The Challenges Facing the Port of Churchill — A Shipper’s Perspective

There are plenty of questions, but not many answers when it comes to the future of the Port of Churchill.

We know its owner, OmniTrax Canada, gave port employees layoff notices on Monday afternoon, with the 2016 shipping season just weeks away. We know OmniTrax is trying to sell the port and received a letter of intent to purchase it from a group of First Nations last December. We also know there was some grain booked to be moved through the port this year.

OmniTrax Canada president Merv Tweed has not been available to explain what the company is planning. A company spokesperson in Denver, on Wednesday morning, said they might release more information this week, but he wasn’t sure.

So is OmniTrax planning to close the port? Are the layoffs a play in their effort to sell it or acquire new government support? Are they trying to force the government’s hand in recognizing the public good the port and rail line provide? There have long been questions about the viability of the port, so why close it now? And how long can it be closed before it’s not worth reopening?

Grain movement through the port has traditionally exceeded 400,000 tonnes, even surpassing 600,000 tonnes. The 2015 shipping season was nowhere close to that level, with exports dropping to just under 188,000 tonnes. That brings up another question: with declining shipments, will farmers notice if Churchill is closed?

Churchill is closer than Vancouver or the St. Lawrence for a portion of the prairies. There’s also been talk about climate change favouring the port in the long term, but the port has some challenges it needs to overcome: the economics of a short ice-free shipping season, the risk and maintenance issues with having a rail line built on permafrost, small volume capacity on the rail line and through the port, the need for surge capacity, and insurance costs for bringing boats into Hudson Bay.

In the podcast above, we get a shipper’s perspective on the Port of Churchill.

Richardson International did not have any grain booked for Churchill this year, but the Winnipeg-based grain company used the port in 2014 and 2015, says spokesperson Tracey Shelton (skip to about 3:15 to hear her comments after my rambling).

“There are challenges with Churchill, certainly. It handles small volumes of grain and it has a very short shipping season, so it’s prohibitive in terms of planning to send large volumes of grain through it,” she explains.

“As a general comment, I would say the declining volumes going through Churchill suggest it hasn’t made economic sense to be shipping through the port as of late.”

She notes the expansion of Richardson’s port in Vancouver means they can also move more grain than ever before off the West Coast, reducing their need for Churchill’s capacity.

Related: Feds Asked to Step In to Keep Port of Churchill Running

 

Kelvin Heppner

Kelvin Heppner is a field editor and radio host for RealAgriculture and RealAg Radio. He's been reporting on agriculture on the prairies and across Canada since 2008(ish). He farms with his family near Altona, Manitoba, and is on Twitter at @realag_kelvin. @realag_kelvin

Trending

Wheat prices jump into August — This week in the grain markets

This week, winter wheat prices touched a three-year high, but it didn’t last. Chicago SRW wheat prices for September 2018 gained 5 per cent or about 26 cents US/bushel to close at $5.56. While the December 2018 contract was up 5.4 percent — or nearly 30 cents — to finish a tad under $5.80. In…Read more »

Related

Leave a Reply

 

This site uses Akismet to reduce spam. Learn how your comment data is processed.