A continued truck strike at Port Metro Vancouver could cost the major Canadian freight railroads intermodal business and further hamper the export of containerized forest products.
The strike, now in its third week, could spur shippers to shift cargo to ports in the U.S. Northwest, reducing intermodal volume handled by Canadian Pacific Railway and Canadian National Railway, Fadi Chamoun, an equity analyst with the Bank of Montreal, said in a research note issued yesterday. The provincial government of British Columbia is planning to introduce a back-to-word order as soon as March 24 that would force union drivers to restart truck service. But the 90-day cooling off period wouldn't affect non-union drivers. A threat this week by the port authority against truck drivers’ licenses to perform harbor work did not appear to bring the truckers back, as truck traffic was just 36 percent of normal on March 20.
Striking truckers have already limited the transloading of forest products into outbound containers, and continued labor unrest could further hurt CN’s forest product business, which has already suffered from a reduction in construction due to the harsh winter. Because of on-dock rail access, the strike has had limited impact on inbound intermodal traffic, Chamoun noted.
“The constrained export traffic has caused a spike in inventory levels of forest products at warehouses along the Canadian West Coast,” he said.
CN last week told forest product shippers that the strike was preventing the railroad from taking all of their lumber and pulp carloads for transloading. The railroad on March 12 eased the embargo on rail shipments to container stuffing facilities that it had imposed the Sunday before by granting exemptions to some sites that still had capacity or were moving freight.
Outbound containerized shipments of lumber, pulp and paper products accounted for more than half of Vancouver’s export container volume last year, Chamoun said. Forest product traffic made up about 9 percent of CN’s total carloads in the same period, he added.