Port of Thunder Bay will enter the 2015 shipping season amidst optimism, buoyed by the strong results of the 2014 shipping season which wrapped up in January. The Port recorded its highest cargo volumes in 16 years due to a surge in shipments of Western Canadian grain.
Thunder Bay’s grain volumes rose dramatically to 8.3 million metric tonnes in 2014, 43% more than the five-year average of 5.8 million tonnes. Among the increases in grain shipments, the port shipped its second highest volume of canola on record, and its highest volume of wheat since 1997.
Thunder Bay is a hub for Western Canadian grain exports, located on the northwest shore of Lake Superior at the head of the Great Lakes – St. Lawrence Seaway. The furthest inland port in Canada, Thunder Bay’s proximity to Western Canada makes it a gateway for cargo destined to Europe, the Middle East, Africa, Mexico and South America.
In Thunder Bay, grain is loaded at eight grain elevators and two dry bulk handling facilities onto Canadian “laker” vessels and foreign “saltie” vessels. While some of the grain is shipped to domestic or U.S. ports for regional distribution, the majority makes its way to the Atlantic ocean via the Seaway System, and then on to international markets.
Several factors influenced the rise in shipments experienced in 2014, including record grain production on the prairies in 2013, and regulation introduced by the federal government mandating Canada’s two major railways to move specified quantities of grain to port weekly.
“At 76 million tonnes, the 2013 crop was fully 25% greater than any previous harvest,” says Bruce McFadden, Director of Research and Monitoring at Quorum Corporation, Canada’s grain monitoring body. “With a further 5 million tonnes in carry-over [from the previous year], the grain supply reached a remarkable 81 million tonnes. This presented enormous challenges to the grain handling and transportation system.”
The Fair Rail for Grain Farmers Act, implemented on March 26, was prompted by farmer complaints that railways were not allocating enough railcars to move the previous year’s record crop to market. The harsh 2013-14 winter across the Prairies and Great Lakes region had caused delays in the transportation system which created a major backlog of grain by the spring. In an area susceptible to spring flooding, it was imperative to get the grain moving as quickly as possible.
With the legislation in place, both CN and CP increased their railcar allocation for grain, and each railway moved at least 500,000 tonnes of grain to Canadian ports almost every week.
Port of Thunder Bay benefited from its close proximity to the Prairies, as well as its broad terminal ownership by many of Canada’s top grain companies. All terminals shipping grain during the year recorded double-digit increases in 2014 over 2013. These facilities represent the ownership interests of Canada Malting Co., Cargill, CWB, Mobil Grain, Parrish & Heimbecker, Richardson International, Viterra and Western Grain By-Products Storage.
The port’s two Richardson elevators led the charge, combining to handle the largest portion of Thunder Bay’s grain shipments. Richardson’s Current River Terminal, which opened in November 2013, completed its first full season. Mobil Ex Terminal, a dry bulk handling facility recently acquired by Mobil Grain, handled its first shipment of grain in 2014. Meanwhile Thunder Bay Terminals, the port’s primary throughput facility for coal and potash, shipped grain for the first time since 2011.
“Canadian grain companies are demonstrating their confidence in the Seaway supply chain with the tremendous volumes,” remarked Tim Heney, CEO of Thunder Bay Port Authority. According to Heney, shippers are taking notice of the capacity of Thunder Bay and the Seaway to handle the sudden rise in grain cargo, “The efficiency of the port’s grain elevators is key. An average of 1 million tonnes of grain were loaded in Thunder Bay every month of the 2014 season.”
That efficiency helped the port bounce back from an unprecedented four-week delay to the opening of the season. The cold, long winter enabled an extremely thick and widespread covering of ice on Lake Superior and the rest of the Great Lakes, making the system impassable until mid-April.
Once the port was open for business, Thunder Bay’s grain elevators made up for lost time working around the clock to get ships loaded as quickly as possible. At the beginning of May, port tonnages were down 85 per cent compared to the five-year average. Within two months port tonnages had not only rebounded but actually surpassed the five-year average for the end of June.
During the month of May more than 1.5 million metric tonnes of cargo were handled in the port, making it the port’s busiest single month since December 1998. In addition to grain, the port’s mainstay cargoes include outbound shipments of Western Canadian coal and potash. The port is an inbound hub for project cargo destined for the Prairies, including oilsands projects and windmill parts. Other inbound cargoes include road salt, aggregate, and liquid petroleum for regional use.
Thunder Bay is a full-service port home to two tug services, three vessel agents, customs brokers, underwater services and multiple resident trucking companies. City of Thunder Bay also operates a cruise ship terminal providing tourist access to this picturesque city.
Heney is expecting more positive results for Thunder Bay in 2015. “With grain supply remaining strong and the port’s terminals eager to capitalize on that opportunity, we expect to see continued above-average shipments for the upcoming season.”
McFadden confirms that the grain is certainly there for the taking. “In 2014, Western Canadian farmers produced the second largest harvest on record after the bumper crop of 2013. When added to the carry-forward stock on farm and in primary elevators, the total supply to be moved is 74 million tonnes, also the second largest ever faced.”
Looking further ahead, McFadden hints that these historic grain production levels may be something to get used to. “There is ample cause to expect these larger demands to continue. Advances in genetics and agronomic practices are steadily at work enlarging our annual harvests. Of course, Mother Nature will bring periodic fluctuations, but the last two years provide strong indication of higher production levels ahead.”
A future of larger harvests and carry-over stocks would suit Thunder Bay, home to the largest grain storage capacity in Canada, just fine. In 2014, a convergence of circumstances gave Port of Thunder Bay the opportunity to demonstrate its capabilities during one of Canada’s most challenging transportation dilemmas. Riding a wave of momentum, the port’s grain terminals are positioned to capitalize on continued strong grain demand in 2015 and beyond.