- Manitoba grain producers have been hit yet again by flooding in British Columbia.
- Due to the limited crop this year, there is some room to store grain in the short term and capacity on the trains.
Floods in British Columbia have thrown another blow to Manitoba grain producers, who are already dealing with a limited crop due to a severe drought earlier this year.
“We haven’t seen anything like this in terms of natural disasters affecting rail logistics,” said Wade Sobkowich, the Western Grain Elevator Association executive director.
Because there are few passes through the mountains in B.C., the grain transportation system is susceptible. Both the Canadian National and Canadian Pacific trains have been cut off due to flooding.
According to Sobkowich, there are approximately 100,000 tonnes of grain resting in rail cars that cannot get through.
“This is without a doubt the most important and, most likely, the most costly natural disaster in our collective experience,” he said.
According to Barry Prentice, a professor of supply chain management at the University of Manitoba, this is peak shipping season for farmers whose grain generally travels by rail via the Fraser Valley in British Columbia to the port of Vancouver.
“Because the crop is already short, grain handlers will be severely impacted. Farmers are getting decent rates, so they may not be concerned, but I believe the handling system will be a major source of pain.”
On Tuesday, the Port of Vancouver stated that all rail traffic into and out of the port had been halted and that a schedule for restarting the rail lines would be determined once damage assessments were completed.
Due to the limited crop this year, there is some room to store grain in the short term and capacity on the trains. Elevators are almost 75% full, according to Sobkowich, after farmers harvested about 48 million tonnes of grain this year, compared to 70-75 million tonnes in a typical year.
If the pause lasts more than a week, the storage capacity will be exhausted, he warned.
Farmers may face penalties if grain ships are detained in Vancouver awaiting delivery.
Consumers may not feel the pinch just yet.
According to Prentice, consumers in Manitoba may not see the effects of the delay in product delivery, at least not right away, though insurance prices may rise in the future.
The owner of the Food Fare grocery chain in Winnipeg,
Munther Zeid says it’s too early to predict whether the floods in B.C. would cause supply shortages.
“Things appear to be very much still running,” he said in an interview with Faith Fundal on CBC Manitoba’s Up to Gear radio show on Wednesday afternoon.
“Some things may be disrupted for a week or two, at most. So they’re putting forth a lot of effort to make sure that doesn’t happen.”
According to Prentice, transportation system disruptions are particularly costly to supply chain workers because if an opportunity is missed, those costs cannot be recovered.
“He can’t get his money back because he’s been stuck for four days. You can’t hoard transportation since it’s such a perishable commodity, “he stated.
The flooding follows transportation disruptions caused by significant wildfires in British Columbia earlier this year. As a result, farmers and transportation businesses may begin to explore markets to the east, such as Thunder Bay, or to the south, such as the United States, which would be less vulnerable, according to Sobkowich.
Source: CBC News
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