Rail operations ‘severe concern’ due to potential Canadian strike

by Derek Clouthier

All rail operations throughout North America are being moved to a severe concern due to the potential labour disruption in Canada and inland port intermodal (IPI) congestion at ports in Los Angeles and Long Beach, according to the U.S. Port/Rail Ramp Freight Index from ITS Logistics.

A Canadian strike would negatively impact ramps in the U.S. Midwest and Toronto, as the majority of those containers enter North America through Canadian ports. ITS says in its report that the best operational plan to avoid these challenges is to terminate imports at port of entry and use dray off, transload and one-way trucking to get freight into distribution centre networks.

Barry Kukkuk, CTO of Netstock, says if the strike takes place, the impact will continue to be seen across the North American supply chain.

“It could result in delivery delays for inventory, thus negatively impacting inventory levels for many companies across the Canadian and U.S. supply chain,” says Kukkuk. “This could be particularly devastating for businesses moving high volumes of inventory that are often rail-dependent or can’t be transported via truck. Industries like agriculture and coal could be impacted.”

Kukkuk says these kinds of inevitable disruptions in the supply chain should spur businesses to prepare for longer lead times on shipments.

“Implementing a long-term inventory management solution and strategy is necessary for helping businesses navigate supply chain complexities,” he says. “With the help of accurate data and supply chain technology, businesses can become more agile and responsive – ensuring they can make the right decisions today to meet demands and remain nimble amid future disruptions.”

Maersk is also weighing its options in the face of a potential Canadian rail workers’ strike.

“In light of concerns for our customers’ supply chains, Maersk has been reviewing contingency actions,” the company said in a release to its customers. “For example, as referenced in our prior advisory, we continue to explore limited truck options for West/East – East/West intra-Canadian transport in the event of a work stoppage.”

On the ocean side, Maersk re-evaluated inducements to Tacoma, Wash., on its TP1 service due to recent developments. Two vessels will induce Tacoma to accommodate U.S. import/export rail cargo, including:

  • Maria Y – voyages 419N 422S, arriving in Tacoma May 30
  • Santa Barbara – voyages 420N 423S, arriving in Tacoma June 5

However, the inducements of the following vessels are now under review. Unless otherwise communicated, these vessels will resume their standard scheduled callings:

  • MSC Domna X – voyages 421N 424S
  • GSL Effie – voyages 422N 425S

There are no changes to Maersk’s CAE or MCX scheduled sailings calling East Coast Canada at this time.

All contingency sailings have been updated on the company’s online platforms.

As reported by Inside Logistics May 16, the Ministry of Labour has asked the Canada Industrial Relations Board (CIRB) to look into the potential rail workers’ strike and if it would impact the health and safety of Canadians.

Upgrades coming to California ports

The Ports of Los Angeles and Long Beach (San Pedro Ports) will receive more than US$112 million through the 2024 U.S. Army Corps of Engineers Work Plan for critical construction upgrades and operations and maintenance activities.

The Long Beach Port is planning to spend $2.3 billion over the next 10 years in capital improvements aimed at enhancing capacity, competitiveness and sustainability. Although the bulk of the funding is designated for rail projects, the port has identified specific needs for seismic upgrades in addition to the maintenance and repair of existing rock dikes, concrete and steel bulkheads, wharves and other marine structures.

The infrastructure repairs for piers and wharfs at the San Pedro Ports are intended to strengthen U.S. supply chain networks. The Port of Long Beach alone owns and maintains approximately 31 miles of waterfront facilities which will benefit from these funds. The Port of Los Angeles estimates the total need for expanded uses, navigation maintenance and repair projects at $6.7 billion. Pending projects at the port include seismic safety upgrades, wharf and fender repairs, pile replacements, sediment removal and remediation and improvements to slips and channels.