By IAN ROSS
The explosion of worldwide container traffic and the exacting manufacturing demands for just-in-time efficiencies has the Thunder Bay Port Authority investigating new ways to attract shippers and carriers to the historic grain handling facility.
Thunder Bay is gradually building a case to evolve into a more diversified marine, rail and truck transportation hub.
To CEO Tim Heney, it’s all about exploiting their central Canadian location and demonstrating to freight movers and customers the advantages of shipping through northwestern Ontario.
Like many Canadian cities studying multi-modal concepts, the port authority sees opportunity to feed the voracious supply needs of the Alberta oil and gas industry.
“With the downsizing of the forestry industry, it’s going to become more paramount to diversify,” says Heney. “We view our facility as a way of bringing business to the community from outside for fabrication activities in the Tar Sands.”
Port officials are trying to schedule a lineup of incoming “project cargoes” destined for Alberta. Wind turbines headed to western Canada arrive this spring, but larger general cargoes are expected to surge over the next two years.
Heney says it’s mostly European equipment and modular systems of plant construction, where the building components are made off-shore and shipped via Thunder Bay for assembly in the West.
“I’ve been talking to Oil Sands engineers to highlight the capabilities of the (St. Lawrence) Seaway, studying what biggest pieces can be transported down the Trans-Canada (Highway) to Alberta to determine the size of the modules.”
The City of Thunder Bay is working along similar lines promoting fabrication opportunities for local manufacturers and contractors.
Earlier this year, the authority added to its property assets by purchasing an adjacent 10-acre Canadian Pacific Railway intermodal yard as a compliment to their 200-car rail yard. The authority already operates its 537,000-square foot dockside Keefer Terminal used to store recycled materials, pulp and newsprint.
Heney says container flows have dried up with forest industry mill closures, but more Prairie grain is being shipped by container. It’s prompted Western Canadian cities, such as Regina, to study intermodal concepts. Thunder Bay, he says, already has the logistics infrastructure in place to support it.
“We’ve got the biggest grain storage capacity in North America,” says Heney, with nine elevators capable of storing 1.4 million tonnes, as well as “fairly reasonable” freight rates to bring grain to the port by rail hopper car. As well, Thunder Bay doesn’t have the harbour maintenance taxes imposed by U.S. Great Lakes ports.
One idea Heney is floating is for Thunder Bay to handle incoming container traffic destined for the Minneapolis, Minn. market. Those containers usually arrive through congested ports like Long Beach, Calif.
He wants to re-route containers either through Halifax or Vancouver, rail it to Thunder Bay for reloading into transport trucks for the six-hour drive down Highway 61 to Minneapolis. “It’s a quiet border station only 38 miles away. There’s no wait time.”
For the return trip, grain or forest products could be reloaded onto the containers for the back-haul to Thunder Bay. Heney says due to higher U.S. rail rates, much American grain already comes across the border in Canada and then re-routes back into the States.
“I’ve been talking to some freight people in Minneapolis about it. So far nobody’s told me I’m crazy.”
For Thunder Bay’s traditional grain-handling business, Heney forecasts a solid outlook for 2007.
The port boasted a good haul in 2006 with cargo and vessel traffic up three per cent over the previous year. Their year-end statistics for 2006 showed overall tonnage was more than 8.4 million tonnes of grain, coal and potash. Grain totals were bumped up to 6.4 million tonnes over 5.8 million during 2005.
Those grain levels haven’t been seen in six years.
Things were made easier by ice-free conditions on the Great Lakes during the last shipping season which kept the St. Lawrence Seaway open to navigation for a record 282 days. This year, March 20 marked the Seaway’s earliest opening date. Thunder Bay opened to shipping March 27 with the arrival of three vessels to load grain.
Heney says once last year’s crop is emptied from their elevators, grain movement should be strong again
if spring plantings are any indication of what’s to come. Because of a decline in Australian grain exports due to drought, grain prices are healthy.
“With a good crop and a strong price, you’re going to see it move.”
On average, Thunder Bay handles about 8.2 million tonnes of bulk cargo. Increased competition over the years from other competitor ports on the Pacific Coast and at Churchill, Man. cut into Thunder Bay’s grain traffic through the 1980s and 1990s.
With the future of the Canadian Wheat Board (CWB) up in the air, Heney says it’s difficult to determine what impact a deregulated market will have on Thunder Bay.
But the Conservative government’s highly controversial plan to dismantle the board is being watched with great interest locally.
Some voices say an open market it will spell the end of the largely government-subsidized Hudson Bay port of Churchill since large grain handling companies would want to ship wheat through their own elevators in Vancouver and Thunder Bay.
Says Heney. “I don’t think anybody knows the true answer. We’ll have to wait and see.”
About 65 per cent of the board grain moved through Thunder Bay is wheat and barley. But cargoes are steadily growing with the non-board grain, mostly canola and oats.
“The wheat board keeps telling everybody without them, Churchill dies. If it’s such an efficient route why would it die without the wheat board? “We view our route as viable with or without the wheat board. It may or may not hurt it, nobody really knows.”
