Pre-shutdown contingencies helped keep shipments moving, industry insiders say

In Canada, railroad union contract talks and trains came to a near-simultaneous halt, but shippers and logistics executives said the recovery has been almost as swift.

“The work stoppage situation was resolved so quickly, we are not seeing much impact on the recovery,” Shelli Austin, president, InTek Freight & Logistics, based in Indianapolis, said in an email to FreightWaves. “We actually saw more impact on the pro-active planning leading up to the work stoppage.”

The Canada Industrial Relations Board last week upheld a government order ending the lockout of Teamsters Canada union employees by CN and CPKC after bargaining failed to reach a new agreement. 

A spokesman for the Port of Vancouver Fraser Authority said the gateway loaded 72,000 feet of intermodal railcars Monday, the first full day of restarted operations. Average daily rail production at Canada’s busiest west coast container gateway from April to just before the work stoppage was 58,000 feet per day, but the spokesman added that the port had seen volume as high as 80,000 feet in the days leading up to the lockout.

The rapid recovery at Vancouver was a good sign for the supply chain, as ports up and down the west coast have been stressed by early peak season eastbound import volume on trans-Pacific services.

“[R]oughly 13,000 containers were already stacked up at the rail ramps before the shutdown and one of the three container terminals there had reached maximum capacity,” said Scott Shannon, vice president, Canada, for U.S.-based C.H. Robinson, in an email. He noted that the stresses of peak traffic previously led the port to ask inbound ships to slow down so terminals could work on the backlog.

The rail shutdown may have been brief good news for motor carriers as shippers diverted from ships to trucks. 

“Spot rates for trucking in Canada may remain elevated for a week or two until the dust settles and then slowly return to their pre-strike levels,” Shannon said.

Austin concurred.

“We did a lot of backup plans for our customer for truck solutions in the event it lasted longer and the embargoes took place almost a week before the stoppage date. So that is really when we had to put in alternate plans for coverage to keep products moving.”

The rail situation was the latest hiccup in a period that’s been anything but predictable.

“This ‘peak’ season is odd,” Austin said. “I know there have been surcharges declared but it does not feel yet that it is as tight as what it would normally be during a strong peak and we don’t see the drastic swings in rates out of the West Coast on truck[ing] yet. We continue to put plans in place to protect our customers for a peak because we all know things in this market can turn on a dime.”