Grain may be backlogged at elevators on the Prairies, but it remains smooth sailing at the Port of Thunder Bay this spring.
Though still early in the Great Lakes navigation season, port authority CEO Tim Heney views no change in activity at the western Lake Superior port.
“It’s starting to roll pretty good now. We’re not seeing anything unusual.”
The port opened to navigation on March 27 with the arrival of the first grain vessel, the CSL Welland.
The backlog, that’s the subject of many national media stories, is mainly affecting the Port of Vancouver, Canada’s main West Coast grain port, explained Heney.
The major Class 1 railroads have experienced one of the worst winters in quite a while, plagued by cold temperatures and plenty of snow through the Rocky Mountains.
It’s the second time in four years that freight has been stalled in elevators on the Prairies, and many grain haulers are blaming the railways.
Some of the pain for grain growers, Heney said, might have to do with some of the after-effects of Ottawa’s decision de-monopolization the Canadian Wheat Board in 2012.
Western farmers may be hanging onto their grain longer, causing a transportation backlog downstream.
“Everyone’s a grain trader,” said Heney. “The price starts to go up, and they all want to deliver at the same time. The (transportation) system is not designed for that. The Wheat Board used to call it in and controlled the flow.”
Heney said railroads and the shipping companies want to run steady all the time and have trimmed their rolling stock and fleets to do that.
In decades past, Canada’s rail and marine network was set up to handle the spring and fall grain surge.
“Those days are gone. It’s not like that anymore,” said Heney.
The last time this happened, Ottawa tried to legislate the railways into moving grain faster, under threat of stiff penalties.
Heney remembers the late Hunter Harrison, the CEO of Canadian National Railway at that time, wanted to divert grain to Thunder Bay.
“The more you legislate to Vancouver, the more jammed up it becomes.”
For the large Panamax ships anchored in the Port of Vancouver waiting to take on cargo, Heney said once they reach seven days in demurrage (the cost calculated of leaving a ship at anchor), they must move to re-anchor further offshore.
“Once you get a backlog of ships, it takes a lot to clear that.”
Vancouver’s headaches represent a great promotional opportunity for Thunder Bay.
With 1.2 million tonnes of storage capacity, the city’s waterfront grain elevators were only half-filled with last year’s Prairie crop in early April.
Once the grain cars start rolling into Thunder Bay at a brisk pace – as many as 2,200 cars a week – Heney said at that rate it will still not draw down their stock.
“We have lots of capacity to move it this way. I don’t know if any of its going to. But there’s certainly lots of room (for it).”
With Prairie grain just started to arrive in the port, Heney said there’s no word of grain being diverted to Thunder Bay.
“Once they ramp it up, this is the fastest place to move the grain to.”
Coinciding with the start of the shipping season, Heney outlined the port authority’s development plans at its annual luncheon on April 5.
To better handle project cargoes, rail spurs on the property are being reconfigured to create more laydown space and more rail car loading spots are being added.
It’s another big year for incoming cargo such as imported German pipe and heavy pressure vessels headed for Alberta, wind turbines and electrical transformers to Manitoba, and Luxembourg steel destined for the Prairie cities.
Construction of a new 50,000-square-foot heated warehouse is also in the works. Bombardier leases another warehouse on the property.
Hopefully, opportunities will improve with federal transport minister Marc Garneau launching a review of the 20-year-old legislation governing Canada’s port authorities.
Heney said Ottawa created a one-size-fits-all-act when it created the Canada Marine Act in 1998.
For Thunder Bay, it was a step backward in being forced to switch from a harbour commission to a port authority, a move that costs them $500,000 and $600,000 a year.
As an organization that receives no federal funding, the authority generates revenue from Keefer Terminal and non-marine uses to offset port costs.
Heney said it’s been a cumbersome regulatory process to be able to acquire or sell land.
He’s in favour of the feds relaxing the rules on property sales to give them more freedom and incentive to attract business to northwestern Ontario.
“Thunder Bay is a tough place to do economic development. To attract somebody here, you’ve got to use everything you got. The port is the thing that can do that. People around the marine business think a bit more globally.”
