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)