Canada Markets

CN Rail and Union Reach Tentative Agreement, But Challenges Remain

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The black line represents the number of CP Rail hopper cars not moving for more than 48 hours on days reported in November, while the blue line represents the same for CN Rail. The grey bars represent the daily unloads at the major terminals of Vancouver, Prince Rupert and Thunder Bay. (DTN graphic by Cliff Jamieson)

CN Rail and the Teamster's Union have reached a tentative agreement, a move that was favorably received by government and industry. Reports are indicating that yard workers will return at 6 a.m. local time on Nov. 26.

At the same time, damage has been done to industry and the process of catching up may be easier said than done, especially as we move into winter.

Brendan Marshall, the vice-president of economic and northern affairs for the Mining Association of Canada, has stated that as a result of lost sales and plant disruptions, it may take one week for every day of service disruption in order to return to normal operations.

Just one example of the fallout is seen at the Nutrien potash mine at Rocanville, Saskatchewan. A Nov. 25 announcement pointed to 550 workers being laid off, as of Dec. 2, due to a temporary shutdown linked to the strike, while announcing on Nov. 26 that the company would proceed with the shutdown despite the railway workers returning to work.

This message was also conveyed by the Alberta Wheat Commission in a Nov. 18 statement: "Even a disruption of a few days will cause a massive backlog and economic losses that are ultimately borne by farmers."

The AG Transport Coalition's Nov. 25 Daily Pipeline Status stated, "With the majority of its network at a standstill for the last seven days, a return to normal flow of traffic will take some time, likely measured in weeks as opposed to days."

CN Rail's website stated "The agreement will allow for CN employees to return to work at 2 p.m. local times today (Nov. 26), and yard assignments will start at 6:00 a.m. local times tomorrow morning and there will be no job action during the ratification period." The results from the ratification votes will be expected in eight weeks.

Dow Jones reported that some of the unionized workers would return to work on Nov. 26 and that CN Rail should return to normal operations soon.

As seen on the attached chart, the number of cars not moving for 48 hours or more on Nov. 25 ranged from 985 cars for CP Rail to 4,222 cars for CN. While down slightly from the reported high on Nov. 24, this is well above the 1,367 CN cars reported on the first day reported in November, or Nov. 3.

The grey bars indicate 1,071 CN and CP hopper cars unloading at the Ports of Vancouver, Prince Rupert and Thunder Bay on Nov. 25, the lowest number reported this month and well-below the 1,652 high reported on Nov. 5. As reported by the Ag Transport Coalition, this represents the first day of week 17 while the cumulative weekly unloads are already down 300 cars from the same day in week 16.

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DTN 360 Poll

This week's poll asks what you think is the solution to deal with the current CN Rail strike and its negative effects on the ag industry. You can weigh in with your thoughts on this week's poll, found on the lower-right side of your DTN Home Page. We appreciate your feedback!

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

Follow him on Twitter @CliffJamieson

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