Fertilizer Canada estimates rail strike will cost industry millions per day in lost revenue

HOUSTON (ICIS)–Fertilizer Canada said disruptions to rail services across the country will cost the fertilizer industry an estimated C$55-63 ($40.3-46.2) million per day in lost sales revenue.

Facing a potential strike, the industry group is urgently calling on the federal government to take immediate action to prevent a work stoppage on both railways.

It wants to see binding arbitration that prohibits Teamsters Canada Rail Conference (TCRC) from undertaking strike action and CN Railway and Canadian Pacific Kansas City (CPKC) from lockout action.

Both railways have served lockout notices to TCRC beginning 22 August and TCRC has served a strike notice to CPKC also beginning 22 August.

“The time for action is now. We can no longer patiently wait for a resolution. The federal government must protect Canada’s economy and food security by ordering binding arbitration,” said Karen Proud, Fertilizer Canada president and CEO.

The group noted that the railways move an average of 69,000 tonnes of fertilizer product per day, which is equivalent to four to five trains.

The fertilizer industry is among the first to experience slowdowns. As on 12 August, the movement of some ammonia products were halted when they were embargoed.

Since that action the railways have issued further embargoes, including US railways halting shipments to Canada.

Currently 75% of all fertilizer produced and used in Canada is moved by rail, with minimal transportation alternatives, with 90% of those volumes which are destined for the US market delivered by rail.

“In the last seven years, Canadian supply chain labour disruptions have cost the fertilizer industry nearly a billion dollars,” Proud said. “These stoppages are doing immense damage to our reputation as a reliable trading partner.”

“Our customers, who rely on Canadian fertilizer products, are being forced to turn to our competitors in Russia, Belarus and China. We can’t afford for our railways to shut down, and we can’t afford a passive approach to our supply chains any longer. We need long-term solutions.”

Fertilizer Canada represents producers, manufacturers, wholesale and retail distributors of nitrogen, phosphate, potash and sulphur fertilizers.

$1.00=C1.36