Canadian National Railway on Strike

Alan Barrett

Alan Barrett

Higby Barrett LLC

Canada relies on its two main railways to move products from the Prairies to British Columbia.  The Canadian National Railway (CN) Western Canadian Grain Report states that in the 2018/19 crop year, CN moved a record 27.8 million metric tons (MMT) of bulk grain and processed grain products into western Canada in hopper cars, tanks and boxcars.  More than 80% of CN grain movement terminates at the ports of Vancouver, Prince Rupert, and Thunder Bay.

About 3,200 Canadian National Railway conductors, trainpersons and yard workers are on strike. With the ruling party in the Canadian government less than a majority, the option of passing legislation to end the strike is not going to be easily accomplished.

Grain exports will be impacted at North Vancouver Elevators and Prince Rupert Grain.  Canadian Pacific Railway (CP) does serve Vancouver, but not Prince Rupert. BNSF also serves Vancouver. Approximately 1.5 to 2.0 MMTs of soybeans are exported through Vancouver. Due to the small amounts and access to two alternative railroads, the U.S. soybean export market should not be impacted. One potential negative is for U.S. soybean domestic market. Canadian soybeans and canola meal could be forced into the U.S. market at the expense of U.S. soybeans and U.S soybean meal.

U.S. wheat and canola markets could experience a boost as origination is shifted away from CN rail lines. If the strike is prolonged, ironically, the CN could benefit from Canadian wheat and canola being exported through New Orleans.