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QUOTES-Industry groups and companies fret ahead of a Canada-wide freight rail stoppage
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QUOTES-Industry groups and companies fret ahead of a Canada-wide freight rail stoppage
Aug 20, 2024 6:38 AM

Aug 20 (Reuters) - Several North American industries

could be forced to shut down some capacity, temporarily lay off

workers, and shift transport to trucks if Canada's two main

freight rail operators proceed with plans to lock out union

workers in Canada this Thursday.

The unprecedented simultaneous work stoppage will affect not

only the flow of goods in Canada, but across North America as

the rail networks for both Canadian National Railway Co ( CNI )

and Canadian Pacific Kansas City ( CP ) run further south into

the United States and Mexico.

The looming stoppages have companies and industry bodies on

edge. Here are some thoughts from executives and lobby groups on

how any stoppages could play out:

DENNIS DARBY, CEO, CANADIAN MANUFACTURERS AND EXPORTERS

"If the strike or lockout goes ahead, we are estimating an

average per day impact of C$275,000 ($201,687) per member

(company).

"About C$531 million worth of manufactured goods stranded on

the lines each day. It is an incredibly large amount and it will

lead to potential layoffs, or shutdowns, or turning down plants,

leading to penalties and additional costs to exporters."

FERTILIZER CANADA

"Disruptions impacting all rail services across the country

will cost the fertilizer industry an estimated C$55-C$63 million

per day in lost sales revenue, not including logistical and

operational costs.

"The railways move an average of 69,000 tonnes of fertilizer

product per day, which is equivalent to four to five trains per

day of fertilizer product. Since 2018, seven supply chain labour

disruptions have cost the fertilizer industry an estimated C$976

million in lost sales revenue."

AMERICAN CHEMISTRY COUNCIL

"Last year, U.S. firms sold more than $28 billion in

chemicals to customers in Canada and we import about $25 billion

in chemicals from Canadian partners annually. The North American

freight rail network is critical to this flow of goods. A rail

disruption in Canada would greatly impact U.S. supply chains,

including facilities in Texas, Louisiana, Pennsylvania and New

York that rely on Canadian suppliers."

MARK HEMMES, HEAD OF QUORUM CORP, WHICH MONITORS CANADIAN

GRAIN HANDLING

"The biggest concern for farmers is the elevator network in

the prairies would fill to its capacity within 7-10 days, which

means farmers' cash flow would stop until the railways reopen

and are able to clear the elevators."

ROBERT HARPER OF ALBERTA MOTOR TRANSPORT ASSOCIATION

"The industry can help out in the short term in reallocating

assets, but in the long term you simply cannot replace long-haul

rail distribution, because in some cases the trucking industry

doesn't have the equipment or the capacity."

CANADIAN POTASH EXPORTING AND MARKETING FIRM, CANPOTEX

"Railroad work stoppages - either simultaneous or staggered

- will hurt Canadian potash exports overseas. There is no

alternative to shipping potash by rail. One week of Canpotex

train traffic would be the equivalent of approximately 10,000

trucks on the road.

"This comes on the heels of strikes at the Port of Vancouver

and St. Lawrence Seaway in 2023. ... Frequent domestic

disruptions are chipping away at Canada's reputation as a

reliable, stable trading partner."

PIERRE GRATTON, CEO, THE MINING ASSOCIATION OF CANADA

"The mining industry is heavily reliant on rail and any work

stoppage is extremely harmful to the sector. Mined products make

up nearly half of rail revenue. ... Mines would be forced to go

on care and maintenance, laying off thousands of workers if a

strike or lockout drags on."

($1 = 1.3635 Canadian dollars)

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