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  • Railways ready to move grain but challenges loom in Vancouver

    Posted on: September 27th, 2017

    Alex Binkley

    Canadian National and Canadian Pacific are hard at work transporting Prairie grain to terminals using longer trains with the goal of bettering their strong performance from last year. “Through innovation, collaboration and improved communication with our supply chain partners, CN moved more grain in a single crop year than ever before,” says Doug MacDonald, CN Vice-President of Bulk. “We did this by further developing our supply chain ingenuity with our partners to meet demand, resulting in improvements in the use of equipment and better than ever efficiencies in size of trains.”

    The result was CN hauled seven per cent more tonnage in the 2016-17 crop year than the prior three-year-average and beat the one-year record set in 2014-15 by two per cent. Prairie farmers harvested a record smashing crop in 2013, which the railways struggled to transport during harsh winter conditions, leading to government-imposed minimum tonnage movements and other regulations. The Liberal government chose not to continue those provisions for this crop year, which started Aug. 1, giving CN and CP the opportunity to show how well they can respond to customer demands.

    “At CP, moving grain is embedded in our DNA and has been for more than a century,” says John Brooks, CP Senior Vice-President and Chief Marketing Officer. “While we have a long history of delivering for farmers, shippers and the North American economy, we are more focused now than ever on our relationships with our customers and on building the world-class grain supply chain that will deliver for the next century.”

    CP is emphasizing faster loading and unloading at country elevators and port terminals as part of its effort “to drive velocity in the rail portion of the complex grain supply chain,” he said. The railway will pay special attention to ensuring it has locomotives ready to haul grain hopper cars as soon as they’re loaded at the country elevators. CP was criticized during the last few years for long delays in picking up loaded grain cars.

    While the railways have taken measures to reduce the impact of cold weather on their grain operations, CN is concerned about the rail infrastructure on the North Shore of the port of Vancouver. The expansion of existing terminals and the construction of a new one by G3 Canada will push the demand for rail service beyond the capacity of the existing rail network, MacDonald said.

    The tracks leading to Vancouver’s North Shore, home to a number of key grain export facilities, is quickly approaching capacity, which will create a bottleneck that cannot be solved without new infrastructure, CN said. With growing ship traffic, the available time trains can travel over the Second Narrows Bridge is limited. “Adding additional capacity to strategically stage trains before the bridge without blocking roadways would increase efficiency. Also, the tunnel on that corridor requires better ventilation so the wait time in between trains travelling through the tunnel can be decreased.”

    The majority of the traffic moving to the North Shore is done so at federally-regulated rates and provisions, which “are simply insufficient to cover the significant investments that are required,” CN said. It hopes the federal National Trade Corridor Fund will provide funding for projects to increase the rail capacity. “Vancouver is a vital trade-oriented Canadian gateway and should be a top investment priority for the government’s new national transportation corridor infrastructure fund,” MacDonald said.

    No capacity issues were cited by either railway in Prince Rupert or Thunder Bay.

    The big question for 2017-18 will be the size of the Prairie crop. The northern parts of the regions enjoyed good growing conditions and early harvests indicated above average yields. However the south-central areas were hit with blistering drought and the grain yields from there are uncertain. The size of the crop and the level of international demand for Canadian grain determine the pace at which CN and CP’s new transportation offerings will be tested.

    CN has introduced 200-car grain trains to improve efficiency and turn equipment back to the Prairies faster, and expanded use of distributed power and air repeater cars to extend train length and improve train braking during extreme weather winter months. It noted that grain companies have built nine new country elevators and seven more will be completed by early 2019.

    Brooks said, “Grain is CP’s largest line of business. For the 2016-17 crop-year, CP’s grain movements were consistent with the 2015-16 crop-year and 2 per cent above our five-year average. CP is driving towards a supply chain model capable of loading, transporting, and unloading 8,500-foot long, power-on, unit trains with a minimum of 134 hopper cars of export grain in Canada, carrying 20 per cent more grain than 112 car grain trains. “Through infrastructure investment and collaboration with grain companies and port operators, this enhanced train model allows railways, elevators, and ports to increase throughput and better utilize resources,” he said. “Grain elevator and port terminal infrastructure is being built and expanded to load and unload 8,500-foot trains clear of the mainline track.

    “Our dedicated sales and marketing team is working with our customers to understand their needs and develop industry-leading products and total transportation solutions that maximize supply chain performance,” Brooks said. “We are entering a phase of sustainable growth where we are putting more dots on the map and adding increased optionality for our customers – that’s exciting for us, for farmers, shippers and producers.”

    The importance of grain shipments to the Vancouver Fraser Port Authority was shown in its 2017 mid-year statistics. Overall all cargo was up four per cent to

    69 million tonnes over the same time last year with mid-year records in bulk grain and containers, said Robin Silvester, President and CEO. Strong overseas demand for Canadian grain products resulted in a steep increase in wheat, canola and specialty crop exports, which include pulses and lentils up 55 per cent, all of which would have been from the 2016 harvested crop. This is the Port of Vancouver’s sixth consecutive year of record mid-year volumes of bulk grain at 12.5 MMT in 2017, a 12.9 per cent increase over mid last year.

    “The global demand for Canadian agricultural products continues to be strong in 2017 and is reflected in the record grain volumes through the Port of Vancouver over the first half of the year,” he said. “The long-term outlook for Canadian trade is one of growth and the Port of Vancouver is working hard to ensure we will be ready to handle increased volumes through Canada’s West Coast. We’d like to thank all of our terminal partners for their investments in new technology and infrastructure that are helping to increase capacity, and provide a more efficient and reliable goods movement supply chain.”