British Columbia floods continue to affect snarled supply lines

Canadian supply chains are struggling under the weight of recent floods in British Columbia that closed highways and cut off rail access to the Port of Vancouver, the country’s largest port and a major commercial gateway serving businesses and consumers nationwide.

Heavy rains that began in mid-November have eased, but local officials say they continue to assess the extent of the damage to the region. A state of emergency is in effect through December 14.

For now, the resulting supply chain problems are isolated to central and western Canada, but the situation could cause more widespread problems, according to Glenn Koepke, a senior vice president at supply chain technology firm FourKites, which is tracking the delays across truck, rail, and ocean lines. Slow rail lines are causing backups and delays at the Port of Vancouver as cargo is slow to move off the docks, worsening existing delays from already stressed global supply chains. As of early Monday, 80 vessels were at port in Vancouver, 28 of which were at berth, waiting for a slot to open so they could be unloaded.

“Right now, port throughput is something we are watching. We will likely see further delays of ships being offloaded until full rail lines are restored,” Koepke said. “And space will likely become a major constraint, too.”

Port officials said they are working to secure additional container storage capacity to ease supply chain constraints and bottlenecks. That includes preparing a 40-acre site for temporary handling and storage of empty containers, a project they said they will be working on over the next few weeks.

FourKites tracked a 15% spike in delays of containers coming into the Port of Vancouver in November compared to the previous two months, and also noted slowing on-time performance data. The on-time proportion of container shipments at the port dropped nearly 40% the week of November 14, when the flooding began, and although it has since improved it was still 15% below the three-month average of 67% as of early December, Koepke said.

Both Canadian National Railway Co. and Canadian Pacific Railway Ltd. have restored some service to the region, with Canadian National saying it had resumed rail movement in a crucial corridor to the region over the weekend. Koepke said it’s likely to take another two weeks or so to fully restore conditions and relieve backlogs, barring any further weather problems or other disruptions—which could cause ripple effects in the United States. If the constraints continue, Canadian importers may seek to divert cargo through U.S. ports and then via truck into Canada.

“So, we could see increased volume at U.S. ports and increased traffic at northbound border locations,” he said, compounding existing supply chain backups along the U.S. West Coast.

If problems persist, exports could be affected as well, making it difficult for Canadian companies to ship their products out of the country.

“If this were to extend, there is a commercial impact, if Canadian companies can’t get their products out,” Koepke said, adding that the weather forecast is a major factor. “We’ll know more by the end of [this] week.”

Light snow is forecast throughout the region early this week, a factor that may affect trucking operations in and out of the Port of Vancouver.

“Many of the roads have begun to re-open, but with many restrictions such as size of the vehicle or weight of the vehicle as well,” Koepke said. “The weather is calling for a wintery mix with rain potential after the snowfall. This will continue to put many parts of the region on high alert and will continue to have a potential impact to truck traffic for long haul trips to and from the Port of Vancouver. The port is continuing to operate with minimal waiting times for trucks, but the challenge is getting through the region with commercial vehicles.”