Rod Nickel

WINNIPEG (Reuters) – Canadian exporters of commodities, from grain to fertilizer to oil, tried to divert shipments from Port of Vancouver on Wednesday, but were unsuccessful.

At least one person has been killed in this disaster. It has also caused a blockage to the global supply chain. This has pushed up inflation concerns ahead of holiday shopping season.

Floods and mudslides caused by a month of rainfall in British Columbia in just two days destroyed highways and the two crucial east-west railway lines belonging to Canadian National Railway (TSX) Co. Canadian Pacific Canadian’s busiest railway.

Precautions have forced the closure of Trans Mountain’s oil pipeline as well as a section of Enbridge (NYSE) Inc’s gas line.

John Brooks (CP’s chief market officer), said Tuesday that the western corridor was “our lifeblood” at an investor conference. It is the main conduit through which almost all commodities flow to an extent.

Vancouver port handles C$550million ($437million) of cargo per day. This includes automobiles, consumer goods and commodities.

Alternative options include diverting commodities from Prince Rupert in British Columbia to the U.S. Pacific Northwest, or to east Canada.

It is a fast-moving world. Port of Vancouver indicated that it expected vessels to dock longer in order to wait for delayed cargo. Shippers usually pay demurrage during this time.

Late shipments can result in penalties from buyers, which increases the need to look for alternatives.

A Canadian grain trader claimed that everyone is watching it.

According to another source from the grain industry, even though the railways are able to make repairs in a matter of days and then restore service within the same timeframe, delays can last as long as a month because there is still a lot of cargo to be processed.

Richardson International and Viterra control the Prince Rupert terminal for grain. It is currently busy exporting, which limits its capability to handle additional volumes. Wade Sobkowich was executive director of Western Grain Elevator Association.

Futures delivery for January fell 1.5% because traders took into account transportation issues from floods.

Teck Resources (NYSE.) – A coal miner said that they were diverting trains from Vancouver towards a Prince Rupert station.

Canpotex Ltd., the potash-export company that is owned by Nutrien (NYSE:) Ltd. and Mosaic Co. (NYSE:) will transport more crop nutrients through smaller terminals located in Portland, Oregon. Natashia Stinka, spokesperson for Saint John (NYSE:) said.

Trans Mountain will close, meaning that around 300,000 barrels oil and other refined products per day will begin filling storage tanks or finding another route.

John Zahary CEO, Altex Energy which has rail terminals located in Alberta and Saskatchewan, stated that there are two main options: shipping oil east along Enbridge’s Mainline, or to the United States by train.

Zahary stated, “It seems like supply chain are so tight these day that panic and scrambling become the plan when something happens.”