Scarce containers, busy ports, and complicated railways — a LIVE! Q&A with Greg Northey

There’s a serious shortage of containers in Canada to move grain, pulses, and oilseeds out of the country, and Western Canada is suddenly knee-deep in winter weather. Should farmers be worried about moving grain this winter? To get some answers on this, we’re joined by Greg Northey, vice president of corporate affairs for Pulse Canada, specializing in Canada’s grain logistics system.

RealAg hosts a LIVE! Q&A on a timely topic each weekday on social media at 1 pm M/3 pm E! 

  • Pulse Canada covers transportation, market access and trade and crop protection products
  • Ag Transport Coalition: Pulse Canada, Western Grain Elevators, cereal commissions, and canola growers, together formed the group in 2013-14 to monitor and track performance of the rail system.
  • What happens when some of these don’t work or get backlogged?
  • Let’s get going with containers!
  • The ports were downplaying any concern for container traffic. But! There is definitely a shortage of containers right now.
  • For grain/pulses: there is a seasonal shortage expected, but this is above and beyond that
  • Empty containers are in high demand in China ahead of Christmas, but this year the supply is much tighter
  • What’s the impact on farmers? 50 per cent of lentils are containerized. It’s a significant impact for pulses, for sure. 30 per cent of peas. And the vast majority of say, lentils to India, are containerized.
  • What about just making more? Canada has steel. There’s a waiting list right now. Many are leased. Sort of like hopper cars. The wait for new ones could be over a year.
  • 750, 000 to 1 million tonnes of containerized grain (pulses, barley, soybeans) out of Montreal, about 3 million through Vancouver, about another 1 million through Prince Rupert.
  • Container ships work on routes, just like bus loops
  • WHY are we so short? It’s partially because of a lag in demand due to COVID, and now there’s more money to be made moving empty containers to Asia to be filled, than moving grain out of Canada
  • Railway time: OK, we can move a lot of grain. Grain companies have invested heavily in elevators and terminals to keep grain moving. A billion dollars made on grain per year — that’s their job, so… what did we miss out on? Demand was very high, and there was demand that wasn’t met. Elevators asked for more.
  • Order fulfillment — how many weekly orders get filled? About 70 per cent is met, right now. Rationed orders?
  • Phantom orders gets talked about.
  • Winter is always our toughest go for the railways, but we know that every year
  • Maximum revenue entitlement (MRE) was brought in about 20 years ago
  • Port performance? Lots of new infrastructure, i.e., G3’s loop track, terminal improvements. Getting IN to Vancouver is a big issue, for sure. It’s so congested. It’s going to be a long-term battle
  • Will max train speeds based on temp have a major impact? Yes. Trains are always shortened in the cold weather.
  • Will we ever see rail costs on the scale ticket at the elevator? Could be value in it, for sure.
  • Why would shippers/ports downplay the tight container supply?
  • Would running rights impact service? What about a new rail line entirely? Competition is good, but is it really competition if it all uses the same track?
  • Legislation and regulations exist because we don’t necessarily have a competitive industry (year round).

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