Canadian National Railway said it is rationing capacity as “U.S.-bound import volumes have increased noticeably at Canadian West Coast ports.”
Attributing the increase to shippers taking action to protect their supply chain needs in the event of a potential ILWU labor disruption, spokesman Mark Hallman said, “During this short-term bump in volumes, CN and its terminal partners will be striving to ensure that our base-level business, in particular Canadian cargo, will continue to be supported appropriately with car supply and labor such that normal dwell time levels are maintained.”
Stephen Edwards, president and chief executive officer of Global Containers Terminals, said his company’s two facilities at the Port of Vancouver are handling some diverted cargo from U.S. ports. The Vanterm and Deltaport terminals probably won’t handle any extra ships, but there is a higher proportion of intermodal rail cargo bound for U.S. destinations being offloaded from vessels that regularly visit the port, he told American Shipper
last month during a company event at the Port of New York/New Jersey.
CN’s Hallman said the company’s action “is a strategic decision on CN’s part to ensure that our Canadian customer’s needs are protected while the U.S. labor contract is worked through.
A letter from Jean-Jacques Ruest
, CN's executive vice president and chief marketing officer, said, “The supply chain through port on dock rail loading daily capacity and destination terminals requires longer-term asset and infrastructure planning to handle a large, temporary surge in imports.
“Despite this warning, we have seen a major change in rail import volume patterns to the U.S. at both Vancouver and Prince Rupert. This volume has been diverted by ocean carriers either directly or by their customers. Much of the increased cargo has not been identified in the four-week rolling workload forecasts provided to us, further complicating our operating plan and service commitment to our regular customers.
He continued, “The resulting congestion has an adverse dwell time impact on all rail traffic leaving the ports and risks compromising CN’s ability to meet its service obligations to year round customers. The situation has therefore become untenable, and CN has no alternative but to act to address it in a decisive fashion. Accordingly, in order to avoid increased dwell at the port on all imports, CN will be taking action to curtail any further increased discharge of U.S. temporary cargo.”
He said, “CN will establish the U.S. import allocation by carrier and terminal based on regular volume offerings received earlier this year, plus an allotted percentage over and above the ‘normal volume.'"