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Canadian railroads are ramping up railcar supply to handle a surge of Asian imports through the Port of Vancouver, as some forwarders say they are already seeing delays in transits to the US Midwest — a sign of just how quickly Canada’s largest container gateway can become congested.
Vancouver, similar to Los Angeles and Long Beach, was caught by surprise by a spike in imports in July and August after five consecutive months of plunging volumes due to the coronavirus disease 2019 (COVID-19). The import surge in Southern California has caused congestion, equipment shortages, and labor shortages throughout the supply chain. Vancouver’s issues are confined to its rail operations as truck turn-times at the marine terminals have not been affected.
J.J. Ruest, Canadian National Railway president and CEO, told JOC.com last week the railroad is returning furloughed labor to their jobs and is positioning intermodal rail cars to Vancouver, but it takes about two weeks from when the initial call is made until the resources are back in the network.
Canadian Pacific issued a statement Wednesday saying that despite some challenges in recent weeks with railcar supply, “CP’s overall performance in Vancouver is trending favorably.”
According to a source with knowledge of port operations, marine terminal operators in Vancouver are dealing with a shortage of railcars, a 15 percent month-over-month increase in imports, and a slow response in bringing rail assets back online after the unusually slow months this spring.
July was Vancouver’s busiest month of the year so far, with 303,559 laden and empty TEU handled. That was up from 275,171 TEU in June, according to port authority statistics. The spike in cargo contributed to increasing container dwell times, which in turn caused congestion at the marine terminals.
According to rail metrics updated daily on the Port of Vancouver website, CN’s container dwell time at its Vanterm Operation Tuesday was in excess of seven days. Dwell time was in the range of five to seven days at the Centerm and Fraser Surrey Docks terminals, and dwell time at the largest Vancouver terminal, Deltaport, was in the range of three to five days. CP’s rail container dwell times were five to seven days at Vanterm and Centerm and three to five days at Deltaport.
Terminal operators say operations are fluid when dwell times are three days or lower. According to the port authority, the average rail container dwell times for the gateway jumped to four days in July from 3.2 days in June, and 2.8 days in May and in April.
Impact not yet felt in ChicagoImporters and non-vessel operating common carriers (NVOs) said the rail congestion in Vancouver has not yet resulted in lengthy delays in receiving shipments in Eastern Canada or Chicago railyards. CN and CP offer direct intermodal service from Vancouver throughout Canada and to the US Midwest. CN likewise serves all of Canada and has direct service from Prince Rupert to Chicago.
However, the situation could deteriorate rapidly, as occurred in recent years when there were winter weather problems, labor issues, or political protests along the rail networks.
“In the past, when Vancouver got a stomachache, we got the stomach flu,” said Kevin Krause, vice president of ocean services at SEKO Logistics in the Chicago area.
“When rail backs up in Vancouver, out of nowhere you get hit, without notice,” said David Bennett, president of the Americas at Globe Express Services, which likes SEKO ships from Vancouver to Chicago.
Julia Kuzeljevich, public affairs manager at the Canadian International Freight Forwarders Association, said her members are reporting no specific issues originating in Vancouver, although forwarders in Eastern Canada are dealing with the impact of a dockworker strike at the Port of Montreal. She indicated that given the transcontinental operations of the Canadian railroads, issues in one region can affect the entire rail network.
Prince Rupert, 500 miles to the north of Vancouver, also experienced issues with rail dwell times and car supply in July, but the port has rebounded quickly, said Brian Friesen, the port’s vice president of trade development and communications.
“CN ramped up its railcar supply to Prince Rupert, and they’re working with the lines and DP World [the port’s terminal operator],” he said. Container volumes in July were down 4 percent from July 2019, and the port had an especially strong peak season last year, said Friesen.
Canada’s Pacific Northwest ports are bracing for strong import volumes from Asia at least through September, which echoes reports from carriers and NVOs in the eastbound trans-Pacific.
This article first appeared on www.joc.com
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