Canada Markets

DTN Readers Polled on the CN Strike

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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A CN grain train near Rosetown, Saskatchewan prior to the 2019 strike. (DTN photo taken by Cliff Jamieson)

The most recent informal DTN 360 poll asked the question:

What do you think should be the solution to the CN strike and how it is affecting agriculture?

Six choices were given:

1) Allow CN and its employees to work out a solution agreeable to both sides since the right to strike is viewed as a key to the collective bargaining process.

2) Encourage CN and its employees to work out a deal, but urge that it be a long-term contract to give stability to ag and other industries.

3) A binding arbitration process with a neutral party should be mandated prior to any strike.

4) Rail transportation should be named an essential service with the right to strike abolished with federal legislation.

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5) Rail workers should be legislated back to work given the serious issues faced in this instance, leaving open the ability to strike in the future.

6) I do not know how this issue should be approached.

Only three of the six choices were selected by respondents. Choice 4 received roughly half of the responses, indicating that rail movement should be viewed as an essential service and the right to strike should be abolished by the federal government. Despite hardships faced in the ag industry, as well as several other industries, this particular strike helped influence a propane shortage crisis in eastern Canada that became the media focus throughout the strike.

Close to one-third of responses went with No. 5, and indicated that rail workers should be legislated back to work, given the circumstances of this particular strike, while leaving open the option for future strikes. The balance of responses leaned towards option No. 3, of mandated binding arbitration prior to any strike.

CN has stated that it will take between one and four weeks to return to regular service, which can vary with the customer's location.

The most recent weekly data from the AG Transport Coalition shows CN rail spotting just 37% of the hopper cars wanted for loading in week 16, totaling 2,015 cars, while averaging 97.25% of the cars wanted for an average of 4,707 cars over the four previous weeks.

Week 16 also saw the first outright cancellation of cars seen in 2019-20, totaling 529 cars by CN rail. The coalition's reports have indicated 4,700 cars will be rationed or cancelled in week 17 -- equal to the previous four-week average. More recent daily reports indicate that 90% of cars ordered may be rationed.

The weekly report also points to an increase in the number of outstanding orders. At the end of week 15, the coalition reported 113 outstanding orders for CN Rail, while increasing to 2,815 cars as of week 16 and is likely to keep growing. As of this week in the 2018-19 crop year, outstanding orders totaled 134 cars for CN and 528 for CP, for a total of 662 cars.

Despite the slower pace of car spotting and increased cancellations, the total number of cars unloaded at the three major export ports by both railways was reported at 1,380 cars on Dec. 2. This is 11% higher than the previous 30-day moving average. Cumulative unloads for the first two days of week 18 are more than 500 cars higher than the previous week.

While losses to the various industries affected may be difficult to assess for some time, CN itself has trimmed its forecast for corporate profits, with the strike costing the company $140 million or $18 million/day.

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DTN 360 Poll

This week's poll asks how you think the Canadian government has handled the situation during the past year following the arrest of the Huawei Technologies' executive Meng Wanzhou at the request of the U.S. government. We encourage you to share your thoughts in this week's poll that is located on the lower-right side of your DTN Home Page.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow him on Twitter @CliffJamieson

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