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A Grain's Industry Requirements for Rail Capacity

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A Grain's Industry Requirements for Rail Capacity PRO CEE J IN S- Twenty-fourth Annual Meeting Theme: "Transportation Management, Policy and Technology" November 2-5, 1983 Marriott Crystal City Hotel Marriott Crystal Gateway Hotel Arlington, VA Volume XXIV • Number 1 1983 gc <rR TRANSPORTATION RESEARCH FORUM 66 The Grain Industry's Requirements for Rail Capacity by A. D. McLeod° ABSTRACT tent was to encourage settlement of the western plains as rapidly as possible. HIS PAPER describes the develop- This would create in-bound traffic of set- T ment and the interrelationship of tlers' effect and supplies. When settle- the railway and the grain handling sys- ment had been completed, there would be tem in Western Canada.' It describes grain and other farm products for the some of the distinctive characteristics railway to haul, and the hinterland econ- and needs of the grain industry relative omy would provide a ready-made market to transportation. It deals with .future for the manufactured products of the requirements in terms of volume of infant, tariff-protected industry in Cen- products to be moved and suggests some tral Canada. A further objective for con- of the areas where change and improve- struction of the transcontinental rail- ment is needed to achieve an effective way was to cut off any potential north- and efficient movement of product from ward penetration of U.S.A. railroads the Prairies to export ports. into the area west of the Great Lakes. When completed, the CPR main line INTRODUCTION would provide an effective barrier close to the 49th parallel of latitude. The CPR For nearly 100 years , the fortunes and the federal government shared in (and misfortunes) of the grain industry these objectives, and they shared the ef- and. the railroads have been tied closely forts to attract settlers from Europe, together. I want to deal first with some U.S.A. and Ontario. of the historical developments and rela- By the year 1900, the Province of tionships, and then move on to discuss Manitoba and the Northwest Territories the present and the future. had a total of 3716 miles of railroad line, and total production of wheat in RAILWAY DEVELOPMENT the west amounted to 136,000 tonnes (or about five million bushels). Railroad development in the 'Prairie During the next few years, railway provinces began with the building of a building and immigration on the prairies line from St. Paul and Chicago to Win- continued at a rapid pace and by 1914 nipeg in 1878. Five.years later, the CPR there were nearly 12,000 miles of rail- line was built north of the Great' Lakes way track in what is now the Prairie to connect Winnipeg with Central Can- Provinces. Between 1900 and the out- ada. In 1882 the construction crews break of World War I, about a million passed through Regina and by 1885, the and a quarter immigrants came to the CPR.transcontinental line was complet- prairies and grain production increased ed to the Pacific coast. Most of the his- accordingly. The wheat crop in 1915 torical records of that period suggest reached nearly 10 million tonnes. the main purpose for constructing that Railroad construction continued at a transcontinental line was to entice Brit- slower pace during the next ten years ish. Columbia to join with Upper and or so, but accelerated again during the Lower Canada and the Atlantic prov- period 1926-30. At the end of that time, inces to form a new Canadian nation the total rail network in the prairies had "stretching from sea to sea." While that been virtually completed. The table be- was certainly a primary objective, there low shows the growth in railway mile- reasons were other supporting comple- age and in rural population in Saskatch- tion of the line. There was a need to ewan from the turn of the century to generate traffic to cover the costs of 1936. I think the trends in the provinces constructing and operating a line which Manitoba and Alberta would be sim- unpopulated of ran through the rock and ilar. bush land north of Lake Superior and then across the empty prairies and Railway Rural through the Rocky Mountains. The in- Year Mileage Population *R esearch Director, Saskatchewan 1901* 962 77,013 Wheat Pool, Regina, Saskatchewan, 1906 1,951 209,301 Canada. 1911 3,121 361,037 RAIL CAPACITY GRAIN REQUIREMENTS 67 1916 5,378 471,538 ELEVATOR SYSTEM • f, 1921 6,296 538,552 DEVELOPMENT 1926 7,267 578,206 1931 2,268 630,880 As a result of encouragement by th6 ele- 1926 8.624 (350,522 railroads, construction of primary vators •and fiat warehouses for grain fc:M iwny milenge is for 1900, population is took place at a rapid rate prior to the turn of the century. By /901 there were. about 400 elevators and nearly 100 flat At the time when railroad building in warehouses on the prairies, with total 1,\.'estern7 Canada was most active. the capacity for about 325,000 tonnes (13 (1=5ectional emphasis was all toward the million bushels). east. Supplies and manufactured goods Even more rapid growth occurred in came almost entirely from Central Can- the ensuing period and by 1924 the nurn- ada. Markets for Canadian grain were ber of elevators had reached 4,203. Be- Primarily in Europe. The construction cause grain delivery was made by team ;ictivity itself moved generally from east and wagon, elevators- were. located at to west and spread out in a fan-shape intervals of only a few miles on track, from the main lines of the CPR, the Ca- and were quite small in terms: of today's nadian Northern and the Grand Trunk standards. 'About 1933, the number cif Pacific railways. For these reasons, it is elevators reached its peak at '5,746. Ele not enterprising that the rail network in vator. numbers have declined •very sub- the Prairie province is shaped somewhat stantially.since that time, but total stor- ,nke a funnel with its narrow rend at age capacity has •increased Until fairly Winnipeg. At the time, this accommo- recently. The table below 'Shows change d9ted a natural directional flow for the in numbers 'of elevators and in total cal distribution of goods coming into the pacity to the present, time. Prairie area and, in reverse, for the as- sembly destined for Thunder of grains CAPACITY OF IlaY, or livestock &stifled, for Wiflfli- NUMBER ,AND Peg. COUNTRY GRAIN ELEVATORS— WESTERN CANADA • bIRECTIONAL SHIFT Number of Total Capacity Year Elevators 'tOnnes) With the passage of time there has been a significant shift in much of that 1914 2,746 rail traffic. In the last 20-25 years, coun- 1924 4,203 3.5 1933 5,746 • . 4.8 •;': tries in the Pacific Rim have become • , very important markets for . Canadian 1943 5,537 - 4.8 • grain as well as for coal, potash, sul- 1953 5,324 8.0 Phur and other products. New handling 1963 5,178 9.1 facilities have been constructed at Van- 1973 4,383 9.2 ;‘.. couver and Prince Rupert to accommo- 1982 2,934 .1 • 8,1t. date the increased volume of these com- Inodities. When one considers total ELEVATOR SYSTEM morement of grain from the prairies to CONSOLIDATION ,••••• • both export and domestic destinations, approximately 45 per cent now moves There is a widespread misconception through Pacific Coast ports and the re- in some parts, of..Canada that the pri- maining 55 per cent through Thunder mary grain handling system has not Bay and Churchill. changed since the days'' of thd horse: Population growth and industrial de- drawn wagon, that the elevator system velopment in the future are expected to is inefficient and ready, to, collapse. This increase still further the importance of is not borne out by the faets.. Pacific Rim markets for Canadian grain, The most rapid .consolidation ,of fbe and a new grain terminal is under con- elevator system has taken place 'since struction at Prince Rupert to % accommo- about 1971. Older and low-volume elei date this volume. It would lye natural vators are being closed. New ,elevators for grain from Alberta and most of Sas- are less numerous but they .are larger, katchewan to move westward in future have faster handling equiPment and to fill this expanding market but, in space to spot larger numbers of rail some cases, the funnel shape of the rail cars. Some recent experimentation has network does not readily accommodate produced entirely new. designs "which this directional flow. A nunther of fair- have the potential for even faster load- ly substantial back-hauls,, are involved ing operation. , -.. • before the grain reaches a main line The 'following tables show the extent west-bound. of change which Ias-oectirred in the ele- TRANSPORTATION RESEARCH FORUM vatei . system in Western Canada in the grain. The MacPherson Commission, last ten years. which reported in 1961, introduced the There is every indication that num- idea of a subsidy to the railway com- bers of. elevators will continue to de- panies for continued operation of lines cline in an evolutionary fashion. A ma- which did not cover their costs from jor study carried out in 1078-70 by freight revenues. The subsidy, began 13007:-Allen, Hamilton and the Mt later as a general lump sum payment Grop, estimated there would about but was then changed to specific reim- 2,600 elevators in use by 1985. It is ex- bursement for costs on each line tha pected. that grain volume vill continue was determined by the CanadianTrans- to increase, so total storage capacity port Commission to be uneconomic, bth, may remain constant or may increaee.
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