Canada’s west coast ports are major outlets for the country’s resource exports, including potash, coal, forestry products, pork and beef. A 13-day strike last year disrupted more than C$6 billion in trade at Vancouver and Port Rupert.

The British Columbia Maritime Employers Association said the proposed lockout of more than 700 foremen was preventative as the unit of the International Longshore and Warehouse Union representing them had already issued a 72-hour strike notice.

If the union withdraws the strike notice, Monday’s lockout will not go ahead, the association said in a statement.

The two sides are in protracted talks over a labour deal and have been negotiating with the help of a federal mediator. The stoppage would also affect the port of Prince Rupert.

“In anticipation of escalating and unpredictable strike action, the BCMEA has made a decision to take defensive action in the form of a coastwide lockout,” it said in a statement.

“It will not affect longshoring operations on grain vessels or cruise operations.”

The association said the lockout notice has been issued in order to “facilitate a safe and orderly wind down of operations” in anticipation of a strike.

ILWU local 514 president Frank Morena said in a statement that it had only planned “limited job action” such as refusing overtime and accepting some technological changes, Canadian Press reported.

The impasse comes after a long-simmering dispute over pay and working conditions, including concerns over automation, with each side accusing the other of bargaining in bad faith.

The Port of Montreal, where workers are represented by the Canadian Union of Public Employees, saw the start on Thursday of a strike at two terminals operated by Termont, which handle 40% of the port’s container traffic, but only 15% of its cargo.

Grain and other exports from the west coast were hit in August by a labor dispute at Canada’s two major railways, which the federal government ended by imposing binding arbitration.

The government has resisted calls to interfere in collective bargaining in other disputes, other than offering mediation.

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That was up by 1.1 million tonnes from the previous year’s pace, but slightly behind the five-year average, according to an update from the port authority. Grain movement in August came in at 608,406 tonnes, which compares with 502,502 tonnes in August 2022.

Potash and general cargo shipments were also described as strong, although year-to-date levels for both at 775,014 tonnes and 20,966 tonnes respectively were down slightly from 2022.

Total cargo movement at the Port of Thunder Bay through Aug. 31, at 4.934 million tonnes, was up from 3.964 million tonnes the previous year due to the increase in grain movement.

The Keefer Terminal also had steady inbound vessel traffic during August and the first week of September, with shipments of bulk fertilizer, steel pipe, steel rail and machinery. The terminal is experiencing its best year to date for steel, with regular shipments continuing through the fall, the report said.

Total vessel traffic in the Port of Thunder Bay increased by 50 vessels as of Aug. 31, year-over-year.

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The grain exports were up by 33 per cent from September and up by eight per cent from October 2021, according to a news release.

The increase was seen as a return to more normal grain movement through the Lake Superior port, with Prairie crop production up substantially in 2022 after the drought in 2021 led to decreased shipments.

Total grain exports during the 2022 shipping season-to-date of 4.132 million tonnes are still well off the 5.431 million tonnes moved during the same time in 2021.

In contrast to grain cargoes, shipments of potash cargoes have been strong throughout the 2022 shipping season. As of Oct. 31, more than one million tonnes of the product have been transshipped at the port, the most in over 30 years and up from 413,402 tonnes by the same time the previous year.

Global supplies of potash, an important fertilizer input, have been strained by sanctions on product from Russia and Belarus, which comprise 32 per cent of global production capacity, the Port said in a news release.

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Transport Canada, in a release Wednesday, said the goal of the terminal project is to “increase the number of containers stored onsite, improve the quality of the grain-cleaning service, optimize traffic flow in the yard, and increase capacity for loading and handling containers.”

Set up in 2014 by La coop federee (now Sollio) and other investors, the CanEst facility is sited next to the port’s container terminals to receive grain by rail and truck and provide services such as product cleaning, sifting, packaging and containerizing.

The CanEst terminal, served by both Canadian National and Canadian Pacific railways, has capacity to receive over 100 rail cars and also has with 91 concrete silos, for storage capacity of 68,000 tonnes.

Federal Transport Minister Omar Alghabra and Annie Koutrakis, parliamentary secretary for transport, announced the CanEst funding a week after the final report from the National Supply Chain Task Force was released.

That report, released Oct. 6, the Task Force included a letter to the minister with an “urgent call to address Canada’s transportation supply chain crisis.”

Alghabra said Wednesday the investment for CanEst will help keep supply chains running efficiently.

The task force report goes on to list multiple calls to action, directed mostly at the Canadian government and transportation and supply chain stakeholders.

“Immediately undertake actions to ‘unstick’ the transportation supply chain,” the report’s first recommendation reads.

“These [actions] include addressing congestion at port container terminals and prioritizing government attention on regulations, policies and procedures that are impeding the effective operation of a reliable supply chain.”

Transport Canada said it considers the CanEst project a step toward addressing the issues raised by the task force.

The CanEst project will cost $18 million in total, with the federal component coming from the department’s $2 billion National Trade Corridors Fund (NTCF), which can back both public- and private-sector projects.

CanEst general manager Marc-Aurel Clapperton said the events of the past couple of years have “only deepened our commitment to streamlining the export process.”

Montreal Port Authority CEO Martin Imbleau said the project’s “favourable repercussions” will be “felt even on farms in the Prairies, Ontario and all of Quebec.”

“As Canada’s trade volumes continue to increase, investment in critical infrastructure assets such as seaports, railways, highways and roads, and airports must also increase to meet demand,” the task force said in its report.

Agriculture Minister Marie-Claude Bibeau, in Wednesday’s release, said port infrastructure is “critical” for supporting the flow of Canadian ag products.

— Hannah Polk reports for Glacier FarmMedia from Regina.

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A total of 625,741 tonnes of grain were shipped during the month, marking the first time of the season that grain movement was up from the same month the previous year.

However, year-to-date grain exports of 1.73 million tonnes are still off by about a million tonnes from the same time in 2021 as the Prairie drought left fewer supplies to move.

“Stronger grain production predicted for this year will result in higher port shipments beginning this fall,” the port authority said in a statement, adding “global grain demand remains high while supplies are tight.”

Shipments of potash through Thunder Bay were strong in June, with total movement of 439,716 tonnes to-date more than double the potash movement by the end of June 2021.

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However, potash movement through the port is up considerably, with inbound shipments of general cargo also strong.

Grain shipments through the end of May, of about 1.13 million tonnes, were down by one million from the same time the previous year. The drought that cut into crop production in the Canadian Prairies in 2021 was cited as the main reason behind the reduction in grain movement.

Meanwhile, shipments of western Canadian potash have quadrupled compared to the same period last year. Terminals in Thunder Bay loaded out 280,000 tonnes of potash in less than two months; this is half of the port’s yearly average.

Canada is the world’s largest exporter of potash. Thunder Bay, the only export port on the Seaway for potash, handles shipments moving to Europe, North Africa and South America.

General cargo shipments were strong through the first two months of the season. Keefer Terminal handled over 10,000 tonnes of steel pipe and rail, in addition to a shipment of wind turbine tower sections. Keefer’s large laydown area is a unique port asset that helps attract western-bound general cargo to the Seaway-Thunder Bay route, said the release.

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“I think by next week it’s going to look a lot better,” he said. “Is it normal? No. Normal won’t come for another month or two, but certainly better.”

Extensive flooding and landslides caused by record-breaking rainfall last month knocked out road and railway movement in British Columbia’s Interior, halting trains for almost three weeks starting Nov. 15. Vancouver was expecting to receive about 3,400 grain cars during shipping Week 20 (Dec. 13-19), Hemmes said.

“Bear in mind a normal week is somewhere between five and six thousand,” he said.

“They did around 670 (grain cars) yesterday (Dec. 14), which is really good when you consider the fact that we went for three weeks with almost none so it is coming back. We’re down to 22 (grain) vessels (waiting in port) this week. You do the math — it means they’re still looking for somewhere around 850,000 tonnes. That translates into 85 trains.”

Why it matters: Most of Western Canada’s grain is exported through the Port of Vancouver and normally the biggest volumes are shipped in the fall and winter. Disruptions can affect farmers’ ability to deliver grain and get paid for it, while grain companies are anxious to fulfill sales and avoid demurrage.

About 25 trains a day — seven of them hauling grain — are now getting to Vancouver, Greg Northey, Pulse Canada’s vice-president of corporate affairs, said in an interview Wednesday.

While grain movement hasn’t returned to normal, that was expected, he added.

“They have been moving a lot of grain through there the last week,” Northey said. “At least on the bulk side we don’t expect things to be ‘normal’ until January. But that’s not to say things aren’t moving.”

One issue the railways have in Vancouver is congestion — a problem under normal conditions given how the port is squished between the ocean, the city and mountains.

Clearing containers will be key, Hemmes said.

“They will be moving those as fast as they can so they can clear the backlog off.” he said. “And that’s going to take awhile because I think this morning there were 13 container ships at the port — 13 container ships and essentially eight berths.

“In order to do that they need to get the container trains in with the container cars. It’s not much different than grain. You need the cars to go in to get the traffic out. But there isn’t an infinite supply of container cars.”

While the railways have moved the grain trains on the way to Vancouver when the flooding occurred, the grain backlog created by the disruption remains, Western Grain Elevator Association executive director Wade Sobkowich said in an interview Wednesday.

“It’s going to take the grain industry weeks and months to clear the shipping backlog,” he said. “We’re probably talking the spring before we can say that we’ve caught up or returned to normal. But I think most grain companies are content with the way the rebound has occurred. They are seeing quicker progress under the extreme circumstances than they probably expected.”

In the meantime grain companies have, at their own expense, been trying to relieve some of the pressure on the rail lines running through B.C., Sobkowich said.

“In some cases they’ve diverted vessels up to Prince Rupert and were able to execute a sale out of that facility,” he said. “In some cases they have ceased forward sales of certain products until 2022 and they’ve re-directed some grain — canola for example destined for the export market to the domestic crush.”

The rail outage will have prevented some Manitoba farmers from delivering grain, but Sobkowich said he doesn’t know to what extent.

“Companies have been trying all they can to take scheduled deliveries,” he said. “In some cases they were not able to take unscheduled deliveries until they had better sense when it would move, but now that things are moving again I am sure that producers are being contacted and invited to deliver.”

Much of Manitoba’s grain moves through Thunder Bay until the annual freeze-up on the Great Lakes-St Lawrence Seaway system. The Montreal-to-Lake Ontario stretch of the seaway is set to close for the 2021 season on Dec. 31.

Some Manitoba grain also moves south to the U.S.

Prairie elevators took 4.41 million tonnes of grain in from farmers during Week 18 (Nov. 28 to Dec. 4), according to the Grain Monitor’s Week 18 report. Eighty-one per cent of the Prairie elevator system was being used.

“Space in primary elevators is good,” the report said.

Total western port terminal stocks decreased to 1.09 million tonnes in Week 18, utilizing 56 per cent of the working capacity.

On the export side year-to-date, western Canadian shipments from port terminal elevators as of Week 18 were 37 per cent lower than the same period last year and 22 per cent lower than the three-year average.

While the WGEA has sometimes been critical of rail service, it’s not complaining now given how quickly the railways restored service.

Both Hemmes and Northey are impressed, too.

“I’ve said it before and I will say it again, it’s a testament to how good the railways’ engineering departments are,” Hemmes said. “They managed to take a roll of duct tape and binder twine and turn it into gold.

“They did a phenomenal job and in what you’d think would be the (worst) place to be in the last two weeks, somewhere between Kamloops and Vancouver, because you are ploughing around in the rain and the muck trying to rebuild a railway and you have to do it fast.”

Northey, an engineer by training, said what the railways did would’ve made a fascinating reality TV show.

“The feat of engineering that was pulled off, especially for CP to get their line up and going in six days or less, was really incredible,” he said.

“How they managed to do that, how they are going to get the Coquihalla (highway) up and running in the few weeks is just amazing.”

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man.

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Both railways, along with several major B.C. highways, have been shut this week due to damage from flooding and landslides spurred by a major multi-day storm over the region, cutting access to and from Canada’s busiest port at Vancouver. Floodwaters have receded in some affected areas as rainfall ended later in the week.

Canadian Pacific Railway, in an emailed statement Friday, said work continues “around the clock” on its Kamloops-to-Vancouver corridor, with about 20 separate sections of track already cleared or repaired.

“Work will continue through the weekend and, barring any unforeseen issues, we currently estimate service will be restored mid-week,” CP said.

CN, in a separate statement via email Friday, said traffic through southern B.C., northbound and eastbound traffic from Vancouver and inbound traffic to Vancouver from east and north of Kamloops are “still affected by the situation and we expect the repair work to continue at least into next week.”

That said, traffic to and from another West Coast bulk port, Prince Rupert, is “not directly impacted,” and CN said it’s “working with customers and the Port of Prince Rupert to utilize the available capacity.”

The Prince Rupert Port Authority, in a separate statement Wednesday, said a “number of terminals” at the CN-served port “currently have the ability to handle additional cargo and are actively engaged with shippers and CN to assist in facilitating the movement of critical goods, supplies and trade.”

Facilities at Prince Rupert include Prince Rupert Grain, a 202,000-tonne capacity bulk grain terminal, and Fairview Container Terminal, a 74-acre intermodal container site.

‘Somewhat in flux’

The Ag Transport Coalition, in its weekly update Friday on the big two railways’ grain handling performance up to week 15 (Nov. 7-13) of the shipping year, projected lower demand for rail service ahead in week 17, due specifically to the rail mainline outages that hit at the beginning of week 16.

The ATC said its projections are still “somewhat in flux at this time, recognizing that CN has yet to identify a timeline for service resumption and some CN-served shippers are evaluating opportunities for diverting traffic to the Port of Prince Rupert.”

Rail service demand from the grain sector was already lower before the storm, the two railways said separately. Neither mentioned a specific reason, but Prairie grain and oilseed production is expected to be well down in 2021 due to prolonged drought in several areas.

CN, in its own report on grain handling in week 15, said terminals at Prince Rupert and Vancouver had already seen reduced unloads and out-of-car time due to “light inbound orders as a result of reduced demand.”

Specific Vancouver terminals in week 15, before the storm, were also impacted by “storage space issues due to the inability to load vessels in rain,” CN said.

CP, in its grain supply chain scorecard for week 14, said rail car demand to date had been “well below capacity. As a result, CP has begun placing hopper cars into storage.”

‘Essential goods’

Meanwhile, highway repair crews have also worked “around the clock” and a route into the province’s southern Interior, via Highways 7 and 3, is now open for movement of goods and people travelling, but for “essential purposes only,” the province said Friday.

That said, parts of several major highways including 1, 3, 5, 7, 8 and 99 are still affected by flooding, washouts, mudslides and/or other obstructions and remained closed to traffic as of Friday.

Among the types of vehicles deemed “essential” along the Highway 7 and 3 route are agricultural and farm-use vehicles, including those “supporting flood response,” as well as vehicles of veterinarians “supporting flood response.”

Under the provincial Emergency Program Act, essential vehicles will still have unrestricted access to fuel, mainly using cardlock stations — whereas the general public will still be able to buy fuel for “non-essential” vehicles at retail stations, but purchases will be limited to 30 litres per trip to the station.

As part of the provincial order, gas retailers will be required to make sure remaining gasoline reserves last until Dec. 1.

Allowable reasons for essential travel on the designated route include “transporting livestock, agricultural or seafood products and supplies,” “livestock producers returning to a farm to provide care for animals” and transport of “food, water and other beverages.”

Checkpoints will be in place and travel restrictions will be enforced, the province said.

Drivers using that route should expect sections of single-lane alternating traffic on Highway 7 and three sections of single-lane alternating traffic on Highway 3 east of Hope, the province added.

“Delays will be significant, given the amount of essential goods to be delivered and the many people eager to complete their trips home.”

To “help the movement of essential goods” along that route, drivers are nevertheless “strongly encouraged” to wait an extra day or two to travel if possible.

Non-essential travel is specifically prohibited on:

• Highway 99, from its junction at Lillooet River Road to the BC Hydro Seton Lake Campsite access at Lillooet, and only passenger vehicles and commercial vehicles up to 14,500 kg will be allowed;
• Highway 3, from its junction with Highway 5 at Hope to the west entrance to Princeton; and
• Highway 7, from its junction with Highway 9 at Agassiz to its junction with Highway 1 at Hope.

The province said its order on fuel sales applies to all fuel suppliers in the Lower Mainland-to-Hope region, the Sea-to-Sky region, Sunshine Coast, the Gulf Islands and Vancouver Island.

“These steps will keep commercial traffic moving, stabilize our supply chains and make sure everyone gets home safely,” provincial Public Safety Minister Mike Farnworth said in a release.

“We are asking people not to travel through severely affected areas — for their own well-being, but also to make sure the fuel we do have goes toward the services people need in this time of crisis.” — Glacier FarmMedia Network

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Receding flood waters were helping rescue efforts, but the downpour blocked off entire towns in the province and cut access to the country’s largest port at Vancouver, disrupting already strained global supply chains.

Premier John Horgan said the death toll would most likely rise from the one confirmed fatality.

Many towns are in mountainous areas to the east and northeast of Vancouver, with limited access.

Residents at Merritt, which has been cut off for almost four days, told CTV on Thursday that waters were starting to drop and a bridge has reopened. Merritt is about 100 km southwest of Kamloops.

Late on Wednesday, emergency workers were able to temporarily open a narrow road to Hope, which had also been cut off since Sunday. Once people had left, the road would be closed again, the provincial government said.

At one point the city of Abbotsford, to the east of Vancouver, feared the waters would overwhelm their pumping station and force the evacuation of all 160,000 residents.

Abbotsford Mayor Henry Braun said on Thursday there had been no change in the status of the pumping station and water was receding “at a pretty good clip” in some parts.

“We continue to move toward the recovery phase of this emergency,” he told a briefing, while noting that more heavy rain was forecast for next week.

“We are not out of this by a long shot yet,” he said, adding he had been promised help by federal Prime Minister Justin Trudeau and many provincial ministers.

“I take them all at their word. But I’ve also prepared them for one big bill at the end of this,” he said, estimating it would cost up to $1 billion just to repair local damage.

This strongly suggests the final amount will far exceed the $3.6 billion in insured losses from wildfires that hit Alberta’s oil-producing region of Fort McMurray in May 2016.

“Easily the costliest natural disaster in Canadian history. Won’t even be close,” tweeted University of Calgary economics professor Blake Shaffer, a specialist in climate policy.

The disruption to Vancouver’s operations is set to exacerbate existing supply chain issues and could even make Christmas trees harder to find, farmers said.

One of those who managed to get out of Hope was Simon Fraser University professor Enda Brophy.

“If there’s anything to be learned from this experience, it’s we are woefully underprepared for the environmental disasters that are on the way. We can barely cope with the ones that we have,” he said by phone.

A massive wildfire in the same region during a heat wave this summer may have left hills devoid of vegetation that contributed to the flooding and mudslides.

The federal government in Ottawa is promising to send hundreds of air force personnel to British Columbia and says thousands more are on standby.

— Reporting by David Ljunggren in Ottawa, Ismail Shakil in Bangalore and Anna Mehler Paperny in Toronto; writing by David Ljunggren.

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The six-day blockage of the Suez Canal by the grounded container ship Ever Given caused a major backup of container ships, tankers and other shipping vessels that’s expected to take days to sort out. With many Canadian pulse exports going to Asia and Africa, this type of disruption would cause a domino effect back home.

“It would definitely impact the transit time of the goods arriving to the country of destination,” Elyce Simpson Fraser, senior vice-president of Simpson Seeds Ltd. at Moose Jaw, Sask., said.

Before the Suez Canal blockage, she added, Canadian pulse exports were already facing difficulties due to “Egypt’s blind lack of willingness” to carry agriculture goods during the pandemic.

Difficulties elsewhere include delays, backlogs, cancelled vessels and a lack of empty shipping containers. The burden of additional costs to ship cargoes such as pulses will then be placed on growers.

“We can’t consistently supply cargo to the markets and it’s causing a lot of stress and cash flow situations along the entire supply chain,” Simpson Fraser said.

“It’s really becoming cost-prohibitive and the market is having to deal with these increased costs on top of these delays and we don’t see this ending for another 12 months.”

To make matters worse, an ongoing labour dispute at the Port of Montreal is already impacting shipments. Longshore workers on March 22 voted to reject their employers’ offer but have not yet submitted a strike notice.

That uncertainty has caused volume at the port to drop by nearly two per cent since the start of 2021 and shipments are being diverted away from the port.

Bulk grain vessels would continue to be loaded and served at Montreal in the event of a strike as per the federal Labour Code, but movement of containerized ag products such as pulse crops would be affected.

“The railways in Regina are returning containers… So we’re stuck with product on plant and left with very expensive options to move our cargo a different way, all of which are not necessarily accepted by buyers,” Simpson Fraser said.

“I encourage anyone who is in touch with their local representative in their constituency to put pressure on the (federal) government to step in, because we cannot afford to have a strike or shutdown at that port.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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