Forestry and grain exports from Canada's Pacific coast slowed to a trickle as a strike at the country's largest port and a shortage of rail cars at Canadian Pacific Railways and Canadian National Railway are creating bottlenecks.
Lumber and pulp cargo has been stuck in warehouses in British Columbia after hundreds of truck drivers who transport the products in containers to Port Metro Vancouver walked off the job on Monday, reported The Wall Street Journal.
CN has told forestry producers it would stop shipping cargo from mills until the warehouse backlogs are cleared.
The rail-and-port traffic jam is hurting both rail exports to the US and overseas container traffic.
British Columbia exported US$9.1 billion of forestry products in 2013, nearly half of which goes to the US by rail. The Vancouver port said the work stoppage could affect about $798 million in cargo shipments each week.
"This is grinding us down to a trickle of exports coming out of the province," said James Gorman, president and CEO of the Council of Forest Industries in Vancouver. "We're sort of strangled here."
Rail cars were in short supply even before the port strike as a record grain crop, cold weather and higher crude-oil shipments squeezed capacity. CN said the work stoppage at the port left it "no choice" but to stop handling forestry shipments, and said it regretted the action.
The railroad operator said it would continue to work with warehouses to identify those that have room for shipments.
Grain shipments to the US have already been throttled by the lack of rail capacity, leading Ottawa to impose new rules last week to force the railways to ship more grain. That has left some forestry producers worried that even fewer rail cars will be available for them.
Forestry and grain products make up roughly two-thirds of all goods shipped from Vancouver's port, according to Port Metro Vancouver statistics. Last year, the port exported nearly 4.5 million metric tonnes of lumber, 2.5 million metric tonnes of specialty crops and 2.4 million metric tonnes of woodpulp.
Forestry producers said they fear delayed deliveries could lead customers in China, Japan and other countries to look elsewhere for wood products.
Some lumber companies in British Columbia are seeking other methods of shipping their product out of the province, such as through break-bulk cargo, or cargo that is loaded individually, which can be more costly than moving containers. Some are looking at exporting their product through US ports.
Rail shipments of forestry products are off this year. CN has recorded a 9.3 percent decline in forestry goods since the beginning of the year, while shipments at smaller rival Canadian Pacific have fallen by 17 percent, according to Cherilyn Radbourne, a rail analyst with TD Securities.
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