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Backlog in Grain Shipments due to Wildfires Points to Emerging Challenge for Canadian Dry Bulk Shipping

Significant delays are afflicting shipments en-route by rail to Canada’s west coast, as thousands of rail cars are backlogged due to wildfires in southern British Colombia (BC) active since late June. Beginning on July 09th the Canadian government ordered a 48hr halt to train movements in BC due to damaged rail Iines as well as to reduce the risk of sparking additional wildfires. While CN and CP rail were reportedly able to resume some traffic through the area this week, according to the Ag Canada Coalition, a consortium of Canadian grain producers, it “could take weeks” for the transport situation to return to normal operating capacity. There are also reports that rail traffic has once again been halted as fires are still active in Southern BC and so the situation remains uncertain.

Beginning in June a  “Heat Dome”, or high pressure area which traps hot air over an expansive area, descended upon Canada’s western provinces and parts of the western United States. Across British Columbia all-time high temperature records were broken— and then re-broken as temperatures continued to climb to unprecedented levels. The small town of Lytton, through which both CN and CP rail lines pass, experienced the highest temperatures ever recorded in Canada for 3 consecutive days, eventually reaching 49.5C on June 29th. Only one day later, on June 30th the town was destroyed by wildfire which also caused significant damage to the rail lines in the area. These high temperatures have created extremely dry conditions throughout the province and there remains an elevated risk of wildfires.

There has been speculation that the wildfire which destroyed Lytton was sparked by rail traffic in the area. While an investigation into the causes of the fire is ongoing, the Transport Ministry ordered the halt in rail traffic as a preventative measure. This enforced stoppage, as well as the damaged tracks in the area, has created a backlog of thousands of rail cars carrying goods west.

In 2019, approximately 107 million mt of commodities were carried by rail into British Colombia from points of origin across Canada. As the below map illustrates there are only 2 rail lines through southern BC, both of which have been affected by fires in the area. This has created a bottleneck and transport companies have few options for detouring the freight heading west.

Map of Rail lines in Lower Mainland BC

Adding to the backlog the Canadian government has also announced speed restrictions during periods of high temperatures and increased fire risk across Canada as a further preventative measure. While CP and CN rail may be able to move some freight through the wildfire-damaged region in the coming days, if speed restrictions are imposed it will inevitably prolong the backlog of freight waiting to be moved.

In recent years wildfires have perennially made headlines, internationally in the western United States and Australia, and also across Western Canada. Many researchers have identified climate change as a key factor in creating the conditions which are conducive to wildfires and over the years to come wildfires are expected to become even more frequent and severe. The recent delays in rail shipments point to a larger vulnerability in Canada’s export supply chain given its reliance on railroads to transport goods from the prairie provinces of Alberta and Saskatchewan to the west coast for export. In the future the Canadian government in cooperation with the major rail transport companies will need to implement policies to address the risks to Canadian exports posed by wildfire disruptions.

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