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Thursday, June 8, 2023

B.C. storm hits already unstable supply chains

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The aftermath of the storm in B.C. that saw untold damage to highways, homes and infrastructure is the latest blow in a long line of supply chain issues for the province and Canada.

Days of intense rainfall led to mudslides, rockslides and severe flooding, as winds toppled trees and power lines, leaving thousands of residents in the dark.

One woman was confirmed dead and her body recovered from the mudslide that happened Monday at Highway 99 near Lillooet.

All highways in and out of the Lower Mainland have experienced various levels of closure, with major routes connecting the Lower Mainland to the Interior blocked.

Sections of the Coquihalla Highway have been severed and washed away, with the BC Ministry of Transportation and Infrastructure tweeting Tuesday that work to assess damage continues across the province.

All the damage, including the washing out of rail lines and closure of transportation routes, is the latest blow for supply chains in the province, with a knock-on effect to the rest of the country, said professor Johnny Rungtusanatham, Canada Research Chair in supply management at York University’s Schulich School of Business in Toronto.

“Even before the storm, supply chains globally have been under stress from before COVID-19. COVID-19 just sort of exposed the fragility of global supply chains,” Rungtusanatham said in a telephone interview with CTVNews.ca Tuesday.

Rungtusanatham cited the “spill-over effects” of people being out of work due to the pandemic, the blockage incident at the Suez Canal, lack of shipping containers and delivery driver shortages all contributing to “an escalating set of events which put continued stress on goods being moved.”

“The flooding in British Columbia and the isolation of Vancouver sort of adds on to the distress,” he said. “With the Port of Vancouver being such an important entry point for Canadian goods…anything that’s going through that has been successfully unloaded is now waiting to be distributed from Vancouver to other destination points throughout Canada is sort of on hold until the flooding recedes, until assessments can be done.”

At a media briefing Tuesday afternoon, B.C. Minister of Transportation and Infrastructure Rob Fleming said that the provincial government is working with Transport Canada to re-open supply chains once safety and damage assessments are done .

Rungtusanatham said B.C. authorities will have to assess whether the roads can be safely travelled, whether rail lines are clear and how to prioritize the goods waiting to be transported across the country.

“There’ll be delays in goods coming into the Port of Vancouver and there’s a domino effect when the port isn’t able to unload things onto trailers and containers — that means ships are waiting to unload,” he said, calling it a “domino effect.”

“I expect that the delays that we have been talking about even before the storm might actually get a little worse,” he said. “If the delays translate into somebody else basically paying for goods not moving, you know, then this cost may be further passed on to consumers.”

In an emailed statement to CTVNews.ca, a spokesperson for the Port of Vancouver said flooding had severely affected their operations.

“Vessel delays and heightened anchorage demand are expected due to disruptions to terminal operations,” the statement said. “We are working closely with our terminal operators, railways, and all levels of government to understand the impacts of these delays on terminal operations and to develop a recovery plan.”

The Port of Vancouver moves crucial goods to Canada’s industries, like lumber, fertilizers, electronics, coal, textiles, animal feed, canola, machinery, jet fuel, chemicals, minerals, meat, fish and poultry.

A September report from the Port of Vancouver said more than 14 million tonnes of goods had been imported and more than 62 million tonnes of cargo had been exported in June of this year.

The statement said all rail service coming to and from the Port of Vancouver was halted because of flooding in the B.C. interior, and that no rail traffic is possible between Kamloops and Vancouver.

Both Canadian Pacific Railway and Canadian National Railway confirmed in separate emailed statements to CTVNews.ca that their networks have been impacted by the storm, echoing the Port’s statement.

CP Rail said it is experiencing a “track outage” north of Hope, B.C., and CN Rail said in its statement that mudslides and washouts have hit their network.

A CN Rail train with a CP locomotive derailed Monday outside the town of Yale, B.C.

“Crews are inspecting the affected areas and carrying out repairs which are critical to the passage of railway traffic through southern B.C. The repair work is progressing safely, but northbound and eastbound traffic from Vancouver, as well as inbound to Vancouver from east/north of Kamloops continue to be impacted,” the statement said.

Rungtusanatham said the storm may have upset progress Canada made in stabilizing supply chains since the pandemic hit.

“With this ongoing situation, it’s critical that roads and transportation be re-established as quickly as possible because the only other option is either you reroute, drive through U.S. and then come back up to one of the land ports or… if you have critical goods that you have to fly them. That is a huge expense,” he said, adding that the country is already seeing an increase in demand going into the holiday shopping season.

Rungtusanatham said prior to the situation unfolding in B.C., talk about when supply chains may revert back to normal had timeframe estimates around “mid-summer in 2023 at the very earliest to probably 2024.”

But it is not an exact science, as “there are many things we don’t control,” he said.

“I would be foolish to try and tell you that we have a rosy picture,” he continued. “All I can say is that we’re all going to have to exercise a little more patience.” 

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