Logistic and Transport Issues of Canadian Grain Exports 2

Transcription

1 Ignacy Chrzanowski 1 Maritime University of Szczecin (Poland) Logistic and Transport Issues of Canadian Grain Exports 2 Introduction A major grain exporter Canada faces formidable obstacles in terms of transport and logistics of its grain movements. Distances to exporting ports and climatic conditions are the two main factors that shape the logistic system of these exports. While their major impact is of strictly economic nature, regulatory and institutional issues also play an important role. Overall Canadian grain industry is strongly regulated and even the recent demise of Canada Wheat Board (CWB) 3 has not eliminated regulation in this domain. But the problems with regulation of grain logistics go much farther and include, among others, the quasi monopolistic role of rail transport for grain shipments 4. The present feature paper reviews some of the most essential problems related to grain industry and its servicing by the Canadian transport system. Emphasis has been put upon transport and logistics as these elements determine the present and the future of the Canadian grain industry. WRLD grain industry and trade International shipments of grain world-wide present certain problems as far as logistics and transportation issues are concerned. They result not only from the very nature of the cargo itself but depend to a large extent on geographical, climatic as well as commercial aspects of these trades. One of them is the fact that although the culture grain is spread on many continents, it has historically been centralized in certain geographical areas, while consumption is spread all over the globe. Grain shipments are usually made over great distances which add extra costs to the price of that commodity loco destination. Table 1 below shows world production of principal grains in the years Tab. 1. World production of main grains in million metric tonnes [8] Grain Maize (corn) Rice Wheat Barley Maize (corn) Rice Wheat Barley Source: FAOStat. In 2013 global cereal production reached a record 2,521 million tonnes. Maize, wheat, and rice combined accounted for 89% of all cereal production worldwide in 2012, and 43% of all food calories in 2009, while the production of oats and triticale has drastically fallen from their 1960s levels. Other grains 5 represent considerably smaller quantities. According to Statista 6 the 2012 world production of other grains was as follows (million metric tons): Millet 29,87; Oats 21,06; Rye 14,56. The case of oats is worth mentioning, however. In 1961 the world production of oats, then one of the main food staples, was 50 million tonnes, but dropped to 21 million tonnes, or 58% by At the same time the production of maize increased Maritime University of Szczecin, Faculty of Transport Engineering and Economics; i.chrzanowski@am.szczecin.pl. Reviewed paper. Canadian Wheat Board was established by the act of Canadian Parliament in 1935 as a mandatory producer marketing system for wheat and barley in the prairie provinces of Alberta, Manitoba and Saskatchewan, plus small parts of British Columbia. Under the CWB s jurisdiction it was illegal for farmers to sell their wheat and barley through any other channels than CWB. Following increasing criticism of its monopsony role CWB was liquidated in August For more details see Canadian Wheat Board Act. On Canadian grain transport deregulation see, for example: J.Monteiro and G. Robertson: Grain Transportation in Canada Deregulation, www. ctrf.ca /gatineau FAO statistics include under the heading grain over twenty varieties. Some of them, such as fonio or quinoa are harvested in marginal quantities or are consumed only locally. Statista. The Statistic Portal. Retrieved July 19,

2 by over 325%, while that of rice and wheat by 153% and 204%, respectively. These changes have been the result of changing consumption patterns, particularly in industrialized countries, productivity of particular crops (oats or rye give substantially smaller yields per acre compared to maize or wheat, let alone rice which is harvested twice a year or more), and improved agricultural technologies. It should be borne in mind that population explosion in the less developed areas of the world plays a significant role in the distribution and consumption of food and cereals in particular. In statistical terms the world production of main cereals would probably be sufficient had it been used exclusively for nutrition purposes and evenly distributed throughout the globe. This is not, however, the case. Large quantities of cereals are used for industrial purposes, including production of fuels 7, and as animal feed, reducing human consumption. Rice is probably the type of grain that is consumed mostly as a nutrient, particularly in the developing world. Still large quantities of rice are shipped from rice exporting countries, such as India, Thailand or Vietnam to the consuming areas where deficit between production and consumption of rice exists. Five major exporters of rice including the 3 countries above plus Pakistan and U.S. exported in the 2012/2013 season 31.3 million tons of rice, or 4.3% or world production of rice 8, which is a considerably lower percentage compared to other main grains, such as wheat or corn. Characteristically, some countries which used to be exporters of rice, such as the Philippines for example, have of late become importers of this commodity. Such trends have impact on transportation patterns in grain trades throughout the world. According to World Watch Institute 9 in 2011, 571 million tons of grain was consumed as food, with India consuming 89 million tons, China 87 million tons, and the United States 28 million tons. The world relies heavily on wheat, maize (corn); these three grains account for two-thirds of global food energy intake. Grains provide the majority of calories in diets worldwide, ranging from a 23 percent share in the United States to 60 percent in Asia and 62 percent in North Africa. However, the reliance on grain crops for food security is threatened by more-extreme climatic events, and especially droughts and floods. According to the United Nations International Strategy for Disaster Risk Reduction, the World Food Programme, and Oxfam International, some 375 million people will be affected by climate change-related disasters by By 2050, the FAO notes, percent more people will be subject to hunger based on the changing climate s effects on agriculture, and 24 million more children are expected to be malnourished 21 percent more than if there were no climate change 10. The future of grain industry remains thus unclear. Two factors are of crucial significance: demographic pressures mentioned above and the transportation costs. The latter issue will be covered in more detail in the subsequent parts of the present paper. Canadian grain industry Canada is among the world leaders in grain production, although in absolute terms the country produces much less compared to the EU, China, India or the U.S. Table 2 below provides data on wheat production in the years Canada ranks 8 th, with an output that in 2012 was 5-times smaller compared to the EU, 4.7 times smaller than in China and 3.5 times smaller than the production of wheat by India. Canada produced only 44% of the volume of the U.S. wheat production. The latter country is the absolute world leader in the production of corn, providing in 2010 over 42% of the world output for this grain. Canada s corn output is much smaller, approximately 3-4% of the U.S. production. In other grains Canadian output as a percentage of the 2010 U.S. production was a follows: Barley 186; Oats 214; Rye 169. Canada produces more than twice as much oats than the U.S. and almost twice the volume of barley output, a primary component of beer brewing. Rye represents a much similar case. The dominance of Canada over the U.S. in coarse grains other than corn is the result of the climatic and soil conditions in the former country. Only those cultures which are resistant to harsh climate and poorer soils can be cultivated in Canada. That relates primarily to corn which can be grown only in the so called corn-belt which includes a strip of land of approximately 150 km along the border with the U.S. and in the St. Lawrence valley. Yet Canada is the major exporter of wheat which is the result of the absolute sizes of domestic consumption of wheat, itself the result of the population. Canada s population is roughly 10 times smaller compared to the U.S., let alone any comparisons with China or India in demographic terms. Since transport and logistics are the main focus of the present paper it is not possible to provide a more detailed analysis of issues related to Canadian agriculture itself, although there exists a close relationship between these two topics. We will thus concentrate on Canada s grain exports and their impact on transport and logistics of these trades. 7 Particularly corn which is increasingly used for the production of ethanol. 8 U.S. Department of Agriculture: Grain World Markets and Trade. Washington D.C World Watch Institute: Global Grain Production at Record High Despite Extreme Climatic Events. Washington D.C Ibidem

3 Tab. 2. Ten leading producers of wheat (million tons) Country EU China India United States France Russia Australia Canada Pakistan Germany Source: FAOStat. Canada a major exporter of grain Canada is the world s second, after the U.S., grain exporter. In the 2011/2012 season the country exported over 32 million tons of grain and flour (see table 3). That was 2.2% more than in the previous season and nearly 22% more compared with the average for the period 2001/2002 to 2010/2011. Wheat, including the durum variety, and wheat flour accounted for more than half of total exports. Canola represented almost 27% of Canadian grain exports by volume. Tab. 3. Canadian grain exports 2001/2002 to 2011/2012 by category ( 000 tons) Grain variety 2011/ /2011 Average 2001/20002 to 2010/2011 Wheat 13,340 12,217 11,659 Durum wheat 3,569 3,367 3,555 Wheat flour 194, , ,000 Oats 1,196 1,013 1,128 Barley 1,181 1,287 1,485 Rye 100, , Flaxseed 257, , ,000 Canola 8,580 7,032 5,024 Soybeans 1,964 2, ,000 Peas 1,606 2,461 1,479 Corn 74,000 1, ,000 Total 32,061 31,357 26,330 Totals in the column do not add up due to roundings. Source: Canadian Grain Council annual report 2012/ China, Japan and the U.S. are the largest importers of Canadian grains and wheat flour (see tab.4 below) accounting for 37% of the total grain exports of Canada. That was nearly 30% more that the volume exported in the season 2010/2011. China increased her import of Canadian grain and wheat flour by over 121% over the corresponding period of time that was mostly due to poor crop and changing consumption patterns with a growing demand for non-traditional dishes not based on rice. However, over half of Canadian exports of grains and wheat flower goes to countries classified as others, and mainly North Africa, Eastern and Central Europe and, Southern Europe, mainly Italy the traditional importer of the durum wheat that is the main ingredient for manufacturing of the traditional Italian pasta. In the season 2011/2012 Italy imported 528,000 tons of durum wheat, i.e. 14.2% of total exports of that category of grain. Three North African countries: Tunisia, Algeria and Morocco imported almost 1.4 million tons of the durum variety, i.e. 39% of the total. These countries use durum wheat to make their traditional dish: cous-cous. In terms of geographical structure of Canadian grain exports the bulk of these exports is seaborne. For wheat the Pacific ports dominate with 8.7 million tons followed by the Eastern sector ( Atlantic ports: Montreal, Halifax and others) with 3.3 million tons. Combined these two areas shipped by sea over 90% of Canadian wheat, the remaining 10% using other modes of transport and principally rail and road

4 Tab. 4. Major importers of Canadian grains and wheat flour ( 000 tons) Country of imports 2012/ /2011 Average 2009/2010 China P.R. 4,154 1,877 3,653 Japan 3,870 4,087 3,374 United States 3,782 3,159 3,627 Mexico 2,703 1,981 2,174 United Arab Emirates 1,124 1, ,000 Others 16,428 19,162 17,191 Total 32,061 31,357 30,818 Source: as in tab. 3 above. It should, however, be emphasized that certain guantities of wheat produced in the Prairie provinces of Alberta, Manitoba and Saskatchewan are forwarded by sea from the ports of Thunder Bay and Churchill and others when these ports are free of ice. Supply chain of canadian grain exports Logistics and transportation issues in Canada s grain exports are determined by several factors, among which geography, climate and concentration of grain production in the West Provinces (Manitoba, Saskatchewan and Alberta) play primordial role. At the receiving end of Canadian grain exports are countries located on several continents. As a result Canadian grain farmers face some of the longest inland distances to market of any exporting nation. So transportation is a large share of the Canadian farmer s costs. Minimizing these costs critically affects their success, particularly when margins get squeezed by low grain prices 11. The physical elements of the logistic system involved in Canadian grain exports include a number of components which are presented in the graph below. Rail transport represents a major element of the system which for a very long time had been the source of discontent of grain farmers and the main cause of controversies. The reforms of the late 1990s and early 2000s considerably mitigated these controversies but still the system was not efficient from the farmers perspective and further reforms were required. The farmers demands were met with the introduction of the Bill- C30 submitted before the Canadian Parliament in March Chart: Components of Canadian logistics system for grain exports. Fig. 1. Components of Canadian logistics system for grain exports The changes brought by Bill C-30 will, among other things: Create regulatory authority to allow Canadian Transportation Agency (CTA) to extend the inter-switching 13 distances in Saskatchewan, Alberta and Manitoba to 160 km, for all commodities, in order to increase competition among railways Create the regulatory authorities to add greater specificity to operational requirements in Service Level Agreements Establish regulatory authorities in the Canada Grain Act to address non-performance by grain companies in their contracts with producers 14. The unsatisfactory performance of the Canadian rail system in winter of 2013/2014 was due in part to the very good harvest in 2013 and extremely cold winter, with temperatures dipping to minus 50 degrees C in certain areas. According to Statistics Canada the production of all field crops in Canada amounted to 96.6 million tons or 25% more that in the 2012/2013 crop year 15. This was due to ideal growing conditions in most cultivated areas. 11 Grain Handling and Transportation System Profile Report. May An Act to amend Canada Grain Act and the Canada Transportation Act and to provide for other measures. Publication No C30 E. April Inter-switching allows the shipper to change the railway company over a specified distance (30 km). New Act will allow different distances. 14 See: footnote 8, p Agriculture and Agri-Food Canada: Outlook for Principal Field Crops. March

5 The two factors combined contributed to a considerable backlog, estimated at 4.5 million tons, in rail shipments of exported grain to loading ports. In some cases grain producers had to wait 3 6 months to send their grain to international markets 16. Two main railways are the backbone of the Canadian grain logistic system: Canadian Pacific and Canadian National. Both railways operate major lines between the Atlantic and Pacific Coast, with many branch lines which enable movements of grain from the Prairies to Pacific ports of Vancouver and Prince Rupert, Great Lakes and St. Lawrence Seaway. They are also able to ship grain to U.S. locations and Mexico. The Canadian rail system operates about 30,000 km of rail lines, mostly composed of an extensive network of branch lines. Altogether there are over 1, 100 railway shipping points for grain. Grain is moved from the primary elevator system to port and other terminals by rail, using approximately 11,000 boxcars and 14,700 hopper cars. The capacity of a standard boxcar is about 54 t; of an average hopper car about 91 t. During peak movements, about 500 trains per week place empty cars at primary elevator points and take loaded cars to their destinations. The primary elevators are located at some 1100 points along approximately 30,000 km of rail lines, about 85% of which are branch lines with various carrying capacities. The average distance from a primary elevator to a port-terminal elevator is 1400 km; the average round-trip time is slightly under 3 weeks. There are four major ports used for grain exports from Canada: Vancouver, Prince Rupert, Thunder Bay and Churchill. On the West Coast the total storage capacity is 1,212,000 t, most of which is at 5 terminals in Vancouver. West Coast terminals operate on a year-round basis. The terminal at Churchill, with a storage capacity of 140,000 t, has a very limited shipping season (less than 3 months per year). Thunder Bay has 12 terminal elevators with a combined storage capacity of approximately 2 million t; these terminals ship grain for approximately 8 months of the year. Grain loaded onto ships at Vancouver, Prince Rupert and Churchill moves directly to export destinations. In the case of Thunder Bay, only about 10% is loaded directly onto oceangoing ships; the remainder is carried by lake vessels to transfer elevators situated along the waterway between Thunder Bay and the seaboard. There are 27 transfer elevators with a capacity of 3.4 million t 17. Despite the distance disadvantage for grain exports from Canada, the ports of the Pacific Coast: Vancouver and Prince Rupert enjoy considerable advantage over the U.S. ports in terms of transit time to the Far East ports (see tab. 5 below). Shipments from Prince Rupert to Hong-Kong, for instance, take 264 hours, and are shorter by nearly 9% compared to Vancouver and Seattle, but by as much as 17% shorter compared with Los Angeles and 13% shorter as opposed to Oakland. Similar differences exist in other cases. Both ports are open all year-round; while Churchill is open only three months a year. Grain exported from the St. Lawrence ports has to transit from the Prairies via the Great Lakes and the St. Lawrence Seaway. It is exported primarily to Europe and Africa. The ports of Eastern Canada are subject to climatic conditions and freeze in winter. However, with the help of ice-breakers the port of Montreal which is the principle container port of Canada, is practically operational all year-round 18. Grain is transported in two different types of railcars: standard boxcars of approximately 54 tons and hopper cars of over 90 tons. The total fleet of cars amounts to approximately 25,000 units. Increasingly containers are used to carry grain but these still play a limited role. A typical train with grain cargo may be composed of up to hundred cars. The average transit distance to export ports is about 1,400 km and travel time may take up to 3 weeks. There are four major ports used for grain exports from Canada: Vancouver, Prince Rupert, Thunder Bay and Churchill. On the West Coast the total storage capacity is 1,212,000 t, most of which is at 5 terminals in Vancouver. West Coast terminals operate on a year-round basis. The terminal at Churchill, with a storage capacity of 140,000 t, has a very limited shipping season (less than 3 months per year). Thunder Bay has 12 terminal elevators with a combined storage capacity of approximately 2 million t; these terminals ship grain for approximately 8 months of the year. Grain loaded onto ships at Vancouver, Prince Rupert and Churchill moves directly to export destinations. In the case of Thunder Bay, only about 10% is loaded directly onto oceangoing ships; the remainder is carried by lake vessels to transfer elevators situated along the waterway between Thunder Bay and the seaboard. There are 27 transfer elevators with a capacity of 3.4 million t 19. Despite the distance disadvantage for grain exports from Canada, the ports of the Pacific Coast: Vancouver and Prince Rupert enjoy considerable advantage over the U.S. ports in terms of transit time to the Far East ports (see tab.5 below). Shipments from Prince Rupert to Hong-Kong, for instance, take 264 hours, and are shorter by nearly 9% compared to Vancouver and Seattle, but by as much as 17% shorter compared with Los Angeles and 13% shorter as opposed to Oakland. Similar differences exist in other cases. Both ports are open all year-round; while Churchill is open only three months a year. 16 See: G. Cherevyk, House of Commons; Standing Committee on Agriculture and Agri-Food. Evidence. 2 nd Session. February 2014, E.W. Trychniewicz, Grain Handling and Marketing, CDNENCYCLOPEDIA, Last edited-december The Port of Montreal is operated all year-round since 1964 when service of ice-breakers was started. 19 E.W. Trychniewicz, Grain Handling and Marketing, CDNENCYCLOPEDIA, Last edited-december

6 Grain exported from the St. Lawrence ports has to transit from the Prairies via the Great Lakes and the St. Lawrence Seaway. It is exported primarily to Europe and Africa. The ports of Eastern Canada are subject to climatic conditions and freeze in winter. However, with the help of ice-breakers the port of Montreal which is the principle container port of Canada, is practically operational all year-round 20. Grain is transported in two different types of railcars: standard boxcars of approximately 54 tons and hopper cars of over 90 tons. The total fleet of cars amounts to approximately 25,000 units. Increasingly containers are used to carry grain but these still play a limited role. A typical train with grain cargo may be composed of up to hundred cars. The average transit distance to export ports is about 1,400 km and travel time may take up to 3 weeks. From/To Hong Kong Tab. 5. Transit time from North American ports to the Far East ports (in hours) Kaohsiung Taiwan Shanghai China Kobe Japan Tokyo Japan Yokohama Japan Bussan South Korea Prince Rupert Vancouver Seattle Tacoma Oakland Los Angeles Based on cruising speed of 20 knots. Source: Canadian National: Other modes of transport used in moving grain from the production areas to the ports are: trucking and inland shipping. Both are at a disadvantage compared to rail transport, although the nature of this disadvantage is different for each of these two modes of transport. Road transport, because of its economics, is uncompetitive for longer distances against rail, whilst inland water transport in Canada is limited due to climatic conditions. Still road transport plays a significant role in the supply chain of grain. Trucks used to carry grain from farms to primary storage elevators 21 vary considerably in terms of their carrying capacity (3 to 20 tons) and cover on average a distance of 20 km. Grain farmers use either their own trucks or lease them. The cost structure of the main components of the Canadian grain logistics and transportation system are presented in table 6 below. Tab. 6. Cost components of the Canadian grain logistics and transportation system Cost components % share Marketing 3 Road transport 7 Primary storage 17 Rail transport 56 Port terminal 17 Source: WESTAC Rail mode represents over a half of all logistics and transport costs of Canadian grain exports. Primary storage and terminal (port) costs represent over a third of the total costs. It should, however, be remembered that the bulk of Canadian grain exported by sea is sold on an f.o.b. basis, since Canada does not operate an ocean-going fleet of vessels dedicated to transport of grain. If a c.i.f. transaction occurs shipping of grain from Canadian seaports is done with chartered vessels. The second major component of the Canadian grain logistics and transportation system after transport itself is the primary storage. It is secured with silos at shipping points for railways where grain is stored after harvest and delivery from farms. The network of silos is very dense and despite recent trends towards concentration of storage in fewer and bigger silos, which resulted in the decline of their number, silos are still dotting the Canadian countryside. At the end of 2011 there were 360 licensed elevators located in 271 communities. However, despite the nearly threefold decline in numbers compared to 1995, their capacity remained nearly the same as older silos have been substituted with newer and more efficient units were constructed. It is worthwhile mentioning that grain spends on average 68 days in the logistics system between the time it leaves the producing farm and the time of loading onto a ship at the exporting port 22. Graph 2 below shows the location of grain licensed silos in the three Prairie Provinces in The largest concentration of these is Saskatchewan. 20 The Port of Montreal is operated all year-round since 1964 when service of ice-breakers was started. 21 It is estimated that there are about 120, 000 grain producing farms in Canada. See: E.W.Trychniewicz: op.cit. 22 See: Grain Handling and Transportation System Profile. WESTAC, May

7 The silos capacity in the ports of loading (Vancouver, Prince Rupert, Churchill and Thunder Bay) is deemed reasonably adequate, as is the loading equipment, but the backlog cause in winter of 2013/2014 showed many deficiencies. Still there are complaints that the whole supply chain for exported grain is too long and quite often ships that calls at the ports of export have to wait before actual loading operations can start. Other modes of transport used in moving grain from the production areas to the ports are: trucking and inland shipping. Both are at a disadvantage compared to rail transport, although the nature of this disadvantage is different for each of these two modes of transport. Road transport, because of its economics, is uncompetitive for longer distances against rail, whilst inland water transport in Canada is limited due to climatic conditions. Still road transport plays a significant role in the supply chain of grain. Trucks used to carry grain from farms to primary storage elevators 23 vary considerably in terms of their carrying capacity (3 to 20 tons) and cover on average a distance of 20 km. Grain farmers use either their own trucks or lease them. The cost structure of the main components of the Canadian grain logistics and transportation system are presented in table 6 below. Rail mode represents over a half of all logistics and transport costs of Canadian grain exports. Primary storage and terminal (port) costs represent over a third of the total costs. It should, however, be remembered that the bulk of Canadian grain exported by sea is sold on an f.o.b. basis, since Canada does not operate an ocean-going fleet of vessels dedicated to transport of grain. If a c.i.f. transaction occurs shipping of grain from Canadian seaports is done with chartered vessels. The second major component of the Canadian grain logistics and transportation system after transport itself is the primary storage. It is secured with silos at shipping points for railways where grain is stored after harvest and delivery from farms. The network of silos is very dense and despite recent trends towards concentration of storage in fewer and bigger silos, which resulted in the decline of their number, silos are still dotting the Canadian countryside. At the end of 2011 there were 360 licensed elevators located in 271 communities. However, despite the nearly threefold decline in numbers compared to 1995, their capacity remained nearly the same as older silos have been substituted with newer and more efficient units were constructed. It is worthwhile mentioning that grain spends on average 68 days in the logistics system between the time it leaves the producing farm and the time of loading onto a ship at the exporting port 24. Graph 2 below shows the location of grain licensed silos in the three Prairie Provinces in The largest concentration of these is Saskatchewan. The silos capacity in the ports of loading (Vancouver, Prince Rupert, Churchill and Thunder Bay) is deemed reasonably adequate, as is the loading equipment, but the backlog cause in winter of 2013/2014 showed many deficiencies. Still there are complaints that the whole supply chain for exported grain is too long and quite often ships that calls at the ports of export have to wait before actual loading operations can start. Deficiencies of the canadian grain logistics and transportation system Although the Canadian grain logistics and transportation system operates fairly well there undoubtedly is room for improvement. Table 7 below summarizes these deficiencies. Fig. 2. Components of Canadian logistics system for grain exports Source: The Canadian Handling and Transportation System: Western Canada s logistics and grain transportation system. Quorum Corporation. January, It is estimated that there are about 120, 000 grain producing farms in Canada. See: E.W.Trychniewicz: op.cit. 24 See: Grain Handling and Transportation System Profile. WESTAC, May

8 Tab. 7. Some inefficiencies in Western Canadian grain handling and transportation. Conclusions Space limitations do not allow providing a comprehensive analysis of the present system of Canadian grain exports logistics and transportation. Moreover the present concise review has been prepared for the Polish readers. Canadian readers have access to extremely rich data base from which they can extensively draw information according to their specific needs. An assessment of the existing system of Canadian grain exports logistics and transportation should take into account the following factors: 1. It covers only the outbound (export) movements of grain; consequently the logistics system is relatively straightforward and much less complex compared to goods for which the whole supply chain is considered (e.g. consumer goods that enter the retail system, such as food, clothes or other consumables). 2. Canadian grain industry is strongly regulated. While this regulation has been somewhat alleviated with the elimination of the CWB, it is not totally free of government intervention which affects its economics. 3. There is a strong concentration of grain production in the Prairie Provinces of Alberta, Manitoba and Saskatchewan. Grain shipments cover an average distance of close to 1,500 kms before their reach a port of loading for overseas destinations; Canadian grain is thus strongly transport-intensive compared to other exporting nations, the U.S. included. 4. Canadian grain industry is subject to climatic conditions of Canada. Grow season is short (May to September) and weather changes adversely affect yields. Concentration of shipments over winter months puts a strain on the transport and logistics and with respect to concluded sales contracts (meeting of shipment schedules). 5. There is a need to further privatise grain marketing and transportation. This process is ongoing and the elimination of CWB was the first important but competition in marketing and logistics of Canadian grain movements needs to be strengthened. At present both railways: Canadian Pacific and Canadian National enjoy a quasi-monopoly for these movements. 6. Unlike the U.S. Canadian trucking industry plays a limited role in grain shipments, mostly due to higher taxes and overregulation compared to its American counterparts. Elimination or at least reduction of this disadvantage is a necessary condition to make road transportation competitive against railways. 7. Inland water transport in Canada plays a limited role in grain transport in Canada. Apart from the Great Lakes and the St. Lawrence Seaway little grain moves by this mode of transport

9 BIBLIOGRAPHY 1. An Act to amend Canada Grain Act and the Canada Transportation Act and to provide for other measures. Publication No C30 E. April Agriculture and Agri-Food Canada: Outlook for Principal Field Crops. March Canadian Grain Council Annual Report 2012/ The Canadian Handling and Transportation System: Western Canada s logistics and grain transportation system. Quorum Corporation. January Canadian National: 6. Canadian Wheat Board Act. 7. Cherevyk G.: House of Commons; Standing Committee on Agriculture and Agri-Food. Evidence. 2 nd Session. February 2014, Computed from FAO Statistics various years Grain Handling and Transportation System Profile. WESTAC, May Grain Handling and Transportation System Review.htm 11. Monteiro J.and Robertson G.: Grain Transportation in Canada-Deregulation Trychniewicz E.W.: Grain Handling and Marketing. CDNENCYCLOPEDIA. Last edited-december. 13. U.S. Department of Agriculture: Grain World Markets and Trade. Washington D.C World Watch Institute: Global Grain Production at Record High Despite Extreme Climatic Events. Washington D.C