Thank you, Mr. Chairman and committee, for the invitation to participate in today's meeting.
I'm Mark Hemmes, the president of Quorum Corporation, which is based in Edmonton. Quorum Corporation has been responsible for monitoring Canada's prairie grain handling and transportation system on behalf of Transport Canada and Agriculture and Agri-Food Canada since June 2001.
The grain monitoring program reports to the government and to industry on the efficiency, reliability, structure and operation of the grain handling and transportation system, as well as any impacts that change may have on producers and the industry.
The GMP tracks grain from the farm gate to the destination at port, including the performance of port vessel activities. We collect industry data and develop and maintain over 250 key measures on the GHTS and publish weekly, monthly, quarterly and annual reports on the grain handling system, in addition to ongoing analysis and discussions with industry stakeholders.
I'm not going to repeat many of the excellent points that have been made by some of the previous presenters, but I do wish to expand on some of the issues that have been raised.
First, a continued focus on infrastructure improvement throughout Canada's transportation network is imperative to Canada maintaining its place in the global agricultural marketplace. The grain industry has enjoyed an annual volume increase of 3% a year over the last eight to 10 years, and the grain companies have invested well over $4 billion in that time, adding to and expanding the capacity of their portion of the supply chain. In order to remain competitive, the balance of the supply chain partners must continue to invest in their infrastructure to match that rate of growth.
Second, the shortage of empty container capacity is crippling an increasing proportion of Canadian specialty grain markets that have successfully been developed over the past 15 years, and is putting those markets at a risk of loss. An important point is that in Canada we have an extreme lack of detailed short-term data on container movement and performance. The data that is available comes more than six months after the fact and describes only the traffic moving from port position, without any information on where the traffic originated. Therefore, the inability to determine the impact of the shortfalls or disruptions in the supply chain cannot be examined in detail until as long as six months after the fact. In contrast, we have extraordinary detail on the movements and effectiveness of bulk movement and export movements.
The lack of data and information on container movements is a critical issue for Canada's container exporting sector, in particular in times such as we're experiencing right now, with shortfalls in available empty capacity and extended service delivery times. At present, we can refer only to anecdotal evidence until the actual data becomes available.
Thirdly, the resilience and recoverability of the railways after the unplanned service disruptions they will always incur is another critical factor that impacts Canada's reputation as a reliable and consistent supplier of products into the global markets. At issue, and what draws the consternation of the rail shippers, is the length of time it takes to recover from outages, which can often extend to months, as in the case of the present post-B.C. flood period.
Regarding resilience and recovery, the measures that come from the GMP and the Ag Transport Coalition provide good examples of how data and statistics can help identify problems in the supply chain. The graph that was provided in the document we've sent on uses GMP and ATC data to show the causal relationship when railways do not meet shipper demand and how it impacts the port grain terminals and may cause vessels to stack up waiting for that grain to arrive. The graph portrays the comparison over the last three and a half years, where six times we can see the almost immediate effect of shortfall in shipper demand, causing terminals to run out of cars to unload, ultimately lengthening the time vessels wait and therefore causing vessel lineups to grow, consequently filling the anchorages in the Vancouver port area.
We see this even in the current crop year, where volumes have been reduced by 40% as a result of the summer's drought conditions and grain vessels should be much lower. Despite this, the railways have not been able to maintain consistent service or supply adequate car supply to meet demand, and the vessels that are in port are experiencing much longer wait times and creating record levels of vessel demurrage. Should there have been a normal-sized crop this year, as Bill Campbell mentioned earlier, this situation would have been very much worse.
While shortfalls in car supply and cars available for unloading—