Floods in British Columbia have put intense pressure on Canada’s railways as nearly 100 freight trains carrying farmers’ annual harvest remain stagnant across western Canada.
Canadian National and Canadian Pacific repaired service on most of the tracks connecting Vancouver Harbor to growers across the prairies on Tuesday and Wednesday after torrential rains and landslides cut off the vital supply link last week. .
But a disastrous weather event was enough to delay product shipments for weeks, if not months, experts say, adding to the problems for grain producers who rely on railroads to transport their wheat and barley to Vancouver. where it is then shipped to major customers across the country. Asia and Latin America.
There are roughly 100,000 tons of grain stuck in trains en route from Alberta and Saskatchewan to Vancouver as of Monday, the Canadian Federation of Agriculture told the Star.
“Even if we resumed full service, it would take an enormous amount of time to eliminate that delay,” said Tom Steve, general manager of the Alberta Wheat and Barley Commission.
Canada’s railroads, sometimes referred to as the economy’s “conveyor belt” for their constant speed and capacity, have already faced the stress of excess demand and brittle logistics that have consumed supply chains around the world.
Throughout the COVID-19 pandemic, demand has increased for products made in Asia and shipped to Vancouver via container ships. The large influx of orders has raised transportation costs and challenged the port’s ability to process incoming products.
Meanwhile, trucks and trains have been quick to handle the wave of container shipments. Ground transportation often gets bogged down in traffic outside the terminals, as it faces labor shortages and logistical difficulties of its own.
Based on Star’s analysis of data from the US Department of Agriculture., the number of stopped CN and CP wagons has increased dramatically in recent months. Between the two rail lines, more than 1,500 loaded wagons sat idle for 48 hours or more in the first three weeks of November, according to the data, representing a 46 percent increase from November 2019.
Approximately $ 240 billion in goods flow through the Port of Vancouver annually, representing $ 11.9 billion of Canada’s Gross Domestic Product (GDP). Railroads are a crucial mode of transportation for Canada’s grain exports, which accounted for $ 21 billion in sales to foreign buyers in 2017.
“If you are not a reliable supplier, it erodes your ability to sell to those customers,” said Mary Robinson, president of the Canadian Federation of Agriculture.
The flooding comes in the middle of the Canadian summer canola crop delivery season. After an extremely dry summer in the grasslands, farmers have relied on less produce to generate income during the delivery months.
With continued delays in grain shipments, farmworkers fear that a lack of cash flow could cause financial strains.
“With the drought, farmers have already experienced a reduction in profits this year. The floods and delays now mean they won’t be able to convert the remaining grain into cash, ”Steve said..
The combined impact of lost trade, lagged spending and production will lower national GDP in November, according to a recent forecast from the Bank of Montreal. On Monday, the Royal Bank of Canada projected that British Columbia’s GDP would fall from 5.3% to 3.8% growth in 2021.
“There is always pressure on the railroads to keep things moving forward,” said Barry Prentice, professor of supply chain management at the University of Manitoba.
Rail shipments are not easy to divert, either. Some grains can be shipped to ports in Prince Rupert, BC, Thunder Bay, or the US, but the terminals often lack the ability to quickly invite large volumes of commodities.
While some of the grain is delivered by truck, most of it is shipped by freight trains due to capacity, Prentice said.
“With the volumes moved, you can’t just put them in trucks, it won’t work,” Prentice said.
CP Rail said the Port of Vancouver began accepting incoming trains on Wednesday after hundreds of employees and contractors rushed to restore the rail lines.
“Fortunately, CN and CP have always had a very strong operational plan in and out of Vancouver that helps them handle these types of ebbs and flows,” said Tony Marquis, a former rail executive who oversaw operations at CP and prior to that. CN.
But another set of storms is forecast for British Columbia, which could see another 80 millimeters of rain around North Vancouver.
The weather won’t be as significant as it was last week, although Environment and Climate Change Canada warned that more rainfall could worsen landslides and floods.
“The rail lines are making good progress in repairing the damage, but all bets are off if we end up with three or four more days of heavy rain,” Prentice said.
Reference-www.thestar.com