Thank you, Mr. Chair. On behalf of the Thunder Bay Port Authority, I'd like to thank you for the opportunity to appear before you here today.
The history of the Port of Thunder Bay is based on grain transportation. The first grain elevator in the port began operations in 1884. During its peak years, Thunder Bay was the primary load point for Canadian grain exports, holding the distinction of being the largest grain port in the world and the third largest port in Canada. Thunder Bay currently ranks ninth largest of the 19 Canadian public ports, shipping an annual average of 8.5 million metric tons. It is the second largest Canadian port on the Great Lakes.
The Port of Thunder Bay and the St. Lawrence Seaway transportation corridor continue to play an essential role in the eastern movement of Canadian grain, handling an annual average of 5.9 million metric tons over the past five years, between direct ocean shipments and the servicing of transfer elevators in Quebec. The port serves markets in Europe, Africa, South America, and Mexico. In addition, western Canadian grain crops are shipped by the Canadian lake fleet through to the domestic markets in eastern Canada. Grain represents over 70% of the port's total shipments.
Thunder Bay is the largest point of origin for export cargo transiting the St. Lawrence Seaway system, providing a critical back haul for the Canadian lake fleet, travelling upbound with iron ore. The port operates from the end of March to the beginning of January each year and hosts over 400 ships per year.
The port has nine operating elevators with a combined storage capacity of 1.4 million metric tons, the largest in any single location in Canada. This storage capacity allows for the efficient use of the Canadian lake fleet throughout the shipping season, as well as unparalleled capabilities in the traceability and blending of grain. The port also has two bulk terminals capable of handling grain. The grain terminals in Thunder Bay remain focused on productivity improvements, and they have made steady improvements in railcar unloading times and vessel waiting times. The time that ships spend in port was reduced by 13.6% in the first half of this year, to an average of 1.9 days, the lowest of all western Canadian ports. This compares to eight days in Vancouver. Our average car cycle time for the first six months of the 2005-06 crop year was 18.3 days in Thunder Bay, compared to 19.3 days in Vancouver.
The Great Lakes-St. Lawrence waterway is one of the world's greatest and most strategic commercial inland transportation systems, generating over $4 billion in economic impact and roughly 20,000 direct jobs in Canada. In 2005, 43.3 million tonnes were shipped through the seaway, which is considered to be about 50% of the capacity of the system.
Marine transportation is the best mode, from the point of view of reduced emissions in virtually any situation where the speed of delivery is not paramount. The St. Lawrence Seaway Management Corporation, in conjunction with the Great Lakes ports, launched the Highway H2O program in 2004, with the goal of promoting the waterway and diversifying cargo movement. Toll incentives for new cargo were put in place, and to date 400,000 tonnes of new cargo and $1 million of incremental revenue have been generated.
Ocean shipping is projected to double in the next 10 years, resulting from the explosive growth in the economies of India and China. This growth will challenge coastal ports and all North American modes of transport. The seaway holds great promise to help meet future transportation needs and improve our nation's energy efficiency, while lowering greenhouse gas emissions.
During the past four seasons, an average of 850,000 metric tons of wheat and barley was shipped directly by rail from the Prairies to Quebec, bypassing Thunder Bay and the seaway corridor. This is the primary threat to the Port of Thunder Bay. The seaway's nine-month operating season is often used as the rationale for this movement. However, currently five trains per week, or about 60,000 metric tons, are bypassing the seaway, and our port will remain open until early January.
With the loss of inbound general cargo in the early 1980s, only about 5% of our port shipments are inbound. The Port of Thunder Bay's current initiatives focus on increasing inbound ocean vessel traffic with European cargo destined for the booming Alberta economy, utilizing grain as a back haul.
We feel that by capitalizing on our available transportation infrastructure, we will be able to enhance economic activities in our region and increase grain shipments through the port by providing increased availability of ocean vessels in the system.
In summary, the seaway system is a strategic transportation corridor in Canada that's currently underutilized. The seaway's future success will depend on its ability to retain existing traffic and be viewed as a viable transportation option.
The Port of Thunder Bay's future success in particular is based on retaining its status as an important gateway for the western provinces. We must force costs out of the system to remain competitive, respond to the demands for a more customized approach to service, and provide new, innovative solutions to meet transportation needs and become part of the strategic transportation planning efforts in western Canada.
I have provided the following recommendations for your consideration: one, eliminate the coast guard marine services fee; two, modernize navigation services; three, adjust Grain Commission work practices to keep pace with productivity advances in the grain terminals; and finally, utilize ocean vessels in addition to the lake fleet as an alternative to direct rail to Quebec for wheat and barley shipments.
Thank you.