Eastern ice latest obstacle to clearing Canada grain backlog
Thick ice on Eastern Canada waterways will hamper efforts to clear a massive crop backlog, with Port of Thunder Bay, Ontario, likely to open at least a week later than usual this spring, its chief executive said on Thursday.
Ice in the port's harbor on Lake Superior is about four feet (1.2 meters) thick, one foot thicker than usual, and it also covers key stretches of shipping routes to the Atlantic Ocean, Port of Thunder Bay CEO Tim Heney said in an interview.
Heney said he was optimistic that the port will open during the first week of April after a brutally cold Canadian winter, about a week behind the usual March 25 opening.
That's "quite late for us," Heney said from his office in Thunder Bay, a city in northwestern Ontario of more than 100,000 people. "It's going to be a challenge."
The port had its latest opening ever, April 12, in 1994 and 1982.
Thunder Bay, where companies like Richardson International Limited, Viterra, Cargill Ltd and Parrish & Heimbecker store grain for export, connects western crops with the Atlantic Ocean via the Great Lakes and St. Lawrence Seaway, destined for Europe, north Africa and Latin America.
Frigid weather and snow have slowed Canadian National Railway Co and Canadian Pacific Railway Ltd, trains leaving country elevators and farm bins stuffed with grain after a record-large wheat and canola harvest.
The Canadian government ordered the railways March 7 to more than double weekly grain shipments to 1 million tonnes or face penalties of up to C$100,000 ($89,000) per day.
Opening the Great Lakes to grain shipping in the coming weeks will be a much-needed outlet for Canadian grain, but even so, CN Chief Executive Claude Mongeau sees the grain backlog stretching into 2015.
"I think you're going to see a lot more attention on Thunder Bay than normal in terms of its capacity and role in solving the problem," Heney said. "It will be busier this spring certainly than last year."
But first ice-breaking equipment and warmer temperatures have to go to work.
Lake Superior froze over completely this winter, something that doesn't usually happen, and there is also thick ice on the other Great Lakes, Heney said.
The Welland Canal, a ship canal that connects Lake Ontario and Lake Erie, is scheduled to open on March 28, while the opening of the Seaway between Lake Ontario and Montreal was pushed back to March 31 due to heavy ice, according to the St. Lawrence Seaway Management Corporation.
After those openings, ships that spent the winter in Montreal can begin the trip to Thunder Bay to load grain, Heney said.
The Canadian Shipowners Association, which represents companies like Algoma Central Corp and Canada Steamship Lines, said this week that it was "extremely concerned" that Canadian Coast Guard ice-breakers would not be able to create and maintain the routes needed to move cargo to Canadian and American industries.
It may not help to ease the grain backlog that Thunder Bay terminals are mostly empty, after the railways focused their winter grain shipments on the British Columbia coast, a gateway to Asian buyers.
Thunder Bay has 1.2 million tonnes of storage capacity for grain, the most in North America, tracing back to busier times shipping to the former Soviet Union.
But only 230,000 tonnes of grain is currently in storage, well below average, and just one-fifth of capacity.
"There's lots of room," Heney said.
Port of Thunder Bay is also a conduit for coal, potash, forest products and manufactured goods.