As Canada braces for rail stoppage, truckers scramble to meet demand

While Canada is gearing up to handle a possible freight rail strike, the trucking industry is in a state of confusion regarding increased demand that it has difficulty fulfilling. The predicted disruption due to grassroots’ grievances risk paralysing CNR and CPKC operations simultaneously beginning Thursday, a first in the Canadian transportation industry.

Indeed, it is evident that Canadians are heavily dependent on railways for transportation of goods and commodities and with operations ceasing in preparation for the strike or lockout, businesses are now turning to trucking companies with unprecedented requests. A Director of Operations at Centurion Trucking in British Columbia, Daman Grewal stated, that his business saw a steep uptick in inquiries – normally, he receives 20 to 30 calls a week regarding shipments east across Canada on Monday. This week though, the amount reached over 500.

This happens because the increase in demand leads to sharply higher transportation costs. One that used to be at CAD 7,000 (USD 5,139) has now been hiked to CAD 9,000 which is rare even during COVID-19 scarcity. Grewal also pointed out that optimisation could increase Centurion Trucking’s capacity by 10% to 20%, and this would not make up for the gaps left by rail transport.

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These people in the industry have pointed out that while there are some accommodations that can be made in the short term, the long-term capacities of rail transport are not easily substitutable with that of trucking. Robert Harper, the president of the Alberta Motor Transport Association also pointed out that while the trucking industry can take up the slack for now, it does not possess the equipment or resources to adequately handle rail logistics.

Freight forwarder based in the US namely CH Robinson says that Canada’s carriers are responsible for 85% of the cross-border road transportation between the United States and Canada. Scott Shannon, the vice president for Canada at CH Robinson, said that it is highly possible for certain spot market rates to skyrocket within the latter part of the year and lead times to be stretched even more due to the existing demand and the limited supply.

While some rail companies have started to announce the gradual closure of their operations, the extent of disruption largely will depend on the time factor. Fraser Johnson, a professor at Western University specialising in supply chains, discussed that since there is no realistic rail replacement for logistically moving large quantities of goods, the federal government may have to step in to support sectors affected by such disruptions.