(Ottawa) The country’s transportation supply chain has been so battered over the past two years by the COVID-19 pandemic, natural disasters caused by climate change and war in Ukraine that it is approaching breaking point.
Posted at 10:22
A major overhaul is needed from all players – the federal government, the provinces and private sector companies – to prevent Canada’s reputation as a reliable trading partner from being further tarnished with investors, and countries like the United States.
This is the brutal observation made by the national task force on the supply chain which submitted its final report to the Minister of Transport Omar Alghabra on Thursday. This task force, which was set up by the minister in January, proposes a package of measures that must be implemented quickly so that the supply chain “can withstand shocks and adapt to fluctuations in demand and the dynamics of international trade”.
For the members of this working group, co-chaired by Jean Gattuso, former CEO of Lassonde Industries, and Louise Yako, former CEO of the BC Trucking Association, the country’s prosperity depends on it. Especially since the disruptions come at a time when Canada’s natural resources, including critical minerals, are in high demand globally.
“Canada’s transportation supply chain is a cornerstone of our economy that directly and indirectly impacts our prosperity and quality of life,” says the task force in its 56-page report titled simply: “Action . Collaboration. Transformation”.
“Canada’s standard of living is directly linked to our success in international trade and therefore to the performance of our transportation system.”
The public and private sectors will also have to make colossal investments in maritime, road, rail and air transport assets by 2070. According to a study conducted by the firm Deloitte for the task force, the investments required over the The next 50 years will have to come close to 4.4 trillion dollars, or the equivalent of 88 billion dollars per year.
In the immediate future, measures can be implemented to strengthen the chain. Among other things, Ottawa must take steps to reduce container congestion in ports, even if it means subsidizing the cost of transporting them inland – as the United States Department of Agriculture does – until congestion is over and container terminals can resume normal operations.
The current congestion, which could lead to closures, is due to the very high volume of import containers in Canadian ports that do not have sufficient storage space. The task force also recommends extending the 30 km interconnection distance across the country to give shippers more rail options.
The labor shortage is also hitting this sector of the economy hard. The solution lies largely in immigration. Ottawa should thus speed up the processing of refugee status and immigration applications for people with experience in companies linked to the supply chain.
“The transport sector suffers from a severe labor shortage, especially in the rail and road sectors,” the report argues. A record 25,560 truck driver positions were vacant between January to March 2022, according to Trucking HR Canada.
The report group also recommends digitizing the supply chain so that a customer can know where the goods are at all times. Canada lags behind in using technology to improve freight transportation. “There is an urgent need to focus on digitalization to compete internationally and become a global leader.”
For its part, the federal government should create and adequately fund an Office of the Supply Chain which would oversee the monitoring of progress in implementing the necessary changes.
It is also recommended that the four-laning of Route 185 linking the provinces of Quebec and New Brunswick be completed as soon as possible. The project is ongoing, but its completion will create a link between two parts of the road that are open to long combination vehicles. Currently, drivers of these road trains must disengage one trailer, haul the other six kilometers, return to the remaining trailer and re-position it to complete their journey.
The provinces should also harmonize the rules surrounding transportation and trucking.
In an interview with The Press, Transport Minister Omar Alghabra said that this file is the absolute priority for the coming months. He indicated that he will introduce a bill this fall to modernize the governance of ports in the country and will focus on the digitization of the supply chain in the short term.