Federal government orders workers back Ports, grain handlers welcome news as week-long strike ends
Farm groups and grain handling companies welcomed a federal government decision earlier this week to introduce legislation forcing nearly 5,000 striking employees at Canadian Pacific Railway back to work.
Federal labour minister Lisa Raitt introduced back-to-work legislation in the House of Commons May 28, five days after conductors, engineers, yard workers and rail traffic controllers walked of the job, causing trains on all CPR lines in Western Canada to grind to a halt.
Barring any unexpected delays in passing the legislation, CPR officials said they were expecting grain trains to begin rolling again as early as May 30 or May 31.
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CPR spokesperson Kevin Hrysak said rail movement would resume immediately after the legislation was passed.
“You would hope (to resume) the following day,” said Hrysak.
“If it (back-to-work legislation) passes tomorrow (May 29), then we’re hoping to start obviously ramping up operations Wednesday (May 30) and being fully back on line by Thursday (May 31), but it all depends on how this rolls out.”
Hrysak said it is too early to speculate on how long it might take CPR to return to full productivity and clean up the backlog of grain sitting in idled rail cars and country elevators.
Agriculture stakeholders welcomed the news that striking rail workers would likely be returning to work.
Cherilyn Nagel, a Saskatchewan farmer and past-president of the Western Canadian Wheat Growers Association, said back-to-work legislation was a positive development.
However, rail strikes, service disruptions and freight rate increases point to the need for long-term transportation solutions, she added.
Western farmers need a system that ensures farm products can be delivered to port in a timely, reliable and cost-efficient manner, she said.
“Its frustrating because … we are just so reliant on the railways to get our products all the way to (port),” Nagel said.
“We’re being held captive by railways because we really don’t have a competitive alternative. Fortunately for us, the strike happened now instead of in September or October.”
Nagel said the strike also disrupted vessel unloading, delayed backhaul opportunities and left some fertilizer retailers unable to supply product to farmers at the most critical time of year.
Peter Xotta, vice-president of planning and operations with Port Metro Vancouver, said port officials were eager to see a resumption of normal rail service.
However, the week-long disruption would continue to affect port operations for days or even weeks to come, he added.
“Under (normal circumstances), we will handle about 3,000, 4,000, even 5,000 rail cars of agricultural products per week … during peak season so if that flow is disrupted for even a few days … you can expect that there will be a bubble in the system that will need to be smoothed out,” Xotta said.
“Bringing the port and its operations back on line as it relates to CP service will take a number of days and perhaps even into weeks to stabilize.”
CPR handles about half of the bulk grain and oilseed shipments that are delivered from Western Canada to export terminals on the West Coast and Thunder Bay.
Ward Weisensel, chief operating officer at the CWB, said it’s hard to estimate the potential costs that a prolonged rail strike would have had on the CWB and western Canadian grain farmers.
In addition to demurrage charges stemming from delays in loading ocean vessels, the CWB could also be subject to other monetary penalties for failure to deliver grain on time to international customers.
“For a 40,000 tonne vessel, you’re probably talking somewhere in the neighbourhood of $15,000 US per day for each day for demurrage … so if the strike lasts much longer than a week, you could easily get into $3 to $5 million worth of costs here in terms of those types of demurrage numbers,” he said.
“We’ve been shipping around 1,800 cars (160,000 tonnes) a week with CP Rail … so we have a fair number of loads on wheels with CP and a fair number of open orders that are just not moving.”
Wade Sobkowich, executive director of the Western Grain Elevators Association, said the exact costs associated with the rail strike may not be known for some time.
The financial impact on grain companies will be hard to calculate until the backlog of grain already destined for sale is loaded on ships, contract penalties are calculated and demurrage costs are accounted for.
“It’s really hard to quantify,” he said.
“But as a general statement, when the grain flow stops, the money stops and penalties kick in and that hurts everyone in the grain industry, including farmers.”
WGEA members, which include Viterra, Richardson International, Cargill, Paterson, Louis Dreyfus Canada and Parrish & Heimbecker, handle 90 percent of Canada’s bulk grain movements and pay more than $1 billion in rail freight each year.
