GrainsWest Winter 2021

Winter 2021 Grains West 28 “There is a lower capital outlay involved as you can buy in smaller quantities than with bulk shipping,” said Giles. “When shipping a premium product, you can tell which railcar it came from, so it’s easier to track shipments for identity preserved products.” Shippers will often realize a greater profit margin from containerized shipping, though this depends on the country and product involved, and returns vary from year to year. As well, not everyone has access to bulk terminals. “If a small shipper in Saskatchewan is sending lentils, they won’t be using a bulk terminal, so the container option lets others play in the market and get access to water,” said Giles. “It also allows smaller customers like feed mills, who can’t buy in the quantities required for bulk, to participate in the market.” On the downside, containers cost more per tonne to ship product, and shippers are at the mercy of container availability at any given time. “When the container supply is plentiful, you have a lot of access and options, but this year is tight,” said Giles. “If three shipping lines are serving a destination, things are more competitive and rates go down. Conversely, when you don’t have that kind of competition, rates go up and you may not even find an available container for your product.” REGROUPING AND REBOUNDING Though the pandemic initially had a negative impact on container shipping, such exports rebounded with annual export volumes for many crops hitting record totals. “There was a bit of an issue at first with container exports being impacted by COVID-19 overseas, as Asian production of manufactured goods came to a standstill,” said Mills. “That reduced the number of containers coming to North America, so there was a lack of containers available to ship items back to Asia.” Given the decrease, many railways cut portions of their rail cars, manpower and locomotive fleets. This was exacerbated when the pandemic shut down much of the retail sector in the United States. Local loaders saw a lack of empty containers and a lack of rail capacity thanks to such furloughs. “Since then, many retail markets in North America have rebounded somewhat, so that container supply has largely been revived,” said Mills. “We are now seeing significant volumes of export goods moving. There is still a lack of empties in certain regions, but we are able to fulfil the record volumes coming through ports. New mid-year records of 16.3 MMT were set for bulk and containerized grain moving through Vancouver’s port, an increase of 10.4 per cent or 1.5 MMT compared to mid-year grain records from the previous year.” EXPANDED HORIZONS Another potential area for container growth is in servicing new markets, where small startup export companies may avoid jumping into huge volumes on day one. In such an instance, the box systemmay also hold more appeal for the shipper. “As we dive into new markets, credit risk can be a big consideration, as it may be hard to get paid from some countries,” said Giles. “The container business is a way to mitigate that risk by sending smaller quantities and then sending more once you receive payment, rather than one bulk shipment every few months. This approach also means more regular cash flow, which can be important for a new enterprise.” As well, the flexibility of containerized shipping has allowed many sellers to expand their reach. “We ship to over 100 markets every year, and the only reason this is happening is that somebody in Peru wants a container of lentils and so that’s how you send it,” said Northey. Among the benefits of container grain shipping is the ease of tracking they allow for premium, identity-preserved products. Container shipping may also lead to higher profit margins as compared to bulk shipment. FEATURE Photo:CourtesyofVancouverFraserPortAuthority