Misson Terminal and the CWB

[Fransisco]

http://www.tbnewswatch.com/news/115725/Unfair-treatment

<b>Unfair treatment?</b>

By Jodi Lundmark, tbnewswatch.com

A local union president says he’s been wondering why one grain handling company is receiving more of the city’s grain than any of the other six elevators on Thunder Bay’s waterfront.

While there wasn’t a single railcar at the Viterra C elevator Thursday morning, there was a lineup of cars at the Mission Terminal.

United Steelworkers Local 650 (Thunder Bay Grain Handlers) president Tom Hamilton said Mission Terminal is the only elevator that operates a full two-shift rotation and seems to be guaranteed a fixed number of cars rather than a percentage. He said that means, as an example, that if Mission Terminal has a guarantee of 300 cars and 500 come through the city, then the other six are left to split the remaining 200.

And while Mission Terminal has 50 full-time employees, Viterra (where Hamilton works) has nine employees; 25 per cent of whom only work four months or less a year.

"We’re not sure where the problem is but we suspect there is some kind of allocation problem with the (Canadian) Wheat Board," Hamilton said. "We’re not sure if there’s blame to be assessed anywhere; we’re just interested in find out – and we think Thunder Bay should be interested in finding out – how this grain allocation is done."

Hamilton said when they ask questions, they don’t get clear answers.

Sixty per cent of the grain that comes through Thunder Bay is from the CWB and Hamilton said they suspect the Wheat Board is purposely directing to Mission Terminal and they’re wondering if there are any opportunities for competition in the city.

"We want to know how this is happening and should we have this monopoly or is it the monopoly situation that’s causing the problem," said Hamilton. "Is it something our own companies aren’t doing? We don’t know. They tell us they’re like hell to get as much grain as they possibly can through here and they’re not able to do it because the wheat board is directing it some place else, so how does this process actually work?

Canadian Wheat Board spokesman John Lyons said the board’s main goal is to get the best deal for the farmer, and thus they will be looking for the lowest prices. Lyons added that the CWB is open to business to any company that wants to talk prices.

"Our goal is to get the best deal for farmers and that means getting the lowest price," he said. "We see everyone’s prices on a daily basis and we go where the value is most attractive for farmers because that’s what we are driven by."

Lyons said the CWB could not talk about the specific claims Hamilton had made because they are part of a commercial and confidential agreement.

Mission Terminal, the only non-unionized grain handler in the city – has been operating for 10 years now and terminal services manager Paul Kennedy said they don’t receive preferential treatment from the CWB.

Kennedy also said he could not discuss the details of the commercial agreement, echoing Lyons statements about confidentiality. He added that Mission Terminal has built its business on competitive pricing and excellent customer service.

"I think that’s how anybody builds a business," he said. "We get treated the way our service and our pricing warrants we get treated."

[Fransisco]

Not mentioned in the article is that former CEO of the CWB, our old friend Adrian Meisner, is now in charge of Mission Terminal.

Is it perhaps possible that the CWB is doing whats best for Meisner instead of whats best for farmers?

[parsley]

From the voices in my head, comes a liturgy of words that must be nonsensical, aren't they, fransisco, because when I put the vision together...well, I musn't think negatively.

Unions
Lobbyists
Elevator workers
Friends of the Board
CWB Election funding
Liberal funding
Iggie funding
Back Scratching
Goodale
Measner
demmurage
strikes
pigs at the trough
monopoly

My rationale has lost its' compass, surely, with all these random words puking out of my imagination.
Pars

[ado089]

Or is perhaps that operating one terminal at peak capacity is more cost efficient than running six at 20% capacity in order to keep some union lackies working. Or maybe it's because the service, reliablilty and cost is better where the unions aren't inflating costs and excelling at mediocraty?

[newguy]

Could it be because last year more producer cars were sent by farmers and I know all my cars go to Mission. I am not one that usually sticks up for CWB either.

[Fransisco]

That's possible ado089 but lets take a look at this.


"And while Mission Terminal has 50 full-time employees, Viterra (where Hamilton works) has nine employees; 25 per cent of whom only work four months or less a year."

Whats the capacity at mission vs the others?

http://www.grainscanada.gc.ca/statistics-statistiques/geic-sgc/geich-hsgc-eng.htm

Mission is 121,000 tonnes compared to 362,000 and 231,000 at Viterra’s two terminals.

The article isn't too clear on this but lets assume the nine unionized guys working for Viterra are all working at just one of the two viterra terminals, the small one. It has pretty much twice the capacity and 20% of the labour requirement of mission. It's looking like for once the union shop is way more efficient than the non union one.

[Fransisco]

I don't know about the producer cars but industry scuttlebutt has it that close to half of grain that goes through Thunder Bay goes through mission terminal. I guess the other six get the left overs.

[Fransisco]

Oops, I meant half the CWB grain not half of all grain.

[ado089]

Storage capacity has nothing to do with handling capacity. If Mission is ,and sounds like they do turn over that facility at higher rate they are making better use of their assets, therfore operating on a lower cost basis per tonne. From the information in the article it appears that there are 4 or maybe even 5 more terminals operating than need be. As far as staffing goes what would be the employee requirments from the other facilities if they were operating at full capacity instead of 8%? (based on the other 5 facilities splitting the other 40% of the cars)

Besides that why are we even sending grain through Thunder Bay and handling twice as much when we could be sending it to Churchill and handling once considering the growing number of ice free days there now?

[jdepape]

ado089:

Of course it is more efficient to run one terminal at full capacity than all of them at much less - but the other terminal operators don't have a choice in the matter, nor do they benefit from the efficiency gains.

Inflated costs? All terminals operate on the basis of tariffs - all the terminals in Thunder Bay are within pennies of each other around $9.50/t to handle wheat. Mission has an arrangement where it pays back to the CWB a portion of its elevation - it's called a diversion fee. Could the other terminals do the same? Absolutely.

Since you are making assumptions, try this one. If you were operating a terminal in Thunder Bay and saw close to half the CWB's business going to one competitor, what would you do about it? I assume the other terminals have approached the CWB and said, "what will it take to get some of your business?"

Assuming that has taken place and the CWB has not acted, tells me that there may be something else going on here.

Incentives work. I wonder what "incentives" are driving the CWB's behaviour. If it was simply a matter of getting the best deals for farmers, the CWB would have used its leverage over the terminals and gotten an even better deal from one or more other terminals; having two or more terminals hustling for your grain would be better than just one. That would be the rational thing to do - so why hasn't it happened?

Think about this as well.

The business from the CWB is so good, Mission has applied (and received) government funding to expand. Expansion is ridiculous when you think that Thunder Bay already has way more capacity than needed. Has the CWB advised Mission to expect even more grain from them? why would the CWB push an agenda that is counter to system efficiency? What agenda would keep them from using the other terminals as they do Mission?

If this was just about negotiating the best deal for farmers, the CWB would use the capacity that is already there.

There's something else going on and I fear its not commercially driven and therefore not in the best interests of farmers.

Somebody - please prove me wrong.