Approximately 3,200 Canadian National Railway Co. conductors, trainpersons and yard workers walked off the job at 12:01 a.m. on Nov. 19, yet another challenge to be faced by the western ag industry following a most challenging harvest this fall while the industry faces ongoing barriers to trade.
This news follows the record grain shipments achieved by Canada's two major railways in 2018-19 and more recently, record monthly shipments achieved by both railways for the month of October of 2.8 million metric tons for CN Rail and 2.66 mmt for CP Rail.
The timing of the event perhaps places the union in a position of strength, while arriving at the worst possible time for shippers. Tough grain in many areas of the Prairies requiring elevator drying could quickly be backed up, increasing storage risks linked to holding this grain on farm. Trade barriers faced by Canada in various markets, such as canola to China, make each and every export shipment increasingly important. Meanwhile, the federal Liberal party will name its cabinet ministers for the upcoming term on Nov. 20, and will not sit in Parliament until Dec. 5, ruling out chances of quick and decisive political action.
Patricia A. Hajdu, minister of Employment, Workforce Development and Labour in the last federal Liberal cabinet, tweeted that both she and Marc Garneau, minister of Transport, are urging both parties to continue negotiations and are watching closely, although it remains to be seen who will hold these positions after Nov. 20. The government's Federal Mediation and Conciliation Service remains poised to step in if required. The Alberta government is calling for the federal government to reconvene earlier than planned in order to enact emergency back-to-work legislation, led by the province's Energy minister over concerns of waning crude oil shipments.
From the shipper's perspective, every day of lost shipping is lost forever, while the Alberta Wheat Commission's press release stated that "even a disruption of a few days will cause a massive backlog and economic losses that are ultimately borne by farmers."
The attached graphic shows the reported loads on wheels as reported by the AG Transport Coalition's Daily Pipeline Status report from the start of the crop year, or Aug. 1, until Nov. 18 or the day prior to the strike. On Nov. 18, this report points to 5,401 CN cars on wheels, down from the Oct. 20 high of 6,985 cars (blue line) and the 6,242 cars reported on the same date in 2018. This value is reported down 11% from the 30-day moving average.
The Nov. 18 Daily Pipeline Status indicates the idle car count across the system has increased "substantially" for three days straight in anticipation of this strike and is expected to continue to increase.
North American grain flows are affected with CN embargoing all commodities and interchange traffic "destined to and from Canada." The issue also spills over to CP Rail with an embargo application for shipments that are routed to CN interchanges.
As seen in a Grain Growers of Canada press release, Vice-Chair Shane Stokke stated "When one part of the grain handling system is not running, the whole chain shuts down. We know that CN is aware of the important role they play in the success of our industry and expect both parties to negotiate in good faith and get back to what they do best -- getting Canadian products where they need to go."
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Cliff Jamieson can be reached at email@example.com
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