Whilst the coronavirus has grabbed the attention of the world’s logistics sector, Canada’s rail freight system and the ports connected to it have been crippled by protests. The latest news is that the demonstrations have ended for the moment in response to court injunctions although it is far from certain that the disruption will not reappear.
On February 6th protestors began blocking a rail junction in Belleville, Ontario, followed by similar action in British Columbia. This had the effect of bringing almost all of the major routes of Canadian National (CN) in Eastern Canada to a halt whilst services between Eastern and Western Canada have been substantially reduced.
The blockade in British Columbia ended on the 14th February, however, the impact on the port of Prince Rupert has been significant with services reportedly still not having returned to normal. The action in Ontario continued until Monday 24th February, although it appears that the police have cleared the line for now. There have been other attempts to block lines elsewhere in Canada, however, these have been met with counter-protestors who have cleared any obstruction. The situation still appears to be volatile.
In response has CN laid-off several hundred employees whilst passenger service providers have laid-off around a thousand staff.
The impact has been particularly severe on ports on the Atlantic coast with the port of Halifax having its landside transport badly constrained bringing operations to a near-halt. Congestion in container yards has become severe. Shipping lines and forwarders have been forced to re-route cargoes bound for Eastern Canada to New York, moving cargoes into Canada by truck. The port of Montreal reports said that it was dealing with “greater logistical complexity”.
The effect on supply chains within Canada has not yet become severe however the resulting misalignment of the railway network may continue to have effects on major customer groups such as agriculture or mining for several weeks.
The underlying issue is disagreements over the development of a pipeline network from the oil producing states of Western Canada to the Pacific Ocean. This is both of very great economic importance for Canada’s economy and politically highly controversial. Consequently, the issue is unlikely to be resolved quickly. The chance of protestors once again blocking rail lines must surely be quite high although the Canadian government appears to have become alarmed at the damage that this is doing to the economy and therefore may take stronger action to prevent disruption.
Source: Transport Intelligence, February 25, 2020
Author: Thomas Cullen