It’s well past time for the barricades to come down
Rail blockades imposed their own deadline
As a blockade near Belleville, Ont., brought CN’S trains to a halt throughout Eastern Canada, City of Toronto officials said local water purification wouldn’t be affected. The chlorine comes by truck.
Good to know. But where do the trucks pick up the chlorine? And how does it get there?
There’s an old truism about military studies — “Amateurs talk strategy, but professionals study logistics.” Millions of us may soon have good reason to be talking logistics. As the rail blockade of CN’S line moves well into its third week, cracks are starting to appear in Canada’s logistics network. While the railroad looms large in Canadians’ understanding of their early history, its place in our notion of travel has been bumped out of the public’s eye by the car, the truck and the jet. But railways remain essential — the country cannot function without its rails.
In a series of interviews this week, National Post tried to determine the extent of the blockade’s impact. Much of the coverage has focused purely on economic metrics — the value of undelivered commodities, costs incurred by CN, the number of layoffs. But CN moves everything, or at least moves the stuff needed to build, package and distribute everything. The entire economy relies on billions of moving parts. They can’t be inventoried.
Still, one thing is clear: for a variety of reasons, including a dispersed population and a transportation network that’s more reliant on a few key arteries, Atlantic Canada will feel the pain first. Ontario and Quebec, with their larger and more complex transportation networks, have more ways to adapt to disruptions.
As has been widely reported, propane is one such problem. Propane is widely used for home heating in the Maritimes, where natural gas networks are more limited than in Ontario and Quebec. Propane also heats barns to prevent livestock from freezing to death. But the local demand far outstrips supply, which is met by rail delivery. On Friday, Quebec ordered rationing of propane, and the Canadian Propane Association reported that the situation in Atlantic Canada was critical, with supplies at record lows. Trucks were being sent to Sarnia, Ont., where propane is produced, to supply Atlantic Canada, but that’s not sustainable, the association warned.
Another concern is food. Much of the food stocked in supermarkets is delivered by truck. Trucks, though more expensive than trains, are faster and more flexible, and well-suited to deliveries of fresh meat, dairy and produce. But rail is a vital link in the supply chain for grocery stories. In an interview with National Post, Karl Littler, of the Retail Council of Canada, described the country’s food distribution network as a tree. “Trucks are the branches,” he said. “They reach out in all directions, delivering food to distribution centres and then on to your local grocery store. But the trunk of the tree is rail. That’s where the heavy volumes are moved.” There isn’t a good understanding precisely how much of the country’s food is moved by rail vs. truck, he said, and noted that between this blockade and the threat of a CN rail strike last year, that’s something the food industry needs to pay more attention to.
“But it’s big,” Littler said. “It can get complicated because of how intermodal logistics has become — cargo goes from ship to truck to train to truck to van, so do you count that as rail or truck? — but the rail contribution to our food supply is big. I don’t have an exact number, but as much as 50 per cent wouldn’t surprise me.”
“DCS — distribution centres — always have some stock on hand, in case of inclement weather or a traffic jam,” Littler added. “But the food industry has moved more to just-in-time delivery. If you’re near a source of food production, or a border crossing, or if you have good local trucking assets, you’ll hold out longer. But that’s not everywhere in the country. Atlantic Canada has particular supply challenges.”
There’s a further wrinkle. As noted above, setting aside the complexities of a fully intermodal system, rail and trucks move different types of food. Littler stressed that it was not a bright, stark division, but in general terms, fresh foods are moved by truck, but processed, frozen and dry bulk foods are moved by rail.
And that poses a very specific challenge. Sylvain Charlebois is a professor at Dalhousie University in Halifax and an expert in food production, distribution and security. The kinds of processed, frozen and dry bulk foods moved largely by rail, he noted, are the most affordable food. Wealthier Canadians can enjoy the benefits of a diet rich in fresh meat, produce and dairy. Those on lower incomes buy more processed, frozen and bulk foods. The effects of the blockade will hit them first and hardest.
It’s already started, Charlebois believes. “I’ve already noticed some items missing from shelves” in Atlantic Canada, Charlebois said in an interview. “I can’t definitely link them to the blockades because the distribution system is complex. But why are we running out of ketchup in February? What’s causing this?”
He stressed that this is actually a good time of year for these kinds of disruptions. Right now much of the actual food supply is coming from warmer climates, so the problem is distribution, not production. And February is a relative low point during the year for grocery sales. “December, around Christmas, and during the summer, that’s when sales are high,” he explained.
“February is slower. Diesel is cheap, the Canadian dollar is stable — this is letting us absorb some of the impact. But food prices could still spike 30-50 per cent. This is a food security issue for low-income families.”
Asked how long the CN disruption could last before it became a food security issue for all of us, with shortages causing an actual emergency, he sighed. “I don’t think we’re there yet,” he said. “But in another two weeks? This will hit a critical point.”
A major challenge are the secondary effects of the blockade. The idling of much of CN’S network in Eastern Canada means that containers that arrive in our major eastern ports of Montreal and Halifax can’t be moved out. That’s congested the ports. In a statement to the Post, a spokeswoman for the Port of Montreal said that distribution to destinations in Quebec are largely unaffected, as that relies on trucks. But distribution to Ontario is a huge problem, and 4,000 containers are immobilized. Lane Farguson, of the Port of Halifax, told National Post that shipping containers are accumulating there, and while the situation is manageable, it’s becoming more challenging. Halifax moves 60 per cent of its cargo out via rail. Some shipping lines have begun diverting to U.S. ports to unload their cargo. The trucking fleet, meanwhile, is also trying to adapt, but there simply isn’t the surge capacity to replace the hundreds of millions of tonnes CN Rail moves each year.
Some adaptation is possible. CN has already got some trains moving in Ontario on other tracks. Some essential goods can shift from rails to roads. Propane is already being rationed in Atlantic Canada; food could be, too, though it would be interesting to see a government that can’t figure out how to pay its own employees impose a rationing system on short notice.
But there are limits to how much can be shifted, and each shift has a cost. Every truck shipping baby formula to Moncton, N.B., isn’t hauling trade goods to export markets. And even after the blockade has ended, it will take days — no one knows exactly how many — to restart the trains and clear the ports. Resolving this the day before the propane and food supply is exhausted isn’t good enough.
That’s why repeated claims by federal officials that there was no need to impose a deadline to clear the barricades were so ludicrous. The blockades imposed their own deadline. Considering the time necessary to restore the normal movement of supplies, the prime minister may have decided that deadline has been reached. His remarks on Friday were blunt: Time was up.
So now we wait to see what happens. And hope that new blockades don’t replace any that are cleared.
THERE IS A DIFFERENCE BETWEEN INCONVENIENCE AND INJUSTICE — TOTAL DIFFERENCE. DON’T CONFUSE ONE WITH THE OTHER. — HEREDITARY CHIEF WOOS, ALSO KNOWN AS FRANK ALEC, OBJECTING TO THE PM’S COMMENTS THAT BLOCKADES ARE CAUSING CANADIANS TROUBLE