LETHBRIDGE – Special crops shippers can accept that it takes longer to get their product to port position. What they can’t abide is the substantial variation in delivery time.
That is one of the key findings of a soon-to-be-released study on special crops grain movement conducted by Quorum Corp., Canada’s government-appointed grain transportation monitor.
It takes an average of 9.9 days to haul a hopper car of canola from the Prairies to the Port of Vancouver. The delivery time for board grains averages 11.4 days, while special crops take 16.5 days to get to port position.
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Shippers of special crops realize it takes longer to deliver their commodities to the West Coast than other grains because they move in smaller lots.
But they don’t understand why there is so much more variability with their shipments, said Mark Hemmes, president of Quorum Corp. and author of the Container Measures Study.
His study, which was unveiled at the Canadian Special Crops Association’s 2006 annual meeting, shows the standard deviation on delivery times is 6.4 and 6.5 days respectively for canola and board grains. For special crops that deviation blossoms to plus or minus 8.3 days.
It doesn’t sound like much but an extra two days of uncertainty can create a world of grief for exporters, said Greg Simpson, president of Simpson Seeds Ltd., a Moose Jaw special crops processor.
“When we make a booking we want that to be a done deal. We don’t want it to be a maybe.”
A train that arrives a few days later than expected can lead to missed shipments and a renegotiation of delivery times with the end customer. Markets can drop $20 US per tonne between the first and the second shipping dates.
“Who’s going to pay for that? There’s no margin in this business to pay for the cost of them not performing,” said Simpson.
Wayne Atamanchuk, assistant vice-president of marketing bulk products at Canadian National Railway, said the railways are not the sole source of the delays.
“A lot of the variation or the difference in that car cycle time is occurring at the port position.”
He said the dwell time for peas at port position in Vancouver, which is the time between when a hopper car arrives and when it is unloaded, varies greatly depending on delivery method.
Majority by hopper
Ninety-eight percent of the special crops handled by CN Rail move by hopper cars. If those cars are unloaded directly at a major terminal, the dwell time averages 1.25 days.
The delay bumps up to four days when the commodity goes through a direct hit facility, where the hopper cars are loaded directly onto a ship.
But most special crops move by container, which involves transferring the commodity from hopper car to metal cubes through a stuffing facility, which involves an average dwell time of five days.
Atamanchuk said it takes so much longer through the last two methods partly because of inadequate investment in unloading and storage capacity and the lack of seven-day-a-week operations at stuffing and direct-hit facilities.
But the railways are not without blame, said Hemmes. They are used to hauling grain in 50-100 car lots and have been slow to adapt to the needs of the special crops industry.
“All of the sudden you’re presented with 10 cars. It’s easy for 10 cars to get lost in the system,” said Hemmes.
That is why the railways are pushing for consolidation of shipping origins on the Prairies.
Judy Harrower, assistant vice-president of agribusiness with Canadian Pacific Railway, said there are 120 shipping points for canola and board grains, which comprise 92 percent of the company’s grain-related business. There are another 100 shipping points for special crops, which make up the remaining eight percent of the grain volume.
“We will continue to champion the movement of larger blocks of shipments,” said Harrower.
“Frankly this will result in efficiencies for the industry. It will result in faster transit times and an improvement in the overall cycle.”
