While the Canadian federal government is stepping in and sending the rail dispute with workers from Canada's two major railways–the Canadian National Railway Co. and Canadian Pacific Kansas City Ltd.--to arbitration, there's no word yet as to when trains will get moving again. In the meantime, yesterday, Canadian produce growers and shippers expressed concern about logistics.
Moving fresh produce across the country is largely done by trucks–particularly on more perishable, shelf-life-sensitive items such as grapes, peaches, berries, and more. Meanwhile, onions, citrus, or apples which have longer shelf life, are sometimes shipped via a mix of truck and rail. "We do everything we can to avoid rail generally," says Sandro Saragiotto of Offshore Canada Logistics Inc. who works with North American Produce Buyers (NAPB). "Though the rail strike means the demand for trucking is increasing and then the rates for trucking increase. I depend on trucking to move fresh produce and I know it will impact our current rates with the trucks." He adds that later yesterday, trucks were already increasing rates for export business.
"For our shipping agents it has increased trucking rates 30-40 percent, has affected local availability and I am hearing some cases of inputs (packaging specifically) being stuck on the rail," says Sarah Marshall of Ontario Tender Fruit/Fresh Grape Growers.
Photo: Canadian National Railway Company
Geographic pressures
As Saragiotto notes, some trucking companies are used to shipping a certain line–Ontario to the East Coast for instance. "Maybe though a shipper will say now–hey, I need to take this load to California or Texas and they will pay extra money to do that because there's not enough drivers. That would take the capacity from the East Coast to a different line. So that's my concern–how it's going to affect capacity for some lines," says Saragiotto.
These pressures on trucking began already as of last week as the looming strike increasingly made headlines across the country. "It hasn't affected the trucking rates yet but if the demand is going to keep increasing because of it, that will happen," says Saragiotto.
At the same time, those shipping other types of cargo by rail may also be turning to trucks to move product. "We don't ship apples by rail–but the grain industry ships by rail and they may want to be shipping wheat at the same time we want to ship apples and that puts all the trucks on the road tied up by another crop," says Brian Rideout, the chair of the Ontario Apple Growers.
Photo: Canadian National Railway Company
Costs and shipping of inputs
Rideout also has other longer-term concerns. "A lot of our inputs come by rail such as fertilizer and fuel," he says. (The Ontario Federation of Agriculture reports that Canada moves over 95 percent of its grain and 75 percent of its fertilizer by rail.) "Whatever comes by rail is now going to cost the suppliers money because they're not able to ship. So for input costs now for 2025, they could go up and you have to be ready for another hit."
Saragiotto is thankful in some way for the timing of this situation. "Right now, my fresh produce is mostly being produced in the U.S. and Mexico. If this rail strike had happened in the winter, that would have had a bigger impact here," he says, adding for example that a load of lemons coming in from Argentina yesterday had no rail shipping option. Instead, the shipment had to be shared between two trucks loading in Philadelphia which in turn, adds more costs.
For more information:
Sandro Saragiotto
Offshore Canada Logistics Inc.
https://offshorecanada.ca/
https://www.naproduce.com/
Sarah Marshall
Ontario Tender Fruit Growers
www.ontariotenderfruit.ca
Brian Rideout
Ontario Apple Growers
www.onapples.com