Canadian rail stoppage set to squeeze North American industries
Adds comment from ratings agency Moody's in paragraph 4; farm impact details in paragraphs 18-19
Aug 21 (Reuters) -Canada's freight rail transport could come to a grinding halt as the country's two biggest railroad operators plan an unprecedented, simultaneous 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 on Thursday if last-minute talks with the Teamsters Union fail to avert a costly stoppage.
Canada, the world's second-largest country by area, relies heavily on rails to transport grain, automobiles, potash, coal and other goods. The railways transport about C$380 billion ($277 billion) worth of goods and commodities annually, and the impact of the rail stoppage is expected to be felt across North America.
Rating agency Moody's estimates the simultaneous stoppage could cost the Canadian economy C$341 million per day.
Here are some sectors set to be damaged by a 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 such as CF Industries CF.N and Nutrien NTR.TO, has estimated C$55 million to C$63 million per day in lost sales revenue from disruptions of all rail services.
* Top potash producer Nutrien said the potential stoppage could hamper its full-year potash sales.
TRUCKING
* About 85% of U.S.-Canada cross-border freight in either direction is primarily handled by Canadian trucking carriers.
* Truckers say they can absorb some of the increased demand, but cannot replace long-haul rail distribution, especially for bulk commodities such as coal, potash and food grains.
* Truckload shippers with spot freight, as well as rail shippers looking to convert to truck, should expect not only higher costs but also longer lead times, says U.S. freight forwarder C.H. Robinson CHRW.O.
COAL
* Coal is one of Canada's top bulk commodities transported by rail, with over 30 million metric tons moved annually, according to the Coal Association of Canada.
* Shipment disruptions could affect 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 AND 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.
* A stoppage would crimp shipments of U.S. spring wheat from Minnesota, North Dakota and South Dakota to the Pacific Northwest for export.
* Nearly three dozen North American agriculture groups warn a simultaneous stoppage would be particularly severe on bulk commodity exporters in both Canada and the United States.
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 a rail stoppage, while Conifex Timber CFF.TO is reducing its 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.
WINE INDUSTRY
* Canada exported 219.78 kilolitres of wine in 2023 and imported 407.38 kilolitres, per government data.
* Ontario Craft Wineries, a local trade association, said a rail stoppage could apply 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.
Exports of Canadian forest products https://reut.rs/3yAvpUh
EXPLAINER-Why a Canadian freight rail halt would roil North American supply chains nL1N3K80V9
FACTBOX-Key facts about Canada's biggest rail operators as massive work stoppage looms nL4N3K403C
Reporting by Mrinalika Roy and Nathan Gomes in Bengaluru; Editing by Sriraj Kalluvila and Rod Nickel
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.
