From fertilizers to coal, Canadian industries to feel the squeeze from rail stoppage
Adds comments from forest product firms
Aug 21 (Reuters) -Canada's freight rail transport could come to a grinding halt as the country's two leading railroad operators plan an unprecedented, simultaneous, and indefinite work stoppage following deadlocked talks over labor contracts.
Both Canadian National Railway CNR.TO and Canadian Pacific Kansas City CP.TO will lock out workers from Thursday as last-minute talks with the Teamsters Union continue to avert a costly stoppage.
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. The railways transport around C$380 billion ($277 billion) worth of goods annually, according to estimates from industry groups.
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 metric tons of fertilizer product per day, equivalent to four to five trains daily.
* Fertilizer Canada, which represents producers like CF Industries and Nutrien, has estimated C$55-C$63 million per day in lost sales revenue from any disruptions impacting all rail services.
* Top potash producer Nutrien said the potential strike could impact its full-year sales volumes forecast for potash - a key crop nutrient.
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 it has 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
* With exports worth C$45.5 billion in 2022, as per Canadian government data, the forest sector is an important contributor to the country's economy.
* Pulp producer Mercer International MERC.O said it was working on contingency plans including alternative transport methods in anticipation of rail stoppage, while Conifex Timber CFF.TO is reducing sawmill operating schedule at its Mackenzie, British Columbia site
* Canadian National Railway is North America's largest rail carrier of forest products, according to its website.
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.
* Canadian Pacific Kansas City caters to about 90% of automotive assembly plants in Mexico, it said on its website.
* The Canadian Pacific Kansas City website also said it provides direct routing options to major markets including Chicago, Houston, Kansas City, as well as markets within Canada and Mexico.
WINE INDUSTRY
* Canada exported 219.78 kilolitres of wine in 2023 and imported 407.38 kilolitres, as per government data.
* Ontario Craft Wineries, a local trade association, said a rail stoppage could put supply chain pressure on several inputs such as glass bottles, corks, and barrels and affect its members' ability to export wines to other countries or slow down the rate of imported bulk wine into Canada.
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 Sriraj Kalluvila
Aset Terkait
Berita Terbaru
Pengungkapan: Entitas XM Group menyediakan layanan khusus eksekusi dan akses ke Fasilitas Trading Online kami, yang memungkinkan Anda untuk melihat dan/atau menggunakan konten yang tersedia pada atau melalui situs, yang tidak untuk mengubah atau memperluas, serta tidak mengubah atau memperluas hal tersebut. Akses dan penggunaan ini selalu sesuai dengan: (i) Syarat dan Ketentuan; (ii) Peringatan Risiko; dan (iii) Pengungkapan Penuh. Oleh karena itu, konten disediakan hanya sebagai informasi umum. Anda juga harus ketahui bahwa konten Fasilitas Trading Online kami bukan sebagai ajakan atau tawaran untuk untuk melakukan transaksi apa pun di pasar finansial. Trading di pasar finansial mana pun melibatkan tingkat risiko yang signifikan pada modal Anda.
Semua materi yang diterbitkan di Fasilitas Trading Online kami hanya untuk tujuan edukasi/informasi dan tidak boleh mengandung nasihat dan rekomendasi finansial, pajak investasi atau trading, catatan harga trading kami, penawaran, permintaan, transaksi dalam instrumen finansial apa pun atau promo finansial untuk Anda yang tidak diminta.
Konten pihak ketiga apa pun, serta konten yang disiapkan oleh XM, seperti opini, berita, riset, analisis, harga, informasi lain atau link ke situs pihak ketiga yang tersedia "sebagaimana adanya", sebagai komentar pasar umum dan bukan menjadi nasihat investasi. Sejauh konten apa pun ditafsirkan sebagai penelitian investasi, Anda harus memperhatikan dan menerima bahwa konten tersebut tidak dimaksudkan dan belum disiapkan sesuai dengan persyaratan hukum yang dirancang untuk mempromosikan kemandirian riset investasi dan dengan demikian akan dianggap sebagai komunikasi pemasaran di bawah hukum dan peraturan yang relevan. Mohon dipastikan bahwa Anda telah membaca dan memahami Notifikasi pada Riset Investasi Non-Independen dan Peringatan Risiko kami mengenai informasi di atas, yang dapat diakses disini.
