Transload facility to fuel West Canada grain exports

Transload facility to fuel West Canada grain exports

Port of Prince Rupert.

Brian Friesen, vice president of trade development and communications at Prince Rupert, said the Regina transloading facility will open up new export opportunities for the port in southern Saskatchewan, Canada. Photo credit: The port of Prince Rupert.

The opening of a grain transloading terminal in western Canada in time for the 2019 harvest will add to the growing volume of container exports from Prince Rupert and Vancouver as those ports position themselves as North American gateways to Asia.

The Intermobil inland terminal in Regina, Saskatchewan, will be operated by Mobil Grain, an AGT Food and Ingredients subsidiary. It is located on the Canadian National Railway line, which serves Prince Rupert and Vancouver. News of the planned transloading facility came as Prince Rupert announced Tuesday that its Fairview Container Terminal handled its 1 millionth container in 2018. The 40-foot container was loaded with dimensional lumber from Canfor’s Plateau mill at CN’s Prince George transload facility before it arrived by rail at Prince Rupert. Exports year to date are up 25 percent, the port announced, helping to drive the record container volume.

Brian Friesen, vice president of trade development and communications at Prince Rupert, said the Regina transloading facility will open up new export opportunities for the port in southern Saskatchewan, a region that is rich in agriculture and resources. By the 2019 harvest season it will add to the growing commodities exports in Prince Rupert, which were given a big boost in 2017 when Ray-Mont opened a transloading facility near the port.

Prince Rupert, Vancouver — substantial volume uptrend

The Canadian ports continue to experience strong growth, with total volume year to date through November including imports, exports, and empty containers up 11 percent in Prince Rupert and 4.3 percent in Vancouver compared with the first 11 months of 2017, according to port statistics published on their websites. 

News of the new grain transloading facility follows the announcement in August of a $28.2 million expansion of the Ashcroft inland terminal in British Columbia. That facility transloads agricultural, mining, and forest products from rail and truck to containers for intermodal transport to the Pacific Coast ports of Canada. Growing exports of agricultural and forest products are contributing to the need for expansion of terminal capacity in Prince Rupert. The port opened a second berth at the Fairview Terminal and added its fourth weekly trans-Pacific service. Prince Rupert in 2019 will begin construction on a further expansion of the terminal.

Ports on the west coast of North America generally have been import-focused, handling containerized imports from Asia for the local market and moreso to major population centers in the eastern half of the continent. Statistics published on their websites show imports in Vancouver through November totaled 1.6 million TEU and exports totaled 1 million TEU. Imports in Prince Rupert, located 500 miles north of Vancouver, totaled 517,238 TEU and exports totaled 237,564 TEU year to date.

The ports continue to promote their export potential, with exports in Prince Rupert so far this year up 25 percent compared with the first 11 months of 2018. Container exports in Vancouver increased 2.1 percent year to date. A more balanced container flow benefits the shipping lines and railroads as well as the ports.

However, the trans-Pacific trade between North America and Asia is perpetually imbalanced, with large volumes of containerized merchandise and manufacturing inputs destined for the eastern half of the continent outweighing the mostly commodity exports from the United States and Canada. Inland terminals such as in Regina and Ashcroft located in the heartland receive grain, forest products, and minerals via bulk rail or truck and transload the exports to marine containers. Since the inland terminals are often located in rural areas, empty containers from distant population centers must be repositioned to the inland transloading facilities.

Murad Al-Katib, CEO of AGT, said the Regina terminal will offer storage for 2,500 containers. The empty containers will be loaded with export commodities for shipment to the ports. Construction of the inland terminal comes as Canada works to develop new markets and countries in Asia import commodities to fill the growing demand from their consuming populations for higher-protein foods, Al-Katib said. To fill the demand for empty containers, empties from Chicago and Montreal will be repositioned in Regina on the intermodal trains returning to the Pacific Coast, he said.

Trade tension impact on grain, commodities exports

Trump administration tariffs on US imports from China are threatening to harm exports of grains and other commodities as China retaliates with punishing tariffs on US grains such as soybeans. Furthermore, the tariffs harm the reputation of the United States as a reliable supplier of grains, forest products, and minerals, so countries in Asia have been diversifying their sourcing of those commodities, many of which are grown in Canada.

The US-China trade war is making it more difficult for US West Coast ports to compete with Vancouver and Prince Rupert in the trans-Pacific trade, and the Northwest Seaport Alliance of Seattle and Tacoma are really feeling the bite. The Canadian ports’ share of the North American Northwest regional imports and exports increased from 58.2 percent in 2014 to 63 percent this year, according to statistics provided by PIERS, a JOC.com sister company. Seattle and Tacoma blame their declining market share in part on their higher intermodal rail rates, with a study last year indicating rates through the Pacific Northwest gateway to Chicago via the US western railroads are $400-600 per FEU higher than the CN and Canadian Pacific intermodal rates to Chicago.

Friesen said Prince Rupert has received inquiries from overseas countries about expanding their sourcing in Canada as the US-China trade war continued. “We have our eyes on the future, the next three to five years, but also the longer term,” he said. Friesen expects exports moving through Prince Rupert will increase from Canada but also from the US. The CN service from Prince Rupert extends to Chicago, Memphis, and New Orleans.

Contact Bill Mongelluzzo bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.