Rail strike may further slow movement of huge West Canada crop
Canadian Pacific noticed strong rail demand from the grain sector before autumn, and increased the length of grain trains, said spokesman Ed Greenberg.
The railways are both offering a larger number of rail cars for grain than usual, said Mark Hemmes, president of Quorum Corp, which monitors rail performance in the grain sector for the Canadian government. But moving crops fluidly is also about matching the specific needs of vessels lined up, he said.
"The railways are motivated to move as much grain as they can, and they may have a tendency to grab grain from an origin that might not match what's required in that timeframe at the port. That's where we end up with congestion."
The bumper grain harvest comes amid a slump in offshore demand for potash fertilizer, but coal movements at Port Metro Vancouver are at a record high, said Doug Mills, senior account representative of trade development at Canada's largest port.
The projected record grain volumes and diverse profile of this year's wheat crop have led some vessels to anchor off Vancouver Island to wait for cargo, Mills said.
The federal regulator Canadian Grain Commission (CGC) has also fielded inquiries from exporters about using British Columbia terminals that typically store less grain than others, such as Kinder Morgan's North Vancouver terminal, said CGC chief grain inspector Randy Dennis.
Hemmes said he doubts much more of the Canadian crop than usual will move through the United States. Grain handlers rely on the same two railways to move crops south, and it is costly for Canadian farmers to truck crops to U.S. elevators unless they live close to the border, he said.
Such a big crop caught some farmers off guard. Around mid-summer, when it became clear big crops were on the way, demand spiked for on-farm grain bins and portable handling equipment.
"(There was) a mad scramble to buy it and get it installed," said Daniel Donner, senior vice-president of sales and marketing at Ag Growth International Inc.