This article appeared in the Fall 2014 issue of Pulse Crop News.

Allison Ammeter, APG Vice-Chair

Last winter, we all saw our grain exports grind to a halt, and it became apparent that it was due predominantly to rail transportation logistics, not a “cold winter.” Reports quickly surfaced of countries to which we export that didn’t feel that they could depend on our supply. This was in addition to reports of commodities such as pulses and oats that were not moving at all, and areas of the Prairies that were not getting grain railcars.

In an effort to better understand Canada’s rail transportation and logistics system, Alberta Barley organized a trip in August to visit the port terminals in Vancouver and Prince Rupert, B.C., as well as facilities south of the border, including port terminals and grain handling facilities in Oregon and Washington State. They invited representatives from Alberta Wheat, Alberta Pulse, Saskatchewan Barley, and the Canadian Grain Commission to participate. Along with APG Chair Richard Krikke, I gratefully accepted the opportunity to get first-hand knowledge of the way our grain moves to export markets.

We began the trip in Portland, Oregon and moved north by bus, plane, ferry, and shuttles to Prince Rupert. We talked to port authorities, terminal managers, grain commission employees, and each other a great deal. We asked numerous questions; climbed, clambered, and investigated everywhere we were allowed; and spent many hours discussing the knowledge we were gaining. By the time Day Five came, we all felt like we had as many questions as answers, and that our responsibility now was to disseminate the knowledge we had gained as widely as possible. This short report is my attempt to begin to do that.

I was quickly envious of our southern neighbours for having two methods of getting grain to port, as opposed to our one. In addition to the trains that we rely on, the U.S. has an extensive system of barges – small ones on the Mississippi and ones that are 10 times larger on the Snake and Columbia rivers. In Oregon and Washington, we saw the latter being unloaded with grain from as far away as the Dakotas, then loaded at port onto grain freighters to be sent across the Pacific.

It was quite amazing to watch a port terminal unload grain cars with a bottom dump, barges with a sump / grain leg / cross auger system, and load ocean freighters with long belts and downspouts – all at the same time. Many were also cleaning the grain and pelletizing the screenings, loading those onto trucks or freighters for other markets. The port terminal managers told us that the barge system is far cheaper and more dependable than the trains, though using both allows them to manage a steady shipping supply.

One of the initial frustrations I experienced was seeing Canadian Pacific (CP) grain cars and engines in each U.S. port we visited. In each case, they had loaded corn in Minnesota or N. Dakota, come up on CP lines to Canada, across to the Greater Vancouver area, and down to the Oregon or Washington port for shipping. This would not have bothered me in a normal year, as I’m all for healthy competition (in Pacific NW, for Union Pacific and Burlington Northern), but this year we’ve been repeatedly told that none of our U.S. bound grain (such as pulses and oats) are being shipped, because CP and Canadian National (CN) are focussing on getting grain to the coast.

When we asked U.S. terminal managers for their opinion, we were told repeatedly that the trains were not dependable in timing and scheduling, had no reciprocal penalties, and were more concerned with their own requirements than those of customers. In addition, they each felt that the energy industry’s demands for railcars and engine power had reduced the supply the grain industry was getting at port.

While in the U.S., we toured a large container port (containers came by barge, train, and truck; left by freighter), an older grain terminal, and a new state of the art grain terminal. The biggest difference we noticed between these was in the number of employees versus throughput – the newest terminal put through far more grain with a quarter of the employees, which translates into lower operating costs.

When we crossed into Canada to tour the Canadian terminals, another similarity was apparent to me. In each terminal we visited, there was a great deal of pride in their ability to ship all of the grain that came in. Without exception, each terminal said that they had room for more capacity – bring it on. The railways brought cars in steady, and the ports never fell behind in shipping freighters out, often putting on extra staff to ensure the railcars were unloaded and ready to be returned to the Prairies. Some of our Vancouver facilities are old and rather worn, but between them and Prince Rupert, 70 per cent of Canada’s exports are shipped.

Prince Rupert is a jewel of a port facility at only 30 years old with a large capacity for unloading railcars and loading freighters. Due to ocean currents, it is also 30 hours closer to the Asian markets. It is serviced exclusively by CN, and can handle about 1,700 railcars per week at present staff levels. There is also a large container port beside the grain port, which loads containers for overseas, and unloads them from the same. A container train leaving Prince Rupert can be in Chicago in 172 hours!

Our conversations always returned to the lack of customer service that the grain industry seems to get from the railways. It appeared the ports were bending over backwards to improve their throughput and serve their customers. Peter Drucker (the management guru) said that the only valid purpose of a company is to create a customer. Over and over we asked ourselves, how do we come back to this? Without exception, everyone we interviewed felt that the Fair Rail for Grain Farmers Act was a good thing, and had made a huge difference in the grain backlog on the Prairies, and as a result on the grain basis. All agreed that we need to see reciprocal penalties in the regulations, though how they would work was up for debate. All agreed that the railways need to fairly service all corridors and all parts of the Prairies, though “fairly” is also difficult to define.

In summary, the port tour was extremely worthwhile, and something I would recommend for any farmer who gets an opportunity. This vast nation we live in moves an amazing amount of exports out of our relatively few ocean ports, and quite efficiently. When we get the train system logistics working as they should, we will be positioned to reliably market our crops throughout the world.

I would like to thank Alberta Barley for inviting Richard Krikke and I to join the tour, and I recommend that you read Erin Gowriluk’s excellent blog on our experiences at http://www.albertabarley.com/porttour14-blog-day-oneportland/.