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See Intermodal, Think Grain

See Intermodal? Think Grain.

Intermodal moves a whole host of products from overseas to end-users across North America - and a lot of those same boxes get turned around, are re-loaded with product, and are shipped back out to customers overseas.

In the 2017-18 crop year, CN moved over 1 million metric tonnes of grain and processed grain products in containers from CN intermodal yards in the Prairies. That represented the equivalent of over 11,000 hopper cars. Saskatoon is CN’s main hub for grain in containers in western Canada, but CN also makes good use of this model in other locations across the CN network.

See Intermodal, Think Grain
See Intermodal, Think Grain

Intermodal represents a real and significant opportunity to ship grain from western Canada to domestic and international customers, and tap into the incremental capacity for shipping grain, especially when hopper car capacity for the movement of grain is tapped out. The container represents an opportunity right down to an individual farmer on the ground growing grain to connect directly with an end-user overseas. It’s not just a thought – it’s reality.

See Intermodal, Think Grain

The Grain Train

Grain and processed grain products fit really well with intermodal in the CN supply chain, and CN has been a leader in being creative with customers small and large to come up with different ways to tap into the shipping container to move more grain.

For the longest time, grain moved to port by hopper car to a container stuffing facility to be transferred to 20-foot containers. Those containers were moved by truck to a container yard, loaded onto a container ship, and moved by truck from the container yard at the other end to final destination. Generally speaking, one hopper car moves enough product to fill over three-and-a-half 20 foot containers.

Evolving the Supply Chain

The grain supply chain has evolved a lot. In recent years, source loading has become much more prevalent in western Canada. Reduced handling and the need for identity-preserved products are fueling the demand to load containers with an export seal directly from processing plants in western Canada and shipped to final destination – no hopper car involved in the supply chain whatsoever. Source loading is a way of tapping into unused supply chain capacity to move more grain. Simply put, empty containers moving back to the coast can more efficiently use train capacity if they are carrying product.

Instead of a train moving empty containers back to a port, containers are dropped off at a CN yard, and CN works closely with steamship line partners to coordinate this activity. Containers are trucked out to a facility in the country where they are loaded with product, hauled back to the yard, and put on another train. Larger 40 or 53-foot containers can be loaded in the country and moved to port where they are unloaded and returned to steamship lines for the 40-foot boxes and to the railways for the 53-foot boxes. The grain is subsequently re-loaded into a 20-foot container. This is called a domestic re-positioning program move (DRP).

 The Traditional Supply Chain
 The Containerized Supply Chain

CN InterMobile

A new intermodal terminal is opening on the CN network in the new year. InterMobil Terminal, which is located in Regina, represents an opportunity for shippers in southern Saskatchewan to tap into CN’s intermodal capacity for the movement of source-loaded grain.

The Benefits

Why would a customer source grain via container instead of bulk vessel?

Part of choosing to ship grain via container has to do with scale – the inventory requirements of a small end-user processing facility are not the same as a large one, and small bulk shipments fit the bill. Inventory financing considerations can come into play too.

And then there’s the processed versus raw product. Some product, mainly pulses, is shipped from western Canada is processed before it even finds its way into a container. That might involve cleaning, splitting, and bagging. This is table-ready product.

Being able to secure grain shipping capacity is also a consideration. If bulk hopper car supply is sold out, there are hundreds of thousands of empty containers moving through the Prairies back to the Canadian ports that can be utilized to ship grain.

Market dynamics of bulk versus container freight rates also come into play as well. Back in the mid-2000s when bulk vessel freight rates took off, it was cheaper to ship grain to destination by container, and that suited receivers who could receive grain by container or by bulk.

The Supply Chain

How else has this part of the grain supply chain evolved in recent years?

Stuffing facilities located at port have been of smaller scale. That has presented a barrier in terms of shippers being able to take full advantage of the better freight rate economics of shipping grain in larger blocks. That can also present competitive challenges when a small shipper using a single-car rate is trying to compete for grain with the unit train shipper down the road.

See Intermodal, Think Grain

That’s all changing too. Much like the investments taking place on a grand scale in Vancouver in terms of grain terminal expansion, shippers are also expanding the railcar receiving capacity of container stuffing facilities. Last fall, Ray-Mont Logistics opened a trans-load facility in Prince Rupert capable of receiving unit train-sized shipments of grain and grain products for container stuffing. The canola crush industry in western Canada has really taken advantage of this new supply chain model. Can-Est Transit, which is located in the Port of Montreal, has 68,000 MT of storage and can load 8 containers per hour. Columbia Containers, which is on the South Shore of Vancouver, also recently underwent an expansion project.

Source-loaded intermodal supply chain in the Prairies made easy

Source loading containers in the Prairies is easy and offers a quick sales execution. Shippers secure a sales contract with a foreign buyer who specifies the terms of the sales (e.g. source loading the product at origin with no extra handling). The shipper gets a booking number from the steamship line with a cut-off date and a sailing date. This booking number is used to pick up a container at one of CN’s intermodal yards.

Once the container is loaded with export product and sealed with an export seal, the shipper requests a reservation number from CN for delivery of the loaded container bound for export in our yards. Documentations, including seal and container numbers, are sent to the foreign buyer. The entire sale cycle could take less than seven days from the time the sales contract was signed to time the documents are sent.

For grain shipments in containers, please contact Chipalo Simunyola  at 204-934-7357 or email Western Sales Team