Congestion at ports and inland terminals across Canada remains an ongoing hurdle for both importers and exporters, anxious to receive their shipments or move cargo abroad. The Ports of Vancouver, Halifax and Montreal continue to struggle with excessive volumes, resulting in the delay of cargo moving to inland terminals by rail and creating issues for exporters trying to connect with departing vessels.
In terms of imports, once cargo does arrive at destination terminals, issues related to drayage persist, as cartage companies are also having difficulty efficiently handling the increased cargo volume. Most cartage companies are overbooked and are only able to schedule deliveries 1-2 weeks from arrival date, and because of the long waiting time at terminals, they are increasing fees to offset higher costs. As a result, shipper’s costs are increasing, as their shipments are subject to a myriad of additional fees, such as waiting time, rail/yard storage, demurrage and chassis detention fees.
The drayage situation is being exacerbated by a shortage of cartage carriers, which are not able to evacuate containers out of the terminals in an efficient manner. One of the reasons for this is many owner operators are moving away from unprofitable intermodal deliveries to more lucrative options such as seasonal construction deliveries. Coupled with this, specialized equipment such as gen sets, which power reefer containers, are in such short supply that deliveries for these containers can be delayed by weeks. Finally, returning empty containers once offloaded by the consignee is also becoming an issue, again related to high volumes on hand affecting the continued flow of cargo.
For exporters the main issue relates to maxed out rail receiving terminals and very limited return time slots for loaded export containers. As a result, in many cases cargo is missing scheduled sailing times and incurring additional costs, related to storage and demurrage, as cargo is booked to subsequent vessels.
How this situation plays out over the coming months is anyone’s guess, but there does not seem to be any relief in sight, as we are approaching the busy summer/fall peak season for international cargo. With even more cargo entering an already compromised logistics chain, the issues are expected to persist at least for the near future.
For more information, contact David Lychek, Director – Ocean & Air Services
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