Published on: 4/11/2014 9:25:50 AM Print | Font Sizes:  Normal Text Large Text

Thunder Bay port preps for monster grain move



Rail traffic to Thunder Bay grain elevators in late March was light as the port prepared to handle a massive backlog of Western grain stranded on the Prairies.
Rail traffic to Thunder Bay grain elevators in late March was light as the port prepared to handle a massive backlog of Western grain stranded on the Prairies.

It could take a full year to clear up the massive backlog of Western Canadian grain and move it to market, said the CEO of the Thunder Bay Port Authority.

“They say this could take until the next harvest to clean up, it’s that big,” said Tim Heney. “It’s going to be interesting (this spring) to watch.”

With 1.2 million tonnes of local elevator capacity, Heney was confident Thunder Bay was up for the task.

This spring, grain from last year’s bumper crop in Western Canada was starting to trickle into Thunder Bay, but rail traffic was not unusually heavy in late March prior to the start of the Great Lakes shipping season.

Normally, the winter carryover in the port’s elevators from the previous year’s crop is about 500,000 tonnes, said Heney. This past winter it was nowhere close to capacity at only 230,000 tonnes.

Most of the grain that moves through Thunder Bay, and is loaded aboard Great Lakes and saltwater vessels, is destined for Europe.

Weekly grain reports showed elevator capacity in Manitoba was “exceeding something like 121 per cent, which means it’s on the ground,” said Heney.

With the spring flood season approaching, there was concern whether it could be moved in time.

It’s caused desperate Western farmers to start trucking grain to Thunder Bay.

“Farmers weren’t able to sell the grain because you have to take it to collection elevators and they were so jammed up they wouldn’t take it,” said Heney. “You can’t get any money unless you sell it. Some of that triggered some of the trucking.”

The port handles 68 per cent of Manitoba’s export grain and 35 per cent of Saskatchewan’s.

“Wheat is the biggest by far, but they had a bumper canola crop too. Everything was a bumper crop,” said Heney.

Exacerbating matters were heavy ice conditions on the upper Great Lakes, particularly on Lake Superior, which caused a late start to the shipping season even though the St. Lawrence Seaway locks opened in late March.

With 70 per cent of Lake Superior covered by thick ice in late March and early April, plans were being made to start convoying ships, escorted by coast guard icebreakers.

Inside Thunder Bay harbour, ice was at least four feet thick, a foot more than usual.

“It’s definitely heavy for sure,” said Heney.

Two U.S. Coast Guard icebreakers were working inside the harbour in early April with a Canadian heavy icebreaker scheduled to arrive within days.

Heney said the bumper crop may have caught the grain haulers and rail carriers by surprise. Last year’s weather conditions on the Prairies through the critical stages of planting, germination and harvest were perfect.

“The railways weren’t geared up for it,” said Heney. Then a tough winter severely hampered grain movement was made worse by major cutbacks at Canadian Pacific Railway (CP).

A federal government order, issued March 7, required Canadian National and CP railways to ship 500,000 tonnes of grain each week or face daily penalties of up to $100,000.

Whether Ottawa’s decision to reduce the power of the Canadian Wheat Board has been a contributing factor to the backlog is difficult to tell, said Heney.

Two years ago, the control and movement of grain was altered when the federal government eliminated the monopoly held by the Wheat Board. Grain farmers can move their crop when they see fit and when the price is right.

“The Wheat Board has a system-wide perspective of transportation that kind of balances things. It’s hard to say without them whether it would be better or worse.

“The board pulled the wheat in when they needed it and now it’s a push supply chain (with the farmers). That’s going to cause you bigger spikes. Maybe that’s another part of the problem.”

Heney said this might not be a one-year problem to clean up if there’s another strong crop coming off the Prairies this fall.

The glut of millions of tonnes of stranded grain combined with an ice-choked lake put Thunder Bay in the national spotlight and made Heney a very popular man to call.

“The wheat backlog in combination with the weather has given us more notoriety than I’ve ever seen,” said Heney, who’s been conducting interviews with industry trade publications and national newspapers.

“The sad part is this (ice) is all going to be broken up and melted in another month and nobody will talk about Thunder Bay anymore,” he said jokingly.

www.portofthunderbay.com 

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