18.
11.21
15:07

Vancouver hinterland: Infrastructure destroyed by heavy rainfall

Canadian commodity exporters ranging from grain and fertilizers to oil yesterday attempted to divert supplies from the port of Vancouver, which has been isolated by flooding in the hinterland. But they found few viable alternatives.
The catastrophe, in which at least one person was killed, has caused the latest deadlock in the overloaded global supply chain and fueled inflation fears ahead of the Christmas season.
On two days there was as much rain as usual in the whole month. That led to floods and mudslides in British Columbia that destroyed highways and two critical east-west railroad lines owned by the Canadian National Railway Co and the Canadian Pacific Railway to Canada's busiest port.
The Trans Mountain oil pipeline and part of a gas pipeline have been closed as a precaution.
"This western corridor is our lifeblood," said John Brooks, CP's chief marketing officer, at an investor conference Tuesday. "Almost all raw materials flow through it to some extent."
Vancouver's port moves cargo valued at CAD 550 million (€ 387 million) every day, from automobiles to consumer goods to raw materials.
Alternatives include diverting raw materials to the northern port of British Columbia, Prince Rupert, the Pacific Northwest, or across the continent to eastern Canada.
The clock is ticking. The Vancouver port manager said it expected ships to anchor longer while waiting for delayed cargo, a situation that usually results in shippers paying demurrage for the extra waiting time.
Buyers can also charge penalties for late deliveries, adding to the urgency of finding alternatives.
"Everyone looks at it," said a Canadian grain dealer.
Even if the railroads can make repairs and restore service in a matter of days - they haven't given any schedules - the delays will stretch for up to a month, given the backlog of shipments to process, a second grain industry source said.
The Prince Rupert Grain Terminal, owned by Richardson International, Viterra, and Cargill Inc.is already busy with exports, which limits its capacity to handle larger volumes, said Wade Sobkowich, executive director of the Western Grain Elevator Association.
Canola futures for the January delivery fell 1.5% as traders complain of transportation problems due to the flooding.
Teck Resources, a copper and coal mining company, said in a statement it would reroute trains from Vancouver to a Prince Rupert terminal.
Canpotex Ltd, the potash export company of Nutrien Ltd and Mosaic Co, will ship more of the fertilizer through its smaller terminals in Portland, Oregon and Saint John, New Brunswick, spokeswoman Natashia Stinka said.
The Trans Mountain closure means approximately 300,000 barrels of oil and refined products are starting to fill storage tanks or relocate every day.
The main alternatives are moving oil east on the mainline from Enbridge or south by train to the United States, said John Zahary, CEO of Altex Energy, which owns rail terminals in Alberta and Saskatchewan.
"The supply chains are so tight these days that when something happens, panic and wrangling arise," said Zahary.

Source
Hansa Terminhandel GmbH
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