Resilient Staples: Diversifying Food Supply After Canada's Rail and Port Disruptions

On 22 August 2024, for the first time in the country's history, both of Canada's national freight railways stopped at the same time. The shutdown lasted only days before the federal government ordered binding arbitration, but it showed how thin the margin is in the systems that move food and farm inputs. For importers, distributors and food manufacturers, supply chain resilience is now a sourcing decision, not just a logistics one.

Two disruptions in fourteen months

July 2023, West Coast ports. A 13-day strike shut down cargo handling at the Port of Vancouver, Prince Rupert and other British Columbia ports. Business groups estimated that about C$800 million of trade was disrupted every day, roughly C$10.7 billion in total, with agriculture, potash and food among the sectors hit hardest. Transport Canada estimated the hit to GDP at C$730–980 million.

August 2024, national rail. CN and CPKC together operate about 80% of Canada's rail network and carry goods worth around C$1 billion a day. When both locked out their workers, grain growers estimated losses of C$43 million a day, and the fertilizer industry expected C$55–63 million a day in lost sales. The stoppage was short, but disputes remain unresolved and the risk of repeat disruptions persists.

Why food staples are especially exposed

• Low margins, high volumes. Flour, pasta, pulses, rice, sugar and edible oils move in large volumes at thin margins. A few weeks of delay can wipe out the profit on a shipment.
• Shelf-life and storage limits. Many staples tolerate time better than fresh food, but warehouse space, packaging integrity and best-before dates still impose hard limits.
• Single-gateway dependency. Canada's Pacific gateway handles about 40% of the country's trade outside North America. Importers relying on one port and one rail line have no fallback.
• Price sensitivity. Food inflation has eased from its 2022 peak, but consumers and retailers remain highly sensitive to price. Disruption costs are hard to pass on.

Diversification in practice

Resilience comes from options: more than one origin, more than one gateway and more than one mode.

• Origin diversity. Pairing domestic and North American supply with competitive international producers spreads risk. The Eastern Mediterranean and Black Sea region is among the world's largest exporters of flour and pasta and a major supplier of pulses, dried fruit and processed staples, with growing direct shipping links to North America.
• Gateway diversity. Using both East Coast (Montreal, Halifax, Saint John) and West Coast entry points, and U.S. ports for some flows, reduces exposure to any single labour dispute.
• Contract structure. Contracts that set out how labour disruptions, rerouting costs and delivery windows are handled prevent disputes when something goes wrong.
• Buffer inventory. Holding a few weeks of extra stock of critical staples ahead of known bargaining deadlines is cheaper than an empty shelf.

What this means for clients

• Map your exposure. Know which of your products depend on a single port, railway or supplier, and what happens if that link stops for two weeks.
• Track labour calendars. Collective agreements at ports and railways have known expiry dates. Plan inventory around them.
• Qualify alternative suppliers before you need them. Product specifications, certifications, labelling and food safety documentation take time to approve.
• Price landed cost, not origin price. Freight, duties, handling and risk costs often decide which origin is truly cheapest.

Aquamerge supplies food staples to distributors, retailers and institutional buyers, sourcing from vetted producers and managing documentation and logistics through to delivery.

Sources: House of Commons Standing Committee on International Trade, report on the 2023 Port of Vancouver strike; Argus Media, "Potential strike threatens Vancouver port again" (2024); AgWeb, "Canadian Rail Workers Are Back To Work" (Aug 2024); The Logic, rail lockout coverage (Aug 2024); Fertilizer Canada statement (24 Aug 2024).