TRURO, N.S. - Canada produces more trees than it could ever consume and the U.S. consumes more trees than it could ever produce. In that paradox lies the root of the battle over lumber that, if lost, ...
TRURO, N.S. – Canada produces more trees than it could ever consume and the U.S. consumes more trees than it could ever produce. In that paradox lies the root of the battle over lumber that, if lost, has the potential to cut a huge swath through the Canadian economy.
And, if the cold economic war between the two countries were to turn hot, then the front line troops would be Canada’s lumber hauling fleets and owner/operators.
“We have two trucks running south on a steady basis – out of a total of 14 trucks – and the change has been huge already,” explains Bruce Kingsley, who heads up a B.C. trucking operation.
“On Vancouver Island it seems the O/Os have chosen the American market in a big way and I can see lots of hard times coming,” he continues. “Our company is being hit as our (B.C.) Lower Mainland-bound freight is drying up as so many southbound trucks are taking those loads instead.”
On Mar. 31, the 1996 Canada-U.S. Softwood Lumber Agreement, which provided Canadian lumber exporters with guaranteed access to the U.S. market, expired. At about $10 billion a year, lumber is second to only automotive in terms of cross-border trade significance.
Now that the agreement is dead, the lumber producers in the U.S. don’t want to see Canada getting what they say is a free ride any longer. They claim that free trade has victimized U.S. producers for too long.
On Apr. 2, the George W. Bush administration slapped Canadian shipments of softwood with duties of up to 78 per cent, or roughly $8 billion annually.
Due to international law, the duties can’t kick in for 90 days. If the diplomats don’t solve the crisis before then, the gouging will begin around the start of July.
“I think the biggest problem right now in the Atlantic Region is … the uncertainty as to what is really going to take place,” says Wayne Jenkins, the general manager of the flatbed division at Truro, N.S.-based Brookville Carriers.
By his estimates, the overall shipment of lumber in the Maritimes has fallen off 40 per cent in comparison to before the Canada-U.S. lumber war grabbed headlines in March.
“Our big thing is it happened at a real bad time, because it happened during the spring thaw – when the roads were closed – and of course the fuel prices are up, and all the costs in the trucking industry are up,” Jenkins continues. “What it’s doing with us down here is it’s not allowing us to turn around as fast as we were to get back out of the Maritimes (and) to the States.”
The East Coast depends more on the lumber industry than almost any other region in the country, Jenkins adds.
“An O/O that might make a trip-and-a-half a week, he’s down to a trip a week down to the States and back home again,” notes Jenkins. “The Atlantic Region can’t function properly without that flow of volume.”
He insists this slowdown has hit O/Os hard to the point where their gross income has been dramatically decreased and many can no longer afford to make a go of it.
“A lot of people feel their government has let them down once again,” says Terry Crowell, a safety manager at Classic Freight, which also runs out of Truro, N.S. “People try to make a living in this business, and it’s hard enough go. But when you have a situation like this arise, it definitely doesn’t help.”
Meanwhile back on the West Coast, the industry seems prepared to dig in at least for the time being.
“Mills are beginning to build inventories and, I’m told, if something isn’t resolved very quickly, volume will have to be removed from the system,” says Greg Munden, who hauls softwood in B.C.
“Longer term, a significant duty imposed on Canadian lumber would have a dramatic impact on the mills’ ability to ship product across the line competitively.”
And that doesn’t bode well for the Canadian truckers who depend on them to make a living. n