(Resource News International) — Extremely cold temperatures and high winds, slowing the movement of rail cars to export terminals in British Columbia, are prompting some concern for Canada’s grain and oilseed shippers.
Temperatures across Alberta, Saskatchewan and Manitoba have been in the -30° to -40°C range and when the wind has been factored in, temperatures have been in the -40° to -50°C 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.
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Using the port at Prince Rupert, B.C. as an example, Dyck said that in 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 program was running current with vessel arrivals.
The loading of vessels at the grain and oilseed export facilities at Prince Rupert and Vancouver 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, Dyck said.
“Once a vessel has been chartered to pick up grain from Vancouver, everything needs to fall into place, including rail car movement,” Dyck said.
He indicated that at the time when the CWB enters into an agreement with a customer, a close examination of historic rail car movement for the time period is conducted.
“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.”
Dyck 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 his purchase over a greater period of time, if possible, he said.
In a worst case scenario, he said, if a ship has been waiting for an extended period of time to load, demurrage charges can occur.
Canadian National Railway (CN) on Tuesday temporarily reduced freight service in most areas of Western Canada due to extreme cold and wind conditions. CN said it 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 (CPR), said the company’s rail line system was operating as fluid and as normally as possible given the temperature considerations.
“However, the cold snap in Western Canada will impact all sectors of our rail line, including people, equipment, et cetera,” Lovecchio said. “But we have not issued any type of warning as CN Rail has at this time.”
