Action needed on Supply Chain report recommendations.
Ottawa—Shipper frustration with Canada’s transportation system continues to grow and federal action is needed on the recommendations of the recent Supply Chain report to keep the situation from worsening, says the Canadian International Freight Forwarders Association (CIFFA).
The government needs to address the rising costs of doing business and pay more attention to the congestion, delays, capacity issues, inability to pick up or return containers and mounting fees for demurrage and detention, says CFIIA President Bruce Rodgers.
“Predictions that congestion at rail yards in Canada’s interior would ease this month and next are not playing out so far, prompting frustrated importers and forwarders to ask for government intervention,” he said. “The problems are most pronounced at rail hubs around Toronto and Montreal.”
While CIFFA has tried to promote collaboration wherever possible, “the issues are that there is no longer a supply chain in Canada, but supply links, each operating in a fragmented and siloed approach,” he said. “Until there is a significant commitment to work collaboratively on connecting these links, in the national public interest, these issues will persist, undermining transportation and the supply chain overall.”
There is no one cause or stakeholder solely responsible for the backlog in the transportation system. “This is a complicated and complex issue that requires foresight, commitment, and desire to resolve. Each sector plays a role in the problem, but collectively, we are all part of the solution. We need to connect the broken links in our supply chain.”
The carriers responded to changing consumer buying habits during the Covid pandemic by initially changing schedule routing and bringing an influx of containers into North America, Rodgers said. “This resulted in vessel integrity deterioration, and most importantly exposed infrastructure weaknesses as efforts were made to handle the volume.”
Meanwhile importers built up an inventory surplus due to the uncertainty of product arrival and economic inflationary pressures, which created an inventory surplus that resulted in warehouse overcapacity and utilizing the import containers as overflow storage units.
The railways opened additional temporary container yard locations in order to facilitate the import volumes ultimately resulted in creating additional costs due to moving containers inland. These additional yards are not equipped to effectively store, stack and sort containers, causing additional inefficiencies and pressures, Rodgers said.
That left shipping lines struggling to find locations to receive empty containers, which only served to push the problem to inland rail facilities already struggling to cope with volumes.