The volume of grain moving through the Great Lakes and St. Lawrence Seaway system in 2007 should be about the same as last year.
However, the same can’t be said for the costs of using the eastern waterway.
Tolls, fees and other charges to move a grain vessel from Thunder Bay, Ont., to export position in the lower St. Lawrence will be about two percent higher.
Cargo tolls for a vessel travelling through the Welland Canal and the Montreal-Lake Ontario section of the seaway will total $1.28 a tonne, up from $1.25. For a laker carrying 25,000 tonnes of grain, that works out to $32,000, up from $31,250 last year.
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Shippers must also pay a lockage fee of $529.79 for each of the eight locks that make up the Welland Canal, which means an increase to $4,238 from $4,155 last year.
A vessel charge of 25 cents a tonne, or $6,250 for a typical laker, is unchanged from last year.
Passage through the four locks of the St. Mary’s Falls Canal at Sault Ste. Marie is toll free.
When all these fees are added up, a vessel travelling the entire system from Thunder Bay to tidewater in the St. Lawrence will pay $42,488, up from $41,655 last year.
While that isn’t a big increase, those additional costs will ultimately be passed on to farmers.
Others in the industry are also concerned about the small but steady increase in the cost of moving grain through the seaway.
“We always view toll increases as a bit of a problem,” said Tim Heney, chief executive officer of the Thunder Bay Port Authority.
“We realize that the costs of using the system can be a big inhibitor to use of the seaway.”
Those with an interest in promoting increased use of the eastern waterway system must look for ways to keep costs down so as not to lose competitive ground to the railways.
“We take this very seriously,” said Heney, noting that the port authority froze its harbour dues in 1989 and reduced them by 10 percent in 2001 to seven cents a tonne.
This year’s cost increase isn’t expected to affect volumes moving through the seaway.
The first grain vessel of the season, the Algonorth, left Thunder Bay March 27 carrying 25,000 tonnes of durum to transfer elevators on the lower St. Lawrence.
About 11 grain vessels and four coal vessels were expected to be in port picking up cargo by the end of March.
Dennis Portman, director of logistics for the Canadian Wheat Board, said the board expects seven or eight vessels will clear Thunder Bay by March 31.
“That’s a pretty aggressive start,” he said. “Normally we’re several days into April before we’ve done that much.”
Portman said the board expects to ship 1.8 to two million tonnes through Thunder Bay between now and the end of the crop year July 31.
Shipments next fall are less predictable, dependent as they are on new crop production, but Portman said he expects total wheat board shipments for the 2007 navigation season will be about 4.5 million tonnes, about the same as last year.
That included 3.6 million tonnes from Thunder Bay to St. Lawrence elevators for transfer to ocean going freighters, 500,000 tonnes destined for domestic millers in Eastern Canada and about 300,000 tonnes shipped on ocean going vessels for direct export.
“We expect a similar program this year,” said Portman, who added he expects the eastern export program will run smoothly, as it usually does.
Total grain shipments out of the port in 2006 were 6.5 million tonnes, the highest since 2000. That’s well below the 10 million tonnes that were routinely handled in the late 1980s and early 1990s, but Heney is encouraged.
“It’s not like the old days, but it’s not going down any further, so that’s a good sign.”
While the railways are a little behind in their unload targets, Portman said that’s likely just a short-term blip.
“We had a fair amount of grain on hand going into the opening, and we don’t anticipate any operational delays,” said Portman, adding eastbound rail shipments don’t face the same geographical and logistical problems as shipments to Vancouver and Prince Rupert.
According to Canadian Grain Commission statistics, 841,200 tonnes of grain were stored in Thunder Bay elevators as of March 25, compared with 682,300 tonnes a year earlier, which should make for a strong start to the season.
