Hampered rail car facility take a hit on Canadian lumber producers

VANCOUVER (Scrap Monster) : The Canadian lumber producers are reported to be badly hit by the rail shortages at a time when US demand is at its peak, thus failing to take full advantage of the situation.

The Canadian lumber producers who have been undergoing rough patches for many a year are reported to be upbeat following the rising US housing starts recently. The companies complain that they are unable to take fullest advantage of the favorable situation mainly because of shortage of rail cars for shipping their products.

The lumber producers in Western Canada, Ontario and Quebec complained that they were unable to meet the contract dates of shipment due to excessive and unprecedented rail shipment delays. There are several incidents of cancellation of contracts which has led the lumber companies run into heavy losses.

The pickup in US Housing market has obviously resulted in increased number of new orders for lumber, strand board, plywood, pulp and other products. The two primary service providers-  Canadian National Railway Co. and Canadian Pacific Railway Ltd. are reported to be unable to meet the increased shipment requirements.

The lumber producers urged the service providers to provide with more number of rail cars to ship their products in time. The shortage of transportation facilities has affected the offshore deliveries from ports.

Canadian National Railway Co. officials state that the number of rail cars allotted is purely based on the shipment forecast by the lumber producers. The excessive US demand for lumber products was not even predicted by the forestry industry. As a result, the number of ordered cars is not sufficient to meet the shipment demands. Moreover, the terrible winter has also played its part. Meanwhile, all efforts are on to add more rail cars to the existing fleet.

On the other hand, the forestry industry complains that the service providers have failed to provide even the ordered rail cars. Some producers are even forced to utilize other modes of transport such as trucks to ship their products, which doesn’t seem to be a feasible solution both in terms of time and money.