Boom and bust

by Carroll McCormick

BLOOM LAKE, Que. — When work began on Labrador’s $7-billion Muskrat Falls hydro-electric project in 2013, who could have guessed that two years later, two iron ore mines in Wabush and Lac Bloom (Bloom Lake) would close, throwing a reported 1,000 people out of work?

The mine closures have stung carriers, but the action at Muskrat Falls, 500 kilometres east of Wabush, near Happy Valley-Goose Bay, is a welcome consolation.

Wabush sits just across the Labrador border from Quebec. Bloom Lake is 40 kilometres southwest of Wabush, on the Quebec side of the border.

“Muskrat Falls is saving our asses,” said one carrier manager.

“For TST the two mines were not our main customers,” says Javier Iturriaga, terminal manager, TST Overland Express, for Wabush, nearby Labrador City and Happy Valley-Goose Bay. “For us it wasn’t a direct impact, but for all the transport companies, it is all the business related to the companies; for example, machinery, food for the camps, grocery stores. Where we used to move seven trailers a day we are now moving three or four. We are starting to see business go down, but we are getting more business from Goose Bay. There is a lot of work around Goose Bay. We are working too with Muskrat Falls.”

TST has a five-door terminal in Lab City, and a three-door terminal in Happy Valley-Goose Bay.

According to Iturriaga, carriers have moved 3,500 containers to Muskrat Falls in the last two-and-a-half years. “For wide loads and flatbeds there has been a 40-50% increase. In the beginning (of the Muskrat Falls construction) it was 200% more.”

Not long after the mine closures, Groupe Morneau and its northern transport division, Morneau Sego, opened a three-door terminal in Wabush. Groupe Morneau has a two-door terminal in Happy Valley-Goose Bay, which it opened in 2013.

Speaking with the optimism and patience of a third-generation carrier owner, Andre Morneau, president, Groupe Morneau, says this about the mine closures: “The volume is reduced a lot for many carriers, but we were a little bit lucky. We didn’t have a lot of freight for those two destinations. We operate a big volume for Arcelor Mittal. We have not been able to improve our volume up to now, but we are in Muskrat Falls with a lot of freight. (It’s given) us the opportunity to maintain our volume and improve it in the north.”

(Arcelor Mittal operates an iron ore mine in Fermont, Que., 23 kilometres southwest of Lab City). 

Durocher International is also picking up business from Muskrat Falls.

“We’re transporting hardwood mats that are laid down in the woods for the equipment to travel on. There are a lot of those mats to be trucked up there. We truck them from Vermont, Maine and New Hampshire. We also truck cargo ranging from wire to steel structures to cement,” says Steve Lamontagne, general manager, Durocher International, in Chibougamau.

Lamontagne’s view of the aftermath of the mine closures is grim, although he, like Morneau and Iturriaga, is sanguine about the cyclical nature of the resource sector.

“Well, it is pathetic. It is bad. There is not that much left in that region. It is a big problem for the municipalities in the area. There was a big boom and they put up a lot of infrastructure. In 2012 the sky was the limit. But everybody left. It will come back…I don’t think it will be much longer before it goes back up,” Lamontagne says.

Carriers are losing lanes and downsizing, says Lamontagne, and competition is heating up. “There are other trucks coming up here and fighting for the business. The pricing is going down and the costs are going up.”

While maybe not quite slapstick, it sounds like some southern carriers riding the money wave into Muskrat Falls are unprepared for the road conditions and almost surreal distances. Quebec City to Goose Bay is almost 1,600 kilometres. Route 389 is a candidate for the Miss Congeniality award, and one joke goes that the road is so twisty that you can see your own tail lights.

Rigs and drivers need to be specially prepared for the 530-kilometre Hwy. 500 from Lab City to Goose Bay, but at least it has been much improved, according to Morneau, halving the travel time of three years ago.

“In 2012 we went through Arcelor Mittal building an addition to their mine. They brought stuff all the way up from Mexico. We had guys from Texas, for example, who got into big trouble. Some came up in the winter with summer tires. Muskrat Falls is also bad, getting 3PL companies involved and using anybody. They get stuck. We get calls from companies that come to the North Shore and ask us if we can bring the freight the rest of the way,” Lamontagne says.

Carriers are making the most of a mixed situation, but hopefully, the iron ore market will rebound before the heavy lifting for the mega-dam project wraps up in 2017-18.

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