Factbox: Industries that could take a hit from Canadian rail strikes

CH Robinson Worldwide

20/08/2024 13:18

Aug 19 (Reuters) - Canada's freight rail network could
come to a grinding halt this week, likely extracting a huge
economic toll across industries as the country's two leading
rail companies plan an unprecedented work stoppage.
     Both Canadian National Railway  CNR.TO  and Canadian
Pacific Kansas City  CP.TO  plan to lock out workers from
Thursday, as talks with the Teamsters union over labor contracts
remain deadlocked.
    Canada is the world's second-largest country by area and
relies heavily on trains to transport grain, beans, automobiles,
potash, coal and other goods.
    Here are some sectors that could take a hit from any
potential rail stoppage.
    
FERTILIZERS
* Fertilizers account for the third highest volume among
commodities shipped by Canadian railways, and 75% of all
fertilizer produced and used in the country is moved by rail. 
* The railways move an average of 69,000 Mt of fertilizer
product per day, equivalent to four to five trains a day.
* Fertilizer Canada, which represents producers like CF
Industries and Nutrien, has warned that disruptions impacting
all rail services will cost the industry an estimated $55-63
million per day in lost sales revenue.
* Top potash producer Nutrien said the potential strike could
impact its full-year sales volumes forecast for potash -  the
main ingredient in fertilizer.
    
TRUCKING 
    * About 85% of U.S.-Canada cross-border freight in either
direction is primarily handled by Canadian trucking carriers.
  
* U.S. freight forwarder C.H. Robinson told Reuters they have
seen rates in Canada double overnight. 
* Truckload shippers with spot freight, as well as rail shippers
looking to convert, should expect not only higher costs but also
longer lead times, C.H. Robinson added.
    
COAL
* Coal is one of Canada's top bulk commodities transported by
rail, with over 30 million tonnes moved annually, according to
the Coal Association of Canada.
* Shipment disruptions could impact mining giant Glencore
 GLEN.L  and its majority-owned unit, Elk Valley Resources.     
 
CRUDE OIL
* An average of 94,400 barrels per day of crude oil has been
exported via rails this year, according to the Canada Energy
Regulator.
* The strike is, however, unlikely to significantly reduce oil
exports to the United States due to excess capacity on Trans
Mountain and other pipelines.
    
       
   
GRAINS, OTHER AGRI PRODUCTS
* Canadian farmers rely on the railways to move their products
to the market. As much as 94% of grain is shipped by rail,
according to Grain Growers of Canada.
    
TIMBER 
* The forest sector is an important contributor to Canada's
economy. In 2022, exports of Canadian forest products stood at
$45.5 billion, according to the Canadian government. 
* According to the Canadian National Railway website, it is
North America's largest rail carrier of forest products. 

   
   
    
AUTOS
* The U.S. imported and exported transportation equipment worth
about $73 billion respectively in 2023 from Canada, according to
the International Trade Administration.
* Canadian National's website said it handles over 2 million
finished vehicles on an annual basis, catering to over 12 North
American vehicle assembly plants.
* CPKC caters to about 90% of automotive assembly plants in
Mexico, it said on its website.
* The CPKC website also said it provides direct routing options
to major markets including Chicago, Houston, the Twin Cities,
Kansas City, as well as markets within Canada and Mexico. 
   
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Monthly Canadian Crude Oil Exports by Rail    https://reut.rs/3Av4ERx
Exports of Canadian forest products    https://reut.rs/3yAvpUh
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Mrinalika Roy and Nathan Gomes in Bengaluru;
Editing by Tasim Zahid)
 ((mrinalika.roy@thomsonreuters.com;))