and halted all grain shipments. A British Columbia Court of
Appeal had overturned an earlier court decision and allowed the
locked-out Vancouver workers to resume their picket line at the
northern terminal.
Prince Rupert Grain is owned by the same grain companies that operate
the closed Vancouver terminals: Agricore United, Cargill Ltd.,
Saskatchewan Wheat Pool and James Richardson International.
The Vancouver terminals have been closed since Aug. 25, when the B.C.
Terminal Operators Association locked out 657 members of the
Grainworkers Union.
Burghardt knew the pickets couldn’t stay up long at his terminal if
Prince Rupert was to be a serious contender in prairie grain exports.
During the two-day session with the Canada Labour Relations Board, both
sides agreed to wait for the board’s ruling on a common employer by
mid-December. After three days, the pickets came down and grain started
moving again.
While the terminals at the two ports have owners in common, that’s
where the similarity ends, said Burghardt, who pulled out of the B.C.
Terminal Elevator Operators Association two years ago.
He said it didn’t make sense to belong to the same association when
Prince Rupert’s interests were different than the Vancouver port.
“We are a separately run company than any company in Vancouver,” said
Burghardt, who compared the two ports to two McDonald’s restaurants in
two towns. They may have similar owners, but the two stores have
different managers, different problems and different goals.
“The fact there is common ownership does not mean there is common
control,” he said.
Burghardt just negotiated a new collective agreement with the
Grainworkers Union at Prince Rupert. A long-term contract would help
convince the wheat board and other grain shippers that the port is
reliable and won’t be disrupted by labour disputes.
Burghardt is working with Canadian National Railway and the wheat board
to negotiate a premium freight rate to encourage grain shipment to the
facility.
In the past it has cost as much as $2.50 a tonne extra to ship into the
northern port, but with more grain now travelling north, the freight
rate is expected to drop.
“We have been working very hard with the railways over the year,
particularly CN, to see a lessening of the differential freight rates
that make it more expensive for grain to come here,” Burghardt said.
“We think we have a good supporter now in CN trying to make that
happen. We’ve narrowed the gap on the freight rate structure.”
He said he doubts competition from another railway operating on the CN
line can improve service to farmers or the facility. Prince Rupert can
become more competitive by moving more product, including canola.
He added that with an injection of money for a container facility,
crops such as peas or lentils could also be moved.
The terminal is working with the Alberta government to negotiate a
payback plan for the facility. Through its Heritage Savings Trust Fund,
the Alberta government provided 80 percent of the financing for the
facility.
Burghardt argues that instead of shunting trains through congested
Vancouver streets, trains should be routed to the isolated northern
area where congestion is not a concern.
“There are better land uses in the port of Vancouver other than moving
bulk commodities like grain and coal,” he said.
“The more appropriate thing to do is find ways to utilize this capacity
that exists in the northwest corridor and Prince Rupert.”
