January 31, 2008

 

Harsh winter impacting grain transport in Canada 

 

 

Extremely cold temperatures and high winds have caused a slowdown in the movement of rail cars to the export terminals in Canada's British Columbia, prompting concern from Canada's grain and oilseed shippers.

 

Temperatures across the Canadian provinces of Alberta, Saskatchewan and Manitoba have been in the minus 30- to minus 40-degree Celsius range and when the wind has been factored in, temperatures have been in the minus 40- to minus 50-degree Celsius range.

"The extreme cold does affect the railway companies and their ability to move grain and oilseeds to export locations," said Mark Dyck, manager of rail logistics for the Canadian Wheat Board.

 

Using the Port of Prince Rupert, British Columbia, as an example, he said that during a good week, a steady stream of rail cars filled with grain are unloaded at the facility.

 

"Last week, there were just over 1,000 rail cars unloaded at the export facility," Dyck said. "This week that number was expected to decline to around 800 to 850 rail cars due to the slowdown in movement because of the cold."

 

The cold snap occurred at a bad time, he said, particularly as the CWB sales programme was running current with vessel arrivals.

 

The loading of vessels at the grain and oilseed export facilities at Prince Rupert and Vancouver in British Columbia were both expected to slow because of the reduced rail car movement, Dyck said.

 

The drop in unloads impacts the ability of shippers to meet requirements at the West Coast, he said.

 

However, he said that whenever CWB enters into an agreement with a customer, it closely examines historic rail car movement for the time period.

 

"For example, when booking movement for January or February, we look at the historic rail car movement for that period, taking into consideration weather problems," Dyck said. "Then we sell our volume based on those numbers and not just sell whatever we want."

 

He said that with the cold impacting movement, the CWB will be in contact with its customers.

 

"In some situations we will ask our buyers to try to delay the arrival of the vessels as long as they can in an effort to allow the system to catch up," Dyck said.

 

Another option was to have the customer spread out the purchase over a greater period of time, if possible, he said.

 

In a worst-case scenario, if a ship has been waiting for an extended period of time to load, demurrage charges can occur, he said.

 

Canadian National Railway temporarily reduced freight service in most areas of Western Canada due to the extreme cold and wind conditions, it said late Tuesday.

 

CN expects the modified freight operations to continue for up to 36 hours. Customers should expect delayed transit times for their shipments.

 

Mike Lovecchio, a spokesman for Canadian Pacific Railway, said the company's rail line system was operating as fluidly and normally as possible given the temperatures.

 

"However, the cold snap in Western Canada will impact all sectors of our rail line," Lovecchio said. "But we have not issued any type of warning as CN rail has at this time."