As Canada braces for rail stoppage, truckers scramble to meet demand
TORONTO — As Canada braced for a freight rail stoppage that could hit industries ranging from autos to agriculture, the trucking sector said it faced higher demand it could not meet. Unless labor agreements are reached, Canadian National Railway and Canadian Pacific Kansas City — which hold a duopoly — plan to indefinitely halt operations on Thursday at the same time, marking a first. Canada relies heavily on railways to transport goods and commodities, but trains are already winding down in anticipation of a strike or lockout. Daman Grewal, a senior operations manager with British Columbia-based Centurion Trucking, would normally expect 20 or 30 online postings from shippers seeking trips east across Canada on an August Monday. On Monday morning, he saw more than 500. “Last week is when a lot of the panic started to set in,” said Grewal, noting trips for which he charged C$7,000 ($5,139) a few days ago now cost up to C$9,000. “Similar to COVID, you see the scarcity in supply chain.” Grewal said Centurion could increase capacity 10% to 20%, largely by reducing driver downtime. “We would just have to turn the drivers around a little bit quicker,” he said.
Industry officials said some softening in the economy has left room to increase capacity but not enough to make up for idled railways. Some rail shippers have been trying to book additional truck capacity since February ahead of a disruption, said Alberta Motor Transport Association president Robert Harper.
“The industry can help out in the short term in reallocating assets, but in the long term you simply cannot replace long-haul rail distribution. Because in some cases, the industry doesn’t have the equipment nor the capacity,” Harper said.
U.S. freight forwarder C.H. Robinson estimates 85% of U.S.-Canada cross-border road freight in either direction is handled by Canadian trucking carriers.
The severity of the disruption, should it occur, will be a factor of how long it lasts, said Joseph Towers, a senior rail analyst at FTR Transportation Intelligence.
