Canadian Forestry Industry Loses Millions to Rail Issues
The forestry products industry lost an estimated $500 million so far in 2018 due to railroad service issues, including lack of capacity and delays, according to Derek Nighbour, CEO of the Forest Products Association of Canada (FPAC). Issues include priority given to transport of oil and grains as well as weather-related delays.
Eighty percent of pulp and lumber mills are reliant on only one railway to transport goods to market, either Canadian National (CN) or Canadian Pacific (CP), depending on the mill location.
CN alone ordered 200 new locomotives in December 2017 and another 60 in September to keep up with demand. The railroad reported that North American demand is up 3.5% over 2017.
Last June, to help address rail delays, the Canadian government amended its Transportation Modernization Act, Bill C-49, requiring CN and CP to provide detailed plans to provide more reliable service during winter months. See FPAC and iPolitics