The National Carriers’ Conference Committee (NCCC) and the International Brotherhood of Teamsters (BMWED) that represents 11,000 workers extended the current cooling off period that previously was set to expire Nov. 19. The NCCC said the “extension eliminates the threat of a near-term freight rail service disruption.”

A rail shutdown could freeze almost 30 per cent of U.S. cargo shipments by weight, stoke inflation, cost the U.S. economy as much as $2 billion per day and unleash a cascade of transport woes affecting the energy, agriculture, manufacturing, healthcare and retail sectors (all figures US$).

BMWED said without an extension railroads could have begun ceasing rail operations within the next few days in anticipation of a Nov. 20 strike and suggested that “would also represent a blatant attempt to cause panic and economic harm to the railroads’ customers and the U.S. economy right before the Thanksgiving holiday.”

Another union representing about 4,900 locomotive machinists, roadway mechanics and facility maintenance personnel on Saturday narrowly ratified the tentative contract agreement.

The union was the seventh of 12 to approve the deal, while BMWED and the Brotherhood of Railroad Signalmen (BRS) union, representing more than 6,000 members, voted against the deal.

The deal included a 24 per cent compounded wage increase over a five-year period from 2020 through 2024 and five annual $1,000 lump sum payments.

The unions represent 115,000 workers at U.S. railroads including Union Pacific, BNSF, CSX, Norfolk Southern and Kansas City Southern as well as Canadian National Railway’s (CN) track in the U.S..

CSX chief financial officer Sean Pelkey said at a conference the railroad is “optimistic we’ll get to a good solution to be able to pay people much more than what they’re taking home today.”

When the contract is resolved “that really gives us the line of sight to figure out how do we how do we drive a better employee experience,” he added.

— David Shepardson reports on the U.S. transportation sector for Reuters from Washington, D.C.

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Leclerc said there is good demand for feed wheat in the province, “but prices are slightly up because we’re not seeing a lot of feed wheat because there’s no quality issues with the crop.” She quoted $12 per bushel for feed wheat of any red variety in northern Alberta.

Although demand for feed barley has remained strong, it too as has slowed recently, Leclerc said. She cited prices in the Calgary area at around $9/bu. while closer to Edmonton they are around $8.60.

A notable limiting factor has been freight costs. Leclerc said freight this time last October was aboutC$28 per tonne from Edmonton to Lethbridge, but now those charges are around $60. Plus, a worker shortage limits the availability of trucks.

Those sky-high freight rates could determine the amount of feed corn imported from the U.S. by rail over the winter. Leclerc said the imports usually begin in November and might be a worthwhile alternative to barley and wheat.

Feed barley prices on the Prairies were mixed over the last week, according to Prairie Ag Hotwire. Prices in Saskatchewan lost 25 cents per bushel at $6.61-$6.75/bu. delivered. However, in Alberta there was a gain of 11 cents at $6.65-$9.25/bu. Also, Manitoba saw an uptick of 25 cents at $6.97-$7.25/bu.

As for feed wheat, Prairie Ag Hotwire noted prices were steady to higher, with an increase of 26 cents coming in Manitoba at $10.84/bu. delivered. Meanwhile, there were no changes in Alberta or Saskatchewan; prices in Alberta remained at $9.13-$12.11/bu. and those in Saskatchewan held at $8.50-$11.75/bu.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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As of Wednesday, three unions out of the 12 representing unionized rail workers in the U.S. have yet to reach tentative agreements with the bargaining group for U.S. rail carriers. A 30-day “cooling off” period between those three unions and the railways ends at 12:01 a.m. Friday.

Just two unions out of the nine that have reached agreements have so far voted to ratify those deals. The results of six ratification votes are pending; a seventh union, the International Association of Machinists, said Wednesday its members have voted to reject the tentative deal it reached Aug. 29.

Canadian National Railway (CN), which owns a significant amount of U.S. track with employees represented by the affected unions, is a party to the U.S. railways’ organization for “multi-employer national bargaining.”

U.S. railways represented by the U.S. National Carriers’ Conference Committee (NCCC) also include BNSF, CSX, Norfolk Southern and Union Pacific — as well as Kansas City Southern, which is still in the midst of a merger with Canadian Pacific Railway (CP).

CP itself, however, is not a party to the NCCC and is not involved in those labour talks.

Thus, if talks between unions and the NCCC-represented railways end in a work stoppage, CP said Tuesday it “will continue to fully operate in Canada as well as in the U.S., subject only to any applicable embargo imposed by any of the U.S. railroads.”

CN, meanwhile, said in a separate statement Monday it had imposed embargoes effective that day on all “rail security-sensitive materials” and “time-sensitive” commodities bound from Canada to the U.S. and Mexico — or bound from origins in the U.S. and Mexico into Canada — and has set up a permit system accordingly.

CN’s intermodal shipments and its “Canada-to-Canada” carload shipments of all commodities will continue to move as usual, the company added.

However, CN said Monday, other freight customers “may also start to experience delayed or suspended service over the course of this week, as the railroads prepare for the possibility that current labour negotiations do not result in a resolution and are forced to substantially reduce operations.”

CP, in its memo to customers Tuesday, said it hasn’t yet launched any such embargoes but is “closely monitoring developments to evaluate any potential impact to shipments on CP’s network.”

However, CP added, embargoes set up by “other railroads” may hinder its ability to move equipment on its own North American network — for example, any traffic that’s interchanged to any of the involved or affected railroads, or traffic that relies on haulage handling or running rights agreements or reciprocal switch service on such railroads.

For CP’s intermodal customers, U.S.-destined traffic from the Port of Montreal and Port Saint John may be impacted, the railway said.

Apart from the lines to be acquired via its deal for Kansas City Southern, CP’s own directly-operated U.S. track reaches Kansas City, Minneapolis, Milwaukee, Chicago, Detroit, Albany and Searsport, Maine.

CN’s directly-owned U.S. track, meanwhile, reaches U.S. destinations including New Orleans, Mobile, Minneapolis, Omaha, Chicago, St. Louis, Pittsburgh and Memphis, among others. — Glacier FarmMedia Network

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With farmers starting to harvest autumn crops that are shipped to meat and biofuels producers, the shipping disruptions could add to already high inflation. Farmers also plan to add fertilizer to fields after the harvest, and shipments of fertilizer are being delayed.

Max Fisher, chief economist at the National Grain and Feed Association, which represents most U.S. grain handlers, said rail customers reported at least one railway would stop taking grain shipments on Thursday morning.

Most major U.S. railways have already stopped accepting new shipments of ammonia fertilizer and other potentially hazardous materials, said Justin Louchheim, senior government affairs director at The Fertilizer Institute, an industry group.

Louchheim said fertilizer producers are now evaluating how much storage they have for ammonia that cannot move by rail, and whether some can move by truck.

The potential rail shutdown looms just six weeks before most Midwest farmers would begin applying fertilizer, said Josh Linville, fertilizer director at StoneX Group. About 40 per cent of the U.S. fertilizer supply is on a rail car at some point before arriving on a farm, he said.

Railroads have until a minute after midnight on Friday to reach tentative deals with holdout unions representing about 60,000 workers.

Worries about service interruptions boosted prices for corn-based ethanol at several hubs and kept sellers out of the market, said Josh Pedrick, a managing editor for S&P Global Commodity Insights.

The Association of American Railways (AAR), which represents railroad companies, did not immediately respond to request for comment on grain transportation.

The work stoppage would be keenly felt in states like North Dakota, South Dakota, Minnesota and Nebraska, from which grain is hauled via rail to ports in the Pacific Northwest for export, said Thomas Lahey, domestic freight manager at grain merchandiser Columbia Grain International. Grain elevators in the upper Midwest move soybeans to the PNW mostly via BNSF, Canadian Pacific Railway and Union Pacific, he said.

U.S. Class 1 railroads transported nearly 1.5 million carloads of grain in 2020, including 691,000 carloads of corn, 340,000 carloads of soybeans and 248,000 carloads of processed soybeans like soymeal and soyoil, AAR said.

Enough feed?

U.S. chicken producers rely on about 27 million bushels of corn and 11 million bushels of soymeal every week to feed their birds, the National Chicken Council said. Much is moved by rail.

“Any disruption of service could negatively impact the welfare of the birds, and ultimately impact production at a time when Americans are already dealing with record food inflation,” council spokesman Tom Super said.

In North Carolina, a pork and poultry producer, local grain growers do not produce enough corn to feed all the farm animals, said Bob Ford, executive director of the North Carolina Poultry Federation.

“We’d be in trouble if they went on strike for very long,” Ford said. “We’d run out of corn.”

Wayne-Sanderson Farms, a Georgia-based chicken company owned by Cargill and Continental Grain, is working with local corn producers to augment feed supplies if needed during rail disruptions, spokesman Frank Singleton said.

The beginning of corn harvesting in the southern United States, a main poultry region, “will relieve some of the pressure” on feed supplies, he said.

Some rail customers that feed livestock do not have enough soymeal, said Fisher, of the National Grain and Feed Association. In a worst case scenario, that could force some producers to cull animals.

Railroads also ship hexane, a chemical solvent that crushers use to extract oil from soybeans, said Mike Steenhoek, executive director of Soy Transportation Coalition.

“Any slowdown or stoppage of rail service — especially on the eve of harvest — would significantly impact farmers’ ability to meet customer demand — both domestically and internationally,” Steenhoek said.

— Reporting by P.J. Huffstutter and Tom Polansek in Chicago; additional reporting by Karl Plume in Chicago, Rod Nickel in Winnipeg and Stephanie Kelly in New York.

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The announcement of delay also comes a month after CF said it is increasing fertilizer shipments to both U.S. coasts from the world’s largest nitrogen complex in Louisiana to help offset a decline in exports from Russia, a major exporter of potash, after it invaded Ukraine.

CF Industries ships to customers through Union Pacific rail lines primarily from its Donaldsonville complex in Louisiana and its Port Neal complex in Iowa. The company was asked by the railroad operator to reduce its shipments by nearly 20 per cent.

The fertilizer producer said it may not have available shipping capacity to take new rail orders involving Union Pacific rail lines to meet late season demand for fertilizer.

In January, Union Pacific warned COVID-19 cases among its staff and paid time off for people getting inoculated would hurt its ability to move freight in the current quarter.

“The timing of this action by Union Pacific could not come at a worse time for farmers,” CF CEO Tony Will said Thursday.

“Not only will fertilizer be delayed by these shipping restrictions, but additional fertilizer needed to complete spring applications may be unable to reach farmers at all,” he added.

CF has five U.S. nitrogen manufacturing complexes in all, along with two plants in the United Kingdom and two in Canada, at Medicine Hat, Alta. and Courtright, Ont.

— Reporting for Reuters by Rithika Krishna in Bangalore.

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Ukraine’s state-run railway operator said this week it was ready to organize agricultural exports by rail as a matter of urgency after closure of the country’s Black Sea ports because of the military invasion by Russia.

A major global agricultural producer and exporter, Ukraine has historically exported its grain, vegetable oils and other food products by ship.

APK-Inform said that Ukraine, which exports around five million tonnes of grain per month before the war, could send abroad around 600,000 tonnes a month by train, or about 20,000 tonnes a day.

“In addition, there are questions about the ability of customs and checkpoints to quickly adapt to work in conditions of increased workload,” the consultancy said.

Ukrainian Railways has said that it might deliver grain to borders with Romania, Hungary, Slovakia and Poland, from where the grain can be delivered to the ports and logistics hubs of European countries.

The rail operator can deliver 150 grain carriages per day to Romania, 45 to Poland, 17 to Hungary and 60 to Slovakia, with up to 70 tonnes of grain loaded on each carriage, it added.

The agriculture ministry said Ukraine had exported 43 million tonnes of various grains in the 2021-22 season as of Feb. 23.

— Reporting for Reuters by Pavel Polityuk.

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Robinson will replace Jean-Jacques Ruest, who announced his decision to step down from the role in October following investor demands for his exit after CN’s failed bid for Kansas City Southern.

CN will also appoint two new independent directors as a part of a settlement with TCI Fund Management, which has agreed to withdraw a requisition for a special meeting of shareholders that was previously slated for March 22.

Billionaire Chris Hohn’s TCI in September nominated four independent directors to the company’s board. It has been seeking a change since August, saying the board lacked “the right railroad experience and operational expertise.”

Robinson, who takes over the top role from Feb. 28, spent 27 years with Canadian Pacific Railway in various executive roles, before joining North American energy company TC Energy in 2014.

CN said Robinson has made it a personal priority to build proficiency in French, the sole official language of Quebec, which houses the company’s headquarters in Montreal.

The statement comes after a language furor rattled corporate Quebec last year, leaving some companies scrambling to improve the French-speaking skills of their C-suite executives.

CN also announced quarterly results on Tuesday. It reported an adjusted profit of $1.71 per share in the fourth quarter ended Dec. 31, beating market expectations of $1.53 per share.

— Reporting for Reuters by Rithika Krishna in Bangalore.

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CN spokesperson Jonathan Abecassis said the corridor was initially closed a second time during the most recent spell of heavy rains in southwestern British Columbia as a safety precaution. Washouts were discovered afterward and repaired, with crews still monitoring the corridor.

With that stretch of rail being out of service twice over the last month, CN redirected a portion of its trains elsewhere.

“We were able to divert quite a bit of traffic to Prince Rupert,” Abecassis said, but declined to provide any data as to how many cars went to the more northerly port.

Mark Hemmes, president of Quorum Corp., which monitors rail traffic in Western Canada, stressed the washouts over the last month are the worst he’s seen in 40 years.

“What really made it worse than anything else was the fact that the roads were gone too. It’s going to be a while before they get the roads back,” he said.

A lot of the repairs by CN and Canadian Pacific Railway have been temporary fixes that require the trains to travel slower on their lines, according to Hemmes.

“Both railways have phenomenal engineering groups. For a lot of them it’s a matter of pride,” he added.

Hemmes pointed out that on a percentage or pro-rated basis, grain movement to the West Coast was ahead of the same time last year — although grains moved by container, such as pulses, were already suffering from a lack of available containers.

Sharply reduced crop production this year on the Prairies has produced fewer exports, which in turn has also eased the pressure on transportation system.

Wade Sobkowich of the Western Grain Elevator Association was also complimentary of the repairs by CN and CP following the washouts.

“We have no complaints necessarily about the way the railways have handled it. They’re doing everything they can. We would not be in a position to say they should have done this differently or better,” he said.

Sobkowich added the WGEA is looking forward to when the two railways will be able to resume full service and clear up the current backlog.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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Montreal-based CN said in an emailed statement Tuesday that repair work on damaged sections of its track from Kamloops to Vancouver “progressed well over the weekend” and the line will reopen to “limited traffic” tomorrow “barring any unforeseen issues.”

The company hasn’t yet specified what kinds of limits will be placed on its rail traffic through the area.

The news comes as Canadian Pacific Railway (CP) gets set to reopen its own Kamloops-Vancouver line Tuesday.

CN and CP’s mainlines were cut off in last week’s rainstorms over southern B.C., which created floods and landslides that are known to have killed at least four people and thousands of head of livestock, shut highways, cut off export access to Vancouver’s ports and disrupted supply chains for food, fuel, commodities and other goods through the region.

Forecasters predict further “atmospheric river” systems will bring more rain to the region starting later this week, while higher temperatures are expected to add mountain snowmelt to the mix.

CN on Tuesday also reminded shippers that its track to West Coast bulk and container port facilities at Prince Rupert, about 1,000 km northwest of Vancouver, is unaffected.

Prince Rupert, CN said, “remains fully operational and is not experiencing any impact to port or rail operations related to the extreme weather events in southern British Columbia.” — Glacier FarmMedia Network

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The Winnipeg-based company announced Monday it will build new facilities at Rycroft, Alta. and Melfort, Sask., with construction starting later this year on both toward completion in early 2023.

The two elevators will each be built with 150-car loop track systems connecting to Canadian National Railway (CN) track, and will each include storage capacity for 42,000 tonnes of grain.

Other “high-efficiency features” will allow producers the ability to unload a Super-B truck in less than five minutes as well as “excellent” road access, the company said.

“G3 is keeping grain moving to market, and that means more delivery opportunities for our farmer customers, and faster service which saves farmers time and money,” G3 CEO Don Chapman said in the company’s release.

Other grain handlers with elevators at Melfort include Viterra, Richardson Pioneer and The Andersons, while Richardson, Parrish and Heimbecker, Cargill and Grain Millers Canada have facilities at Rycroft.

G3 has been on a relatively steady expansion track on the Prairies since its formation in 2015, today operating 17 Prairie grain elevators and five port terminals.

Those include elevators opened earlier this year at Vermilion, Alta. and Swift Current, Sask. In 2020 G3 opened five Alberta elevators, along with its West Coast port terminal at Vancouver. — Glacier FarmMedia Network

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