Post on 20-May-2020
Transportation Update
David PrzednowekSenior Manager, Ocean Freight and Terminal Operations
January 16, 2009
2
Agenda
• CWB Supply Chain
• 2008/09 so far…
• Ocean Freight Market Review
3
Prairie to Port
900 miles
1275 miles
1100 miles
2100 miles
900 miles
US Gulf
U.S./MexicoMills
4
ChurchillChurchillPrince RupertPrince Rupert
VancouverVancouver St. LawrenceSt. LawrenceThunder BayThunder Bay
Supply Chain Funnel
110 000
670 000
175 000
870 0001 305 000
On Farm Storage: 50 MTExports: 31 MTCommercial Inland Storage: 4.5 MT
5
Canadian Grain Export Pattern 1977/78 – 2007/08
0
5
10
15
20
25
77/78
79/80
81/82
83/84
85/86
87/88
89/90
91/92
93/94
95/96
97/98
99/00
01/02
03/04
05/06
mill
ion
tonn
es
East West
6
CP Mountain SubAvalanche on CP Line
7
East Coast Logistics
8
9
Welland Canal
10
11
12
13
14
Impact of Freight Costs on Grain Marketing2008/09 so far…
15
W. Canadian Crop 2008
(MMT) 07/08 08/09 Change
Wheat 18.4 25.5 (+39%)Spring 13.4 18.0 (+34%)Winter 1.3 2.0 (+54%)Durum 3.7 5.5 (+50%)
Barley 10.3 11.2 (+9%)
16
CWB Exports
(MMT) 07/08 08/09F Change
Wheat 11.4 12.65 (+11%)
Durum 3.1 3.35 (+8%)
Barley 2.8 1.6 (-57%)
Total 17.3 17.5 (+1.2%)
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A Series Acceptance
CWRS 80%Durum 60%
Prairie Spring Red (CPSR) 80%
Prairie Spring White (CPSW) 80%
Red Winter (CWRW) 100%
Soft white (SWS) 80%
Extra Strong 100%
Hard White Spring 100%
18
Current Delivery Calls
1/2 CWRS 50%3 CWRS 25%CWRW 50%CPSR 50%CWES 100%CPSW 100%SWS 50%CWAD 45%
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Wheat Storage Program• 1 CWRS 14.5% protein+ - targeted for blending Japan sales
• Premiums:– 15.0 protein - $15.00 per tonne– 14.5 - 14.9 protein - $10.00 per tonne
• Storage $1.00 per tonne per month
• Sign-up deadline March 20, 2009
• Sign-up available across Western Canada - minimum 80 tonne sign-up
• 100% acceptance
20
Churchill Storage GDC Program• Open to farmers in the Churchill catchment area for
holding back deliveries for shipment through the Port of Churchill
• No. 1 and 2 CWRS
• Premium: $2.50 per tonne
• Storage: $1.00 per tonne per month
• Sign-up deadline January 30, 2009
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Churchill Catchment
22
Producer Cars
10500
4282
11969
4284
10912
3552
7933
2590
02000400060008000
1000012000
Railcars
'07/08 '06/07 '05/06 '04/05Crop Year
Annual To Jan 10
23
Ocean Freight Market Overview
24
Dry bulk shipping by vessel since 2000
0
500
1000
1500
2000
2500
3000
3500
2000 2001 2002 2003 2004 2005 2006 2007 2008
mill
ion
tonn
es
Iron OreCoalGrainBalance of dry bulk
25
Baltic Dry Index
0
2000
4000
6000
8000
10000
12000
Jan-0
0Ju
l-00
Jan-0
1Ju
l-01
Jan-0
2Ju
l-02
Jan-0
3Ju
l-03
Jan-0
4Ju
l-04
Jan-0
5Ju
l-05
Jan-0
6Ju
l-06
Jan-0
7Ju
l-07
Jan-0
8Ju
l-08
26
Baltic Dry Index
0
2000
4000
6000
8000
10000
12000
Jan-0
0Ju
l-00
Jan-0
1Ju
l-01
Jan-0
2Ju
l-02
Jan-0
3Ju
l-03
Jan-0
4Ju
l-04
Jan-0
5Ju
l-05
Jan-0
6Ju
l-06
Jan-0
7Ju
l-07
Jan-0
8Ju
l-08
27
Panamax Pacific Round Voyage Daily Hire
0
10
20
30
40
50
60
70
80
90
100
110
May-06
Aug-06Nov-0
6Feb-07May
-07Aug-07Nov-0
7Feb-08May
-08Aug-08Nov-0
800
0 U
SD/d
ay
Jan 14/09$1,693 per day
$75,000/day
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“Bulk Rates Crash Spills Blood”“Catastrophic losses are spreading from operator to operator as the bulker charter-rate crisis deepens.”
Tradewinds (3 October 2008)
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“ArcelorMittal hit by writ in time charter ‘breaches’ bonanza”“… high-profile miners and traders sued for allegedly breaching time charter contracts for ships hired during the troubled final quarter of 2008.”
Lloydslist (16 December 2008)
30
“Loan Defaults to Turn Bankers into Shipowners”“…record drop in rental rates for commodity carriers leaves clients unable to pay back loans...”
Lloydslist (15 January 2009)
31
0
20
40
60
80
100
120
140
Jan-0
3Apr-
03Ju
l-03
Oct-03
Jan-0
4Apr-
04Ju
l-04
Oct-04
Jan-0
5Apr-
05Ju
l-05
Oct-05
Jan-0
6Apr-
06Ju
l-06
Oct-06
Jan-0
7Apr-
07Ju
l-07
Oct-07
Jan-0
8Apr-
08Ju
l-08
Oct-08
USD
/tonn
e
PNW Gulf
Adapted from USDA Grain Transportation Report
Ocean freight spreads narrowing…
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Questions