At the midway point in the navigation season, Port of Thunder Bay is reporting strong tonnage figures in all cargo commodities.
Total cargo tonnage for the period March through July 31 is up 7 per cent over 2011 levels at the same time. Potash leads the way with a 53 per cent increase in tonnage year-over-year. Other year-over-year tonnage increases include liquid-bulk products (30 per cent), general cargo (27 per cent), coal (20 per cent), grain (5 per cent) and other dry-bulk products (48 per cent) which consist of stone and road salt.
In most commodities, the robust shipments have spilled over from the 2011 navigation season. When that season closed on January 15, 2012, a total of 7.6 million tonnes of cargo had passed through the port during the year, up 11 per cent over 2010. Grain, the Port’s strongest commodity, accounted for 6.3 million tonnes in 2011. A 20-per-cent increase in grain shipments over 2010 was due largely to a surge in canola shipments.
While canola shipments continue to be strong in 2012, wheat shipments have seen the greatest increases among all grains at the Port so far this year. As of July 31, wheat tonnages were up 14 per cent over 2011. A new era in wheat shipping began on August 1 as the Canadian Wheat Board lost its monopoly marketing all Western Canadian wheat and barley.
Under the monopoly structure, the Wheat Board bought and marketed all Western Canadian wheat and barley. On average some 4 million tonnes of wheat and barley were shipped through the port of Thunder Bay annually, mostly to transfer elevators in Quebec for export. Under the new structure, farmers have the freedom to choose to whom they sell their wheat and barley, opening the door for major grain companies to compete for the 31 million tonnes of wheat and barley grown in Western Canada every year.
Since most of Canada’s major grain companies have facilities in Thunder Bay and already use the Seaway as a part of their supply chains, Thunder Bay Port Authority CEO Tim Heney sees the change as a positive one for the Port. “There is renewed interest in Thunder Bay as an export point for Prairie grain,” he says, “For years the port’s grain shipping capacity has been underutilised, and now we’re seeing that the capacity that isn’t being used for shipping grain is being sought after for grain storage.”
As Canada was the last country to have a monopoly in place for the marketing of wheat and barley, officials in Thunder Bay are looking at trade flows and storage patterns in other countries to predict how the end of the Wheat Board monopoly will affect the Port. Indications are that grain storage capacity plays a much larger role in world markets than was the case in Canada. With over 1.2 million tonnes of grain storage capacity, Port of Thunder Bay has the largest grain storage capacity in North America.
The largest export port on the Seaway, Thunder Bay also has the fastest ship turnaround time of any Western Canadian port, with virtually no traffic congestion to speak of. “Every day that a vessel has to sit in port waiting for a slip to load in costs the shipper and the end customer money,” adds Heney, “Thunder Bay’s loading efficiencies minimize demurrage costs that may be unavoidable at other, more congested ports.” In 2010-2011, the average amount of time spent by grain vessels at Western Canadian ports increased by nearly 60 per cent to 9.9 days. Bucking this trend, the average time in port for grain vessels in Thunder Bay remained at the port’s long-term average of just 2 days.
The Port’s two-way cargo initiative is another way that some shippers are maximizing the use of their vessels. Over the past several years, Thunder Bay Port Authority has been successful in attracting inbound project cargo shipments to the port on vessels that also load with outbound grain shipments. The Port Authority has invested millions of dollars in general cargo facilities in the form of dock improvements, laydown areas, an intermodal yard and a new mobile harbour crane, in an effort to diversify and increase the port’s cargo.
Investment has not only been taking place at the port level, but also at the Seaway level. In the past two years, Canadian companies have invested over $600 million in a new domestic fleet for the Seaway and an additional $600 million in new ocean vessels served by the Seaway. The new domestic fleet will be faster and significantly more fuel-efficient than the existing fleet and will be capable of carrying more cargo per load. This unprecedented investment indicates a revival taking place on the Seaway. The Seaway itself has undergone major infrastructure upgrades over the last several years to the tune of more than $200 million. These upgrades have included lock rehabilitation, the institution of hands-free mooring systems and a new draft information system.
At the head of this improved Seaway system, Port of Thunder Bay has been diversifying the cargoes it handles while experiencing growth in its existing cargo segments. Major changes are occurring in the market that makes up more than half of the port’s cargo tonnage, and things are looking up. Port of Thunder Bay is looking forward to increased tonnages in future years.