News / Canadian National shuts down part of its network as protests block the rails

© Robert Philip

Yesterday Canadian National (CN) announced it had shut down an entire section of its network, affecting the rail company’s operations east of Toronto, and all its transcontinental train services.

The decision followed a week of blockades that forced the cancellation of hundreds of trains of Canada’s largest rail operator.

Protesters set up blockades in Eastern Ontario, Manitoba and British Columbia in support of the indigenous people’s views against construction of a pipeline through their territory.

CN said despite adjusting operations, the disruption to its services had reached a level where drastic action was needed.

“With over 400 trains cancelled during the last week and new protests that emerged at strategic locations on our main line, we have decided that a progressive shutdown of our eastern Canadian operations is the responsible approach to take for the safety of our employees and the protesters,” said CN president and chief executive JJ Ruest.

“This situation is regrettable for its impact on the economy and on our railroaders, as these protests are unrelated to CN activities and beyond our control.

“Our shutdown will be progressive and methodical, to ensure we are well set up for recovery, which will come when the illegal blockades end.”

The blockade in British Columbia has severely hit services to the port of Prince Rupert. The port authority reported that some terminals started halting operations on Monday, while others were processing cargo at reduced speed. By Wednesday, container dwell times were approximately 4.5 days, up from an average of less than three.

The port of Vancouver has posted dwell times of five-to-seven days, up from an average of two-to-three.

“Imports are not getting through. Warehouses in Montreal are half-empty because import containers are not coming,” said Karl-Heinz Legler, general manager of Rutherford Global Logistics.

The Canadian Chamber of Commerce has called the disruption a national emergency, affecting Canadian firms’ supply chains around the world. The Forest Products Association of Canada estimated that its members had lost tens of millions of dollars so far,and called the situation “a real crisis”.

However, for others the experience has so far been less dramatic.

“We are not too affected at the moment,” reported Michelle McCaughan, senior director, sales & operations at AGO Transportation, hours before CN announced the eastern shutdown. The company had experienced some small delays in ocean imports, but cargo was still moving, she added.

CN has obtained court orders to end the blockades. According to the company, one in Manitoba has been dismantled and the blockade in British Columbia may be ending shortly, but in Ontario the court order has yet to be enforced as it has been ignored by protesters.

The Canadian Manufacturers & Exporters Association, whose members load about 4,500 rail cars a day, has called on the government to work with law enforcement to take the appropriate steps for rail services to resume.

Ottawa looks unlikely to step in decisively, though. A meeting with representatives of the Mohawk First Nation is planned for Sunday, and the federal transport minister has stated that he was working with his counterpart in the Ontario provincial government. However, he signalled that law enforcement is a provincial matter.

Mr Legler doubts the blockade will end soon: before long, ports will likely start levying storage charges, he said.

As delays get longer, some shippers may try to switch their cargo to the road, but for the most part, trucking is not a viable alternative, given the steep difference in rates.

“You can truck a container between Quebec and Ontario, but for the longer distances it’s too expensive for most commodities,” he said.

If the blockade lasts, shippers may consider alternative routings, possibly moving their cargo over US ports, he added.