On the brink of a rail strike, some companies turn to trucking

On the possible eve of an unprecedented railway stoppage, some logistics firms are enlisting trucks to ship goods that otherwise would've been sent by rail — though there are limits to how much this strategy can help.

Since February, shippers have been eyeing the possibility of a widespread strike and lining up extra trucking capacity, said Stephen Laskowski, president of the Canadian Trucking Alliance.

"[There's] an adaptation by the shipper industry who typically would move freight by rail and now shifting that to truck," he said. 

Calgary-based Jori Logistics started making the shift late last week. Company president Sam Woods said the looming strike primarily affects the ocean container side of the business, which is typically taken to and from port by rail. 

"Already we've had to move a lot of product that was going to be moved on rail to truck," said Woods, whose company transports a range of goods from oilfield equipment to clothing to food and beverages.

"If the strike does happen, then we'll just be forced to shift everything to truck, which will be kind of a mad dash."

On Monday, the union representing thousands of workers at Canadian Pacific Kansas City (CPKC) served a 72-hour strike notice to the railway. CN Rail issued a notice that it intends to lock out workers at that same time unless an agreement or binding arbitration is reached.

As the dispute continues, both companies have already started to scale back shipments in preparation for a possible strike or lockout.

The two companies move roughly $1 billion worth of goods per day, according to the Railway Association of Canada.

There are no easy answers for businesses across the economy trying to figure out what to do with goods that would typically be transported by rail. 

Rail companies typically handle about 66 per cent of the freight in Canada, when both the number of tons and the number of kilometres transported are taken into consideration, according to Fraser Johnson, a professor at Western University's Ivey School of Business. 

"Trucking companies really are designed for short distance and last mile deliveries," said Johnson. 

Jon Finnimore, with FMI Logistics, said his company has also started to transition from rail shipments to trucking shipments for consumer goods, dry foods and industrial products. 

This has come at a cost, he said, given that it's more expensive to ship products long distances on the road than it is by rail.