Huge volumes of Canadian wheat and canola are stuck at the Port of Vancouver after a major storm struck British Columbia earlier this week, causing flooding and mudslides.
There’s no rail access to Canada’s biggest port after days of torrential rain. About 20 vessels are waiting for deliveries, while a couple hundred thousand tons of grain are stuck in transit, according to Quorum, a company that monitors Canada’s grain transportation system.
It’s so bad that some exporters may even be forced to declare force majeure to avoid penalties as they won’t be able to make deliveries on time, according to a statement by the Western Grain Elevator Association.
Force majeure is a contractual clause that allows deliveries to be suspended due to factors beyond a company’s control, such as natural disasters.
The federal government in Ottawa says that it’s working with industries to reopen Vancouver’s supply chain so that essential goods can be transported, and it has met with representatives of railways, the trucking industry and the Vancouver port authority.
Canada is one of the world’s largest grain exporters and about half of its shipments go through the Port of Vancouver. The disruption comes during the busiest time for grain shipping and as global supply chains are already struggling with congestion and backlogs.
A widespread drought that shrunk Canada’s grain output this year has helped push up crop prices, with canola trading near all-time highs. The drought also contributed to extreme wildfires in British Columbia this past summer, which temporarily closed both main rail tracks and caused a supply chain bottleneck near the Vancouver port.
