Failure of Canada’s Intermodal Transportation Network Demands Action

Yesterday CIFFA wrote a letter to the Honourable Marc Garneau, Minister of Transport and the Honourable François-Philippe Champagne, Minister of International Trade asking for the creation of an intermodal marine transportation strategy and escalated deployment of the National Trade Corridors Fund.

Today we are asking all CIFFA members to write to the ministers and we are asking that you send this eBulletin to all of your customers and ask them to write to the ministers. We have created a template letter with all of the names and email addresses so you and your customers need only download the letter onto your letterhead, fill in the blanks and send it.

Enough is enough. Intermodal cargo has not moved efficiently or acceptably in this country since the spring of 2017 and there is no end in sight to the extreme congestion, undue delays and unreliability of Canada’s intermodal movement of goods. The voice of cargo must finally be heard.

We would like to share here some of our concerns with the strategic and long-term future of Canada’s ports, railroads and intermodal movement of goods through the lens of some recent problem areas.

August 2017 – Present:

CN Rail terminal operations at Brampton Intermodal, Edmonton, Calgary and Montreal are severely congested resulting in service delays, exacerbating driver unrest and causing drayage operators to introduce new fees such as ‘wait time’ charges.

September 2017 – November 2017:

CN Rail terminal expansion at Prince Rupert caused on-dock dwell times at the port to spike up from a normal two or three days to two or three weeks in some cases.

October 2017 – Present:

On-dock container dwell times at Port of Prince Rupert and Port of Vancouver have crept up from normal average delays of +/- three days to averages now of + six or seven days. In some instances, containers are resting on the docks up to three weeks. And these ports are the supposed jewels in the crown of our Asia Pacific Gateway and Corridors.

January 2018 – Present:

Increased wait times and limited gate opening hours at the Port of Montreal, as reported by drivers, have caused many drayage operators to introduce wait time charges. Drivers are in short supply and many are unwilling to serve the port.

This untenable situation has been ongoing for months and there are no signs of improvement. The consequences to Canada’s traders, manufacturers, retailers and consumers are considerable. With no predictability in transit times, distribution and delivery costs skyrocket.

While some of the negative impacts of the failure of Canada’s intermodal network are outlined in our letter to the ministers, many of our members and their customers and non-members, particularly from the drayage community have provided additional insights, such as:

Lack of visibility to accurate Information: Has created unpredictability and unreliability impacting importers’ and exporters’ supply chains, making logistics planning impossible. Manufacturing lines shut down, export orders are cancelled, suppliers miss critical delivery deadlines, retailers have empty shelves, consumers will pay more.

Increased Cost – Hidden: Distribution companies, importers, retailers and 3PLs cannot schedule crews to work containers. On a normal basis, a company may schedule labour, trucks and facilities to handle ten containers a day, six days per week for ten weeks. What happens to that labour or those facilities or trucks when no containers arrive for three days and then six containers arrive the fourth day and then suddenly thirty arrive at the terminal the fifth day? With no predictability and no reliability, the costs of labour become unmanageable and distribution centres unworkable.

Increased Cost – Hidden: International freight forwarders, retailers, manufacturers facing two and three weeks’ delay carry additional and often crippling capital costs, cost of inventory, cost of receivables, cost of lost orders, cost of late inputs and cost of lost reputation.

Increased Cost – Fees: The drayage community, faced with increasing unrest from drivers, who are unwilling or unable to wait hours unpaid to access rail and port terminals have introduced wait time charges.

Increased Cost – Fees: Vessels bunch, storms create havoc and congestion builds often causing delays at terminals. As drivers line up in long lines, running out of hours of service, the demurrage and detention clock continues to tick.

Increased Cost – Hidden: Drivers are refusing to serve certain rail terminals as they cannot make a living wage once wait time is added to their run.

Increased Cost – Hidden: Finally, the stress on management and on customer service with in the international freight forwarder community is paying a toll. Canada’s supply chain companies cannot work effectively with extremely low margins with the inconsistency and service levels we have experienced since May 2018.

Canada, once seen as a golden child and contingent option to US ports for American cargo interests has single- handedly lost its reputation as being able to handle critical volume with consistency and professionalism. Publicly traded companies have made reference in their quarterly financial reports that the principle reason for not making their numbers and forecast was in part due to Canadian National Railway’s inability to provide reliable, consistent service. The same can be said for CN’s inability to deliver service on Canada’s west coast container ports.

This shameful situation puts Canada in a negative view internationally. The shine is off the jewels of the Asia Pacific Gateways at Ports of Vancouver and Prince Rupert and action must be taken to return our intermodal marine networks to their former glory. Please add your voice to the chorus by writing to your federal ministers.