Preparing for an upswing

by Emily Atkins

In spite of the pandemic’s chilling effect on economic activity, two major Canadian intermodal infrastructure projects have announced significant progress in recent weeks, alongside a mixed prognosis for short-term recovery in the sector.

Traffic watch

Intermodal traffic in North America “bottomed out” in April, said transportation consultant Larry Gross in a recent IANA webinar. International traffic reached its nadir in March, and began to rebound in April as Chinese manufacturing began to come back online. Gross said there was a huge increase in trailer volumes between April and May, largely due to a surge in premium traffic of parcel and LTL in support of the massive increase in e-commerce during the pandemic lockdowns.

He also noted that train speeds were 9.5 percent better than average for the Class I railroads, and Association of American Railroads (AAR) data showed an uptick in traffic since mid-May.

Gross said he was “quite pleasantly surprised at how rapidly things are recovering.”

Providing a prediction for a recovery’s timeline and size, however, is a feat of prognostication that he said would require the combined skills of a Ph.D. in epidemiology, an M.A. in political science, an M.A. in sociology, and a Ph.D. in economics to unravel all the different factors that may affect the future of transportation. “The degree of uncertainty at the moment makes any forecast highly speculative,” he said.

Gross posited a number of different possible recovery scenarios, from the best-case ‘V’, which would mean a quick return to previous levels of activity, to the worst case ‘W’, with its second – possibly deeper – drop off. He suggested that the current level of recovery is likely going to slow, and predicts a slow retraction of the declines seen in Q1 and Q2 this year. “Be very flexible and have contingency plans in place for a potential retrenchment, as well as for a capacity shortage thanks to growing tightness in domestic box supply due to abnormal trade flows,” he said. “Flexibility will be the watchword for all of us.”

Quebec’s port gambit

With the signing of several memoranda of understanding among seven major players, the Quebec Port Authority’s Laurentia container terminal project took a step closer to reality in June. Hutchison Ports, the Port of Rotterdam, CN, PortXL, Québec International, Université Laval, and Québec City will all work together to bring the new deepwater intermodal facility online by 2024.

Funded by a joint $775 million investment by Hutchison Ports, CN, and the Port of Québec, Laurentia is expected to provide a new gateway to the Midwest-U.S. market, said CN president and CEO Jean-Jacques Ruest. “We’re connecting the City of Quebec to the world, making it the port of choice to serve the U.S. Midwest market. CN joined this project because we’re confident we can make the Port of Quebec a major player in domestic North American markets.”

For Hutchison, the world’s largest port operator, with a network that spans 52 ports in 27 different countries, the Quebec facility will be its gateway to the North American market. Port of Rotterdam International will share its expertise, gained from centuries of port operations.

The port is being developed as a sustainable and tech-forward container terminal. Port XL, which specializes in the technical integration of port activities, will take part in its first North American project. A new Québec centre for global maritime and logistics innovation is expected to also attract researchers and startups along with Université Laval and Research Chairs recognized in Québec for advances they have made in the fields of artificial intelligence, supply chain optimization and green technologies in maritime transportation.

Once operational, the port is expected to create 1,000 jobs, and deliver an estimated $100 million of annual economic activity.

A2A starts surveying

The Alaska – Alberta Railway Corporation (A2A Rail) has commissioned an engineering firm to begin detailed land surveying along the Alberta segment of the railway’s proposed route to Alaska.

Having secured funding for this critical pre-construction activity, A2A Rail and its technical team will now begin a three-month planned process of field investigation and topographic modeling.

The survey process is part of an accelerated development effort that will allow A2A Rail to engage in early field activities (such as land clearing, fencing and access road preparation) in Alberta within the next three to six months.

“A2A Rail continues to gather momentum. The start of surveying activities means that we are now officially ‘boots on the ground’ here in Alberta,” said A2A Rail founder and chairman Sean McCoshen.

The A2A railway was conceived to transport bulk commodities including oil, grain and ore in addition to containerized goods. The proposed 2,570-kilometre route will connect the North American railway network via Northern Alberta to the existing Alaska Railroad network and Alaska’s deep-water ports.

The project is expected to generate more than 18,000 jobs for Canadian workers.

Next steps include environmental impact assessments that are necessary in both countries to determine the most sustainable way to build and operate the railroad.

Alaska – Alberta Rail is a privately owned corporation.