A railway strike has been announced at the two major Canadian railway companies. There are fears that the agricultural sector will be affected.
Oilseed Prices Show Restraint Amidst Market Stability
- Oilseeds showed restrained movement on the stock exchanges yesterday.
- On Euronext, rapeseed stabilized at the front month of November 24.
- Rapeseed closed EUR 1.25 lower at EUR 452.00 per tonne.
- Soya beans on the CBOT saw little change by evening.
- September 24 beans increased slightly by 1 cent to 957.25 ct/bu (317.33 EUR/t).
- The weak dollar remains beneficial for US exporters.
- Since the beginning of the month, the dollar has lost over 2.5% in value against the euro.
- Since the beginning of the month, the dollar has lost more than 2.5 % in value against the euro and yesterday was at times at more than USD 1.11 per euro.
Canadian Railway Workers Poised for Strike as Wage Negotiations Fail
Wage negotiations between the two major Canadian railway companies (Canadian National Railway CNR.TO and Canadian Pacific Kansas City CP.TO) have come to a standstill and a strike by railway workers is looming. If no agreement can be reached, both companies have announced that they will suspend goods train services early Thursday morning for the first time in their history. Steven MacKinnon, Canada’s Minister of Labour, negotiated yesterday in Montreal and today in Calgary to prevent rail traffic from coming to a standstill. He called on companies and unions to reach an agreement and to ‘fulfil their responsibilities to Canadians’ in order to prevent a complete shutdown.
Railway Strike Threatens Canada’s Agricultural Supply Chain
The dispute has been ongoing since the beginning of the year. At national level, mediators are working with the companies and unions to find a solution. So far without success. The world’s second-largest country in terms of area relies on the railways to transport grain, fertilisers and other raw materials, as well as chemicals and cars.
CAD 1 billion per day
According to the country’s largest business lobby, a railway strike would cost CAD 1 billion per day. This corresponds to 733 million US dollars. The impact on the fertiliser sector alone would be considerable. An average of 69,000 tonnes of fertiliser per day, equivalent to four to five trains, are transported by rail. Disruptions would cost the industry CAD 55 to 63 million per day in the form of lost revenue, not including logistics and operating costs. In addition, around 85% of the USA’s 13 million tonnes of potash imports last year came from Canada, almost all by rail. In addition, there is growing concern about the export of ethanol from the US to Canada. According to the USDA, Canada was the top destination for US ethanol last year, with nearly three-quarters of the export volume transported by rail.
Hazardous Goods Shipments Halted as Rail Strike Looms
The effects of the tariff dispute and the threat of rail strikes are already becoming apparent. Both railway companies have stopped accepting shipments of hazardous goods. The logistics company Maersk announced that it would no longer accept certain shipments to Canada and the US freight forwarder C.H. Robinson CHRW.O independently announced that it would withdraw some of its US customers’ sea freight from Canadian ports.
Harvest Logistics in Jeopardy Due to Potential Rail Strike
This could have a significant impact on logistics for the canola, wheat and corn harvest, which has already begun or is about to begin. Quorum Corp, which is responsible for monitoring grain shipments, expects a daily transport volume of 138,000 tonnes at the beginning of September. Contractual penalties and demurrage for ships waiting for grain would be the short-term consequences of a rail strike. It would be logistically impossible and very expensive to shift deliveries to the road at short notice. The infrastructure also does not allow for the storage of large harvest quantities