Why Canada’s busiest port won’t load grain in the rain
Grain sits in silos, trains idle on tracks and ships off the coast all because of a long-running dispute
Something happened on the British Columbia coast late last month that was so serious it sent shockwaves through the entire Canadian food system. It forced more than a dozen freight trains to stop across the Prairies, each one loaded with hundreds of tonnes of newly harvested wheat, barley and canola destined for world markets in the midst of a food inflation crisis. Grain elevators filled up with crops. Bulk cargo ships waited at docks or anchored off the coast, adding another big, belching eyesore to the ocean views from Salt Spring Island, grinding away whatever patience is left among homeowners there.
It rained in Vancouver.
It wasn’t the first time either. Grain exporters, railways and shipping companies say Canada’s busiest port essentially stops loading grain ships whenever it rains in Vancouver. That happens on average about 165 days a year, killing productivity and heaping extra fees and late penalties onto grain exporters, which, in turn, work their way backward through the supply chain and shave money off every bushel of grain that a Canadian farmer tries to sell.
Pretty much everybody else in the world loads in the rain
John Heimbecker, chief executive at Winnipeg-based Parrish and Heimbecker Ltd.
The problem has become so frustrating that major industry leaders have begun speaking out. Canadian Pacific Railway Ltd. publicly called on the federal government to intervene. And Tracy Robinson, chief executive of Canadian National Railway Co., lamented that our supply chain could be undone by “rain in one of Canada’s rainiest regions,” in a commentary in the Financial Post on Nov. 4.
“Pretty much everybody else in the world loads in the rain,” said John Heimbecker, chief executive at Winnipeg-based Parrish and Heimbecker Ltd., the country’s largest flour miller and one of its top grain exporters. “So you’d be thinking that between everybody, we could clean that up.”
Yet they’re still trying after at least 15 years. Grain companies and stevedoring firms that operate at the port have spent millions on training and equipment to safely load grain ships in inclement weather. Most grain terminals still don’t do it.
“In the end, you just don’t load,” Heimbecker said. “We’ve been talking about this for a long, long time and nothing ever seems to get done.”
The back story
There is a long and a short answer for how we got here. The short answer is grain can’t get wet. It sits in the holds of massive cargo ships for weeks at a time, en route to Asia, Africa or Europe, and it rots at sea if it is wet when it starts the voyage.
On clear days, the ship opens its hatches and a port’s grain terminal shoots the grain directly into the yawning cargo holds. On rainy days, stevedores drape tarps over the holds to keep the grain dry, at least they did until 2005, when Transport Canada inspectors determined it was unsafe.
Rain pooled on the tarps and the stevedores had to climb onto the hatch covers to pull off the tarps without spilling water onto the cargo. In doing so, they risked slipping on wet metal and falling 10 to 20 feet into the ship’s hold.
After three years of legal wrangling, a federal court judge ultimately agreed with the inspectors on the dangers of tarps in 2008, prompting the Transport Ministry to fund research into safe ways to load grain in the rain.
Now, the long answer. Since that time, the union representing B.C. port workers has been going back and forth with its members trying in vain to find a solution that pleases both sides.
The alternative to tarps is something called a feeder hole. Stevedores insert a pipe into what looks like a manhole in the ship’s hatch cover, and feed grain into the hold through the pipe. It’s slower than shooting grain directly into the open hold, but it keeps the rain off the cargo.
It also requires stevedores to be on top of the hatch cover, running the same risk of falling as the previous method. International Longshore and Warehouse Union Canada (ILWU) members have repeatedly refused to work with feeder holes without some sort of apparatus to protect them from slipping and falling off the hatch cover.
The B.C. Maritime Employers Association (BCMEA), which represents shipping companies, stevedoring firms and terminal operators, argued the method was safe, because stevedores first set up pylons and tape on the hatch cover to cordon off a danger zone two metres away from the edge.
But in 2018, an industry arbitrator called in to settle the long-running dispute between the union and BCMEA, decided that wasn’t enough.
“A worker could trip and stumble on a nob, cleat or a cone and slip, slide or fall through the warning line; or get entangled in tape and fall over the edge,” arbitrator Kate Young said in a 99-page report, adding she heard evidence of four “major incidents” where workers fell off a hatch cover in the early 2000s.
She sided with the union, ruling that employers need to set up guardrails to protect stevedores from falling off the hatch covers while loading grain in the rain. Employers protested, saying the guardrails take too long to set up. The arbitrator, however, found it takes less than half an hour to set them up, and about the same time to tear them down.
‘It doesn’t actually work’
Casey McCawley ran West Coast operations for Parrish & Heimbecker until he retired last month. The grain company operates two terminals that load grain onto ships around Vancouver. He has watched the fight over loading unfold first hand. At first glance, he said, Young’s report seems reasonable.
“You look at it, you go, ‘OK, that sounds pretty good,’” he said. “Just put up a big safety fence on the hold. That seems right. That seems OK. Seems safe. The problem is: it actually doesn’t work.”
It takes a crane and extra staff to get the guardrails onto the ship when it’s raining, he said. The setup can take two to three hours, plus another two to three hours to take down, and after all that effort, you’re only loading at 60 per cent speed through the feeder holes.
“Nine times out of 10, you’re better off not setting up the fence,” he said. “You just wait ’til the rain stops and pour like hell.”
If you’re lucky, the weather breaks quickly and the terminal can catch up. In Vancouver, however, the rain can drag on for days at a time, especially during the rainy season between November and January, which happens to line up almost exactly with Canada’s peak grain exporting period.
Vancouver gets at least some rain — greater than 0.2 millimetres — 165 days a year on average, judging from readings taken between 1981 and 2010, Yimei Li, a meteorologist at Environment and Climate Change Canada said. The city gets five millimetres or more of rain on about 75 days every year, and it gets 10 millimetres or more on 41 days.
McCawley and Heimbecker, the CEO of P&H, estimated their B.C. terminals lose a total of 30 to 40 days of productivity per year on account of bad weather.
It doesn’t have to be this way, McCawley said. Other ports in the area, including Portland, manage to load grain in wet weather, something Kama Simonds, a spokesperson with the Port of Portland, confirmed via email.
“We all are concerned about safety. We want our employees to be safe,” McCawley said. “It’s not really a safety issue. We can use technology to load through feeder holes and ensure there are no men on top of the hatch covers.”
The BCMEA said the industry has invested “millions of dollars in training and equipment” to safely load through feeder holes, but some grain terminals still choose “not to based on their own operational and infrastructure considerations,” according to a statement from spokesperson Rob MacKay-Dunn.
To show how serious the weather shutdowns in Vancouver can be, the head of CN Rail’s grain business picked one week in late October as an example. That week, it rained almost every day in Vancouver, backing up grain terminals at the port to the point where CN couldn’t send any more trains, because the terminals couldn’t accept any more grain.
“We had 18 trains loaded that were either sitting at the origin or along the route, tied down,” David Przednowek, assistant vice-president for grain at CN, said. “Let’s call that 1,800-plus cars. It’s a big chunk of our fleet.”
It’s about 15 per cent of CN’s pool of grain hopper cars, which each carry about 100 tonnes on average.
“It doesn’t sound like much, but when they’re all sitting there and you can’t turn them and get them back to the country empty, it has an impact,” he said. “This is a serious issue. And it’s been an issue like this for a long time.”
The railways this year have been under immense pressure to move a bumper grain harvest — estimated to be about 75.2 million tonnes — from the Prairies to the Pacific coast.
This year’s harvest has become one of the most crucial crops this country has produced in recent memory, as food inflation reaches punishing levels and food security concerns arise around the world. Russia’s invasion of Ukraine destabilized an important global breadbasket and sent shocks through wheat markets, adding more pressure on Canada’s railways to get grain to port as quickly as possible.
The railways have struggled at times to keep up. The Ag Transport Coalition, run by a collection of farm lobby groups, found CN and CP filled about 86 per cent of all grain cars ordered in the final week of October, up from 71 per cent the previous week.
Robinson, CN’s CEO, said the rain rules in Vancouver were to blame.
“Rain happens in Vancouver, in fact, it happens often,” she said in her commentary. “If the grain terminals are full, then those same trains carrying record amounts of grain in the new, specialized, high-capacity cars CN has purchased, have to sit and wait at the doors of the nation’s busiest port.”
CP Rail is facing a similar issue, with its latest supply chain scorecard report showing that 10 loaded grain trains were tied up and unable to enter port terminals as of last week.
CP Rail’s annual winter plan, which outlines how the railway plans to cope with inclement weather, took aim at the stevedore union in B.C. for causing “cascading ripple effects through the entire supply chain.” The union, ILWU, did not respond to multiple requests for comment.
“Each year, there are extended periods of time when shipping capacity on Canada’s West Coast through the Port of Vancouver is lost because unionized workforces prefer to wait for inclement weather to pass before loading grain vessels, even though solutions exist to permit safe loading, which have been used in the past,” CP Rail said in its report.
It went on to urge the federal government to “play a constructive role” in finding a solution.
Transport Minister Omar Alghabra’s office, however, said in a statement that it’s possible to load in Vancouver in bad weather “provided that necessary safety standards and protocols” are followed. It directed further questions to the port and the stevedore employers.
The view from the water
Peter Amat, the general manager of Pacific Basin Shipping (Canada) Ltd., a bulk shipping company that runs about 250 ships, said the rain delays in Vancouver are unlike anywhere else in the world. Sure, his ships get held up sometimes elsewhere, but you can still load through feeder holes and the rain just doesn’t come as often, or last as long, as it does in Vancouver.
“There has to be a better way to do it,” he said. “It’s not unusual for ships to come here and wait 25 to 30 days to get onto the berth.”
His company now adds a charge — about US$2 to US$3 per tonne this year — to all the grain cargo it loads at the port, to account for weather delays. While they wait to get into the port, they’re lingering off the coast, disturbing residents on the nearby islands.
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Think of those ships crowding around the coast as spots on the skin of a measles patient, said Trevor Heaver, an emeritus professor specializing in shipping and logistics at the University of British Columbia. As with measles, the spots aren’t the problem.
“They’re the vestige of it,” he said. They hint at what’s really going on somewhere else.
In the case of the port, the root of the problem isn’t on the water at all. It’s in a thicket of geopolitical issues, and a pandemic that drove a spike in consumer demand for hard goods, and labour shortages, and trucking backlogs.
“It’s a whole sequence of things,” Heaver said.
One of those things, evidently, is coming from the sky, though not until next week, according to the forecasts.
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