Date: Thursday, July 8th, 2021
A disruption in CN and Canadian Pacific rail service caused by a wildfire in western Canada is rippling through the supply chain to the Port of Vancouver, bringing additional delays and congestion at a time of unprecedented container traffic.
While CP (NYSE:CP) has resumed maritime service, CN (NYSE:CNI) is rerouting some traffic as it assesses the damage from a fire that devastated a village in British Columbia last week. The impacts are beginning to take shape in Vancouver, Canada’s largest port, where the railways provide on-dock service.
The Vancouver Fraser Port Authority said in an operations update Wednesday that “demand for large vessel anchorages currently exceeds capacity.” The port previously said it anticipates delays and is “working with terminal operators, the railways and the government … to develop a recovery plan.” A port authority spokesperson declined to comment further.
Shipping lines Hapag-Lloyd and Maersk warned customers on Wednesday to expect delays and congestion.
“The overall backlog is significant,” Hapag-Lloyd said in an advisory.
Maersk said it expects the impacts at the port to last for at least a week, noting, “We will see increased congestion at terminals and expect vessel delays.”
‘Devastating’ blaze disrupts key stretch of CN, CP rail networks serving Vancouver
The disruption stems from a fire in Lytton, British Columbia, last week, which left two people dead and destroyed most of the community amid a wave of wildfires across western Canada. The blaze damaged tracks owned by both railways and a bridge owned by CN, halting rail traffic in a critical part of the companies’ networks about 160 miles northeast of Vancouver.
“The staggering damage of the wildfire on the village of Lytton and the nearby Lytton First Nation is devastating,” CN said in a statement to American Shipper.
Northbound and southbound intermodal and carload traffic from Vancouver and inbound traffic from east and north of Kamloops was still being impacted as of Wednesday evening, CN said. In the interim, the railway “is also working to detour limited traffic where possible to decongest the network.”
Railways face tensions with indigenous community over recovery
CN said it did not have an estimate for when normal operations would resume as it waits for permission from leaders of the Lytton First Nation to access the site.
CP resumed its maritime operations serving the port on Monday afternoon and has warned customers to expect delays of three to four days.
“The safety of the public and our employees is our priority and we are implementing appropriate measures, such as increased inspections of our tracks and equipment, during this period of extreme weather,” CP said.
Adding to the difficulties of CN and CP are tensions with the Lytton First Nation, the indiegenous community devastated by the fire. Officials there have pressured CN to avoid doing any work on the bridge until it’s deemed safe, according to a report from Kamloops-based Radio NL.
CN said it is heeding that call.
“CN has been working with the local authorities and First Nations to allow authorized CN representatives to inspect the area,” CN said. “Once the scope is further established, CN will be in a better position to estimate the time needed for repairs. In the interim, CN is also working to detour limited traffic where possible to decongest the network.”
Rail disruption strains port as it faces container surge
The rail disruption comes at an inopportune time for the Port of Vancouver as it contends with a surge of container traffic. In May, Vancouver handled 39% more twenty-foot equivalent units (TEUs) than a year ago, according to port data.
Hapag-Lloyd characterized the situation at the port terminals as “congested and working at limited capacity” on account of the fire. The shipping line also advised customers that outbound rail capacity at GCT Deltaport, the larger container terminal at Vancouver, had been reduced.
Deltaport’s operator, GCT, declined to comment on the impacts of the rail disruption.
“Our thoughts are with the communities and families directly impacted by the devastating fire in Lytton, B.C., last week, as well as fires in other parts of Western Canada,” a GCT spokesperson said in an email.