Fertilizer industry sources were gauging the effect of the strike by 2,800 unionized workers at the Canadian National Railway Co. that took effect Feb. 10 (GM Feb. 12, p. 10). While the recent cold weather was cited as having the greatest impact on rail shipments in Canada at mid-month, several sources said the strike will undoubtedly affect rail movement going forward, and the more pressing issue now is how long the strike will last.
“CN management is running some of the trains, but obviously rail movement is reduced,” said Tom Pasztor, spokesman for Potash Corp. of Saskatchewan Inc. According to Richard Downey of Agrium Inc., CN was operating at about 75 percent of normal capacity as a result of the strike. “We are hopeful that CN will be back to normal operations in March,” Pasztor told Green Markets. He said PotashCorp is “in daily contact with CN and [we] are prioritizing the movement of product.” Pasztor noted as well that PotashCorp had record railcar movement in October through January. “This has positioned us nicely,” he said.
Some industry sources pointed to the strike as one factor contributing to higher warehouse postings for potash last week (see market text pp. 8-9), along with fears about the brine inflow problem at the Esterhazy potash mine in Saskatchewan (GM Jan. 29, p. 1). Pasztor, however, downplayed the connection. “The uptick in potash prices is due to the many factors that influence demand and price,” he said. “I would not want to reference any one or two factors as the cause for an uptick.” For the record, The Mosaic Co. says the new inflow problem has not impacted Esterhazy production.
The United Transportation Union-Canada, which is based in Montreal, represents about 2,800 conductors and yard service personnel at CN in Canada. The union is asking for a 4.5 percent wage increase in the first two years of a three-year contract with CN, with a 4 percent increase in the final year. CN has challenged the legality of the strike, however, arguing that the Canadian union has not received the necessary authorization from the UTU-International, which is based in Cleveland, Ohio.
A ruling on the legality of the strike from the Canada Industrial Relations Board (CIRB) was originally scheduled for Feb. 13, but the CIRB postponed its hearing until Feb. 19. Agriculture Minister Chuck Strahl said the federal government will not intervene, as requested by the Canadian Wheat Board, while the CIRB is hearing the case. At issue for the Wheat Board are 11 ships at Vancouver that are waiting for grain, and another six at Prince Rupert, B.C.
“‘We are looking at paying demurrage every day at Prince Rupert in the neighborhood of $130,000 to $180,000 U.S. That is on top of a daily charge in the neighborhood of $150,000 U.S. at the Port of Vancouver,” Maureen Fitzhenry, spokesperson for the wheat board, was quoted as saying. Fitzhenry added that “the CN strike did not cause this situation, but it is certainly impeding our efforts to get it resolved.”
Several chemical industry representatives in Canada weighed in on the strike last week. “A continued strike by CN workers will have a devastating effect on the industry,” said Larry MacDonald, chairman of Canadian Chemical Producers Association and CFO of NOVA Chemicals. Jeff Johnston, president of Dow Canada, said the strike is “already having a severe impact on our ability to ship products, which is affecting our customers across the value chain.”
CN President and CEO Hunter Harrison said when the strike was first announced that CN would continue freight operations across Canada using management personnel to perform UTU-represented jobs. Several derailments last week, however – including four cars in Fort Saskatchewan on Feb. 13, another four at the Symington rail yard in Manitoba that same day, and a locomotive derailment in Prince George, B.C. – were cited by striking UTU members as evidence of inexperience and safety issues in their absence.
CN Spokesman Jim Feeny was quoted in the local press as saying the Fort Saskatchewan incident was unrelated to the strike, and the Symington derailment remained under investigation.