10 TH ANNUAL FIELDS ON WHEELS CONFERENCE THE GRAIN SUPPLY CHAIN: 10 YEARS BACK AND 10 YEARS FORWARD NOVEMBER 22, 2005 CONFERENCE SPONSORS: Manitoba Dept. of Transportation & Government Services Presented by: Manitoba Rural Adaptation Council (MRAC) Western Economic Diversification Canada Transport Institute Agricore-United Aikins, MacAulay & Thorvaldson The Railway Association of Canada WESTAC Canadian Wheat Board Port of Montreal Canadian Grain Commission The 10th Annual Fields on Wheels Conference The Grain Supply Chain 10 Years Back, and 10 Years Forward PROCEEDINGS Held in Winnipeg, MB November 22, 2005 Edited By: Douglas B. Duncan Sharon Cohen ISBN Number 1‐894218‐40‐X Transport Institute, University of Manitoba www.umti.ca i Table of Contents Table of Contents............................................................................................................ ii Welcome............................................................................................................................ 1 Session 1............................................................................................................................ 2 World Marine Shipping and Trends in European Transport Mr. Gordon Braun........................................................................................................... 2 Session 2.......................................................................................................................... 22 Bulk Handling ‐ Atlantic and Pacific Corridors Mr. Dan Stirling ............................................................................................................ 22 Trends in Grain Transportation Mr. Adrian Measner ..................................................................................................... 31 Canadian Logistics Skills Committee Announcement Ms. Frances Humphreys .............................................................................................. 45 Session 3.......................................................................................................................... 47 Containerized Shipping ‐ Atlantic and Pacific Corridors Mr. Stephen Paul........................................................................................................... 47 Mr. Don Krusel.............................................................................................................. 55 Luncheon ........................................................................................................................ 67 Dr. Glenn Feltham ........................................................................................................ 67 The Honourable Ron Lemieux ................................................................................... 68 Dr. Joanne Keselman.................................................................................................... 72 Luncheon Keynote Speaker Mr. Arthur Kroeger....................................................................................................... 73 Session 4.......................................................................................................................... 83 Bulk Handling ‐ Mid Continent Corridor Paul Larson..................................................................................................................... 84 CNʹs Perspective: Bulk Handling ‐ Mid Continent Corridor Mr. Wayne Atamanchuk.............................................................................................. 91 Session 5........................................................................................................................ 108 Yesterday, Today and Tomorrow Mr. Brent Van Koughnet ........................................................................................... 109 ii Mr. Gordon Braun....................................................................................................... 122 Mr. Owen McAuley.................................................................................................... 131 Rapporteur.................................................................................................................... 142 Mr. Blair Rutter............................................................................................................ 142 PRESENTER PROFILES............................................................................................ 147 PARTICIPANTS ......................................................................................................... 155 AGENDA……………………………………………………………………………...159 SPONSORS…………………………………………………………………………...164 iii The Grain Supply Chain 10 Years Back, and 10 Years Forward Welcome Paul Larson, Director Transport Institute Morning Chairperson Good Morning everyone and welcome to the 10th Annual Fields on Wheels Conference. We are delighted that you all joined us. I am Paul Larson, Director of the Transport Institute as of July this year. We have an action packed agenda for you leading off with Mr. Gordon Braun from the United Kingdom. Before we begin, I want to thank some of our sponsors. The continental breakfast that we have all just enjoyed was sponsored by the Port of Montreal; the morning coffee break to come is put on by Aikins, MacAulay & Thorvaldson. Our lunch sponsor is Agricore United and our afternoon coffee break sponsor is the Railway Association of Canada. We also have a number of general conference sponsors, the Manitoba Department of Transportation and Government Services, the Manitoba Rural Adaptation Council or MRAC, the Canadian Wheat Board, Western Economic Diversification Canada and the Canadian Grain Commission. Finally we have some sponsors in kind including the Canadian Wheat Board, the Vancouver Port Authority, the Hotel Fort Garry where we are at and Westac. It is now my pleasure to introduce to you Mr. Gordon Braun. 1 Session 1 World Marine Shipping and Trends in European Transport Mr. Gordon Braun UK Director, Ferryways Thank you very much Paul. I would also like to thank the organizers of the Conference for inviting me to speak here. I have been away for many, many years and it is a real privilege to come back here. I think when I joined the shipping industry in 1971 coming from Manitoba and ending up in the biggest port in the world was a bit of a shock. I told everybody there that the biggest thing I had seen was a canoe. However, it was quite appropriate at the time because I spent 30 years in the container side of the deep‐ sea business and CP ships at the time had just ordered new container vessels. These container vessels were quite large at 700 TEU’s. Last week AP Miller, the Danish company, announced that they were contemplating building 15,000 TEU ships. In terms of a ship’s size, perhaps you could cope with it. I think the challenges come when you start talking about the entire infrastructure which needs to be established and built to cater to these kinds of vessels. They are extremely large. You have to ensure that the ports have the necessary draft to deal with the ships and then you simply have to think about what happens when a ship actually dumps 15,000 containers onto the quay. What happens to your inland infrastructure? It is a real challenge. Part 1: The Evolution of Worldwide Sea Born Dry Bulk Trades and the Demand Drivers for Dry Bulk Vessels. The theme that is going to be developed in this presentation is really the importance of managing the entire logistics chain. Coming from the container business and door to door transportation created a considerable amount of enthusiasm with me to look at this particular topic. This is because the transportation of wheat in Canada is a very split up logistics chain because of its 2 geographic position. However, dry bulk vessels are one of the vessel types that carry your grain to worldwide markets. Now I thought it was appropriate to start with this little article which I found in The Economist which says: “If trade is the lifeblood of the world economy, then ships that perform the mundane task of transporting goods and raw materials from where they are produced to where they are wanted are the red corpuscles. “ Quite an appropriate statement, because I think for many people what happens out in the ocean is not all that important. It is not highlighted in most cases and it is not very topical. The article goes on and highlights a number of rather interesting things. In 2004 the world’s fleets carried 90% of total goods, world goods worth about 8.9 trillion dollars. That is an unbelievable amount. In the next point, China has been highlighted because one of the things that I was privileged to do in preparing this presentation was to talk to one of the major ship brokers in the world, Clarkson’s in London. I raised a number of queries on the transport of grain internationally, and the changes and the demand for vessels, the effective prices and the underlying reasons behind that and to everything, he answered China. China, China, China. And so I thought it would be appropriate to just highlight it here because it comes up in quite a few of the points that are in the presentation. Now this fast growing world trade is driven really by China, because the North Atlantic is a fairly mundane trade, doesn’t do a great deal. A lot of the trades are not all that great in terms of growth, but China’s growth has been huge, and that has driven the demand for ships, that has driven up prices, and that has resulted in shipping companies in 2004 earning profits of around 80 billion dollars.