What began as a phenomenal year for prairie grain movement became a “cooked stew” of challenges and logistical problems in January, says the federally appointed monitor for prairie grain handling and transportation.
After an above-average start to the 2012-13 crop year, grain movement slowed before Christmas and worsened throughout January, February and March, mostly due to harsh weather, said officials from Quorum Corp.
Transportation delays in early 2013 shouldn’t be viewed as proof that Western Canada’s grain transportation system is broken, they added.
A combination of factors combined to lead farmers, grain handlers and railway companies into the soup.
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“Around about (mid-January), everything went to hell for both railways,” said Quorum president Mark Hemmes.
“That period, especially heading into February and March, was unbelievable.”
According to Hemmes, cold weather, recurring blizzards, above average snowfall, heavy drifting and other factors slowed country deliveries, hindered rail car allocation efforts, extended transit times and created a backlog of ships at port.
Just as problems in one part of the system began to diminish, challenges emerged elsewhere.
Across the West, rural road bans limited grain movement on farms beginning in late March.
Many farmers have now turned their attention to seeding and are focused on preparing for the busy spring season, rather than moving grain.
Meanwhile, grain companies are anxious to fill overseas sales orders and take advantage of strong world prices, a situation that has created an extremely high demand for rail service.
“Combine all of these factors and you’ve got kind of a cooked stew,” said Hemmes.
“You’ve got weather with the railways, you’ve got delivery issues in the country and you’ve got higher-than-normal demand in the global marketplace for high quality wheat, which we have. Look at all those things together and that’s why we’re in the soup.”
Conditions are improving.
“It could be better and it has been better but I don’t think we are falling apart at the seams right now,” he said.
“I think we had a really tough two months but hopefully we’re coming out of it. Now all we have to do is get people delivering again.”
Last week, Quorum released its annual report on the performance of the grain handling and transportation system for the crop year ending July 31, 2012.
Hemmes called 2011-12 a great year for grain movement, with improvements in most parts of the system.
Crop volumes were high, weather in late 2011 and early 2012 was unusually mild, railways were working well and ocean freight was relatively inexpensive.
Quorum said record or near-record volumes of grain were delivered to country elevators, moved by rail and loaded onto ships.
The total amount of grain moved by rail to western Canadian ports increased by 4.5 percent, to 29.3 million tonnes, up from 28 million tonnes a year earlier.
The port of Vancouver remained the top export destination, handling 17.6 million tonnes, although volume at the port was down 0.2 percent from the previous year.
Prince Rupert posted a 6.4 percent increase, with volumes climbing to 4.7 million tonnes.
Thunder Bay saw a significant gain, with shipments increasing by 20.9 percent to 6.4 million tonnes, the Quorum report said.
Rail shipments to Churchill decreased by 16.9 percent to 528,000 tonnes.
Hemmes said all players in the industry, including farmers, grain companies, railways and port operators, deserve credit for improving system performance.
Over the past 12 years, the average time that grain spends in the system has dropped to 47 days, down from 68 days in 1999-2000.
“These are processes that people and companies have been working on for years and years,” Hemmes said.
“Finally, some of their work has come to fruition.”
Ed Greenberg, a spokesperson with Canadian Pacific Railway, said his company has taken steps to provide more predictable service to grain customers and optimize capacity in the logistics chain.
“CP has worked in conjunction with grain customers to facilitate a strong network of efficient high throughput grain elevators located on the Canadian Prairies and U.S. Great Plains, adding significantly to the efficiency of the grain handling and transportation system.”
