Shippers fear rail strike in Canada this week

  • Market: Agriculture, Biofuels, Chemicals, Coal, Coking coal, Crude oil, Fertilizers, Metals, Oil products, Petrochemicals, Petroleum coke
  • 14/03/22

Commodity shippers fear that a potential strike by rail workers this week at Canadian Pacific (CP) could cost them millions of dollars in delayed deliveries, lost sales and extra storage fees.

Members of Teamsters Canada Rail Conference (TCRC) working at CP voted earlier this month to go on strike as early as 16 March if they do not agree on a new labor contract.

A strike is not just a possibility; the last three collective bargaining rounds between CP and TCRC resulted in strikes.

Even short strikes can disrupt operations because carriers and shippers start preparing ahead of any action and then need days or weeks to catch up on delayed shipments.

Shippers are already struggling with transportation. Trains are running slower. A global container shortage has forced shippers to miss deliveries and put products into storage, which in turn has limited storage space. And a truck driver shortage in Canada has limited deliveries.

"Our systems are really struggling and this [possible] strike is adding insult to injury in meeting shippers' needs and getting products to market," according to Joel Neuheimer, vice president of international trade and transportation at the Forest Products Association of Canada. "Even if it lasts only a couple days, losses will be in the tens of millions just for forest product shippers."

Fertilizer shippers are also concerned. "The agricultural sector is already experiencing supply challenges compounded by the [situation] in Ukraine and cannot withstand any more disruption to the supply chain without severe consequences," Fertilizer Canada chief executive Karen Proud said.

US agriculture and fertilizer organizations — members of the Agricultural Transportation Working Group — recently urged the US and Canadian governments to avert the strike and mitigate trucking delays as transportation challenges threaten preparations for the spring farming season.

More contract negotiations are coming. Contracts between Canadian National and TCRC conductors, locomotive engineers and rail traffic controllers expire this year.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
28/03/24

Crane barge arriving at Baltimore bridge tonight

Crane barge arriving at Baltimore bridge tonight

Houston, 28 March (Argus) — The first major piece of equipment capable of beginning to clear the blocked Port of Baltimore, Maryland, is expected to arrive onsite tonight. The Chesapeake 1000 crane barge, capable of lifting 1,000 short tons with its a 231ft-long boom, is expected to arrive at the site of the collapsed Francis Scott Key Bridge near Baltimore at 11pm ET on 28 March, the US Coast Guard (USCG) told Argus . Both the crane and the tug pulling it, Atlantic Enterprise , are owned by Donjon Marine. It is currently the only crane on route to the collapsed bridge, the USCG said. There is no official timetable for the reopening of the port after the Interstate 695 highway bridge over the Patapsco River was hit in the early hours of 26 March by a container ship and collapsed, with the debris and ship blocking the waterway. The operator of the ship, Maersk, has contracted with marine salvage company Resolve Marine to refloat the vessel and remove it from the area, according to the USCG. It is not clear who has contracted for the Chesapeake 1000. Despite the inbound crane, it could take weeks or even months to clear debris and reopen the waterway under the collapsed bridge according to a engineering professor at the nearby Johns Hopkins University. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

'Weeks, months' to reopen Baltimore waterway: professor


28/03/24
News
28/03/24

'Weeks, months' to reopen Baltimore waterway: professor

Houston, 28 March (Argus) — It could take weeks or even months to clear debris and reopen the waterway under the collapsed Francis Scott Key Bridge in Baltimore, Maryland, according to a engineering professor at the nearby Johns Hopkins University. As of Wednesday, there was no official timetable for the reopening of the Port of Baltimore after a major highway bridge over the Patapsco River was hit in the early hours of 26 March by a container ship and collapsed, with the debris and ship blocking the waterway. "I'd be shocked if it's weeks, but I don't think it'll take even a year" to clear the waterway, structural engineer and Johns Hopkins professor Benjamin Schafer said Wednesday. He expects the rebuild of the bridge to take significantly longer. "I've lived through quite a few civil infrastructure projects and they're rarely less than 10 years. So I think that's what we're looking at," Schafer said. He noted that it took five years to build the original Francis Scott Key Bridge and seven years to repair the Sunshine Skyway Bridge in Tampa Bay, Florida, after a similar collapse in 1980. Still, "this is definitely not a national supply chain crisis," John Hopkins operations management professor Tinglong Dai said Wednesday. "The effect will be mostly local, mostly minimal and mostly temporary." The bridge collapse and port closure is also unlikely to trigger a global supply chain crisis, he said. The Port of Baltimore is an important but "niche" port specializing in automobile imports and exports, Dai added. "The supply chain has evolved...I have already seen a lot of rerouting happening." Automakers started adjusting their supply routes away from the top port for US vehicle imports the day of the collapse, including General Motors, Ford and Mercedes-Benz. Baltimore is also a major port for coal exports, which may start to shift to terminals to the south in Hampton Roads, Virginia. Freight rates for ships that carry coal could see increases in global markets Other commodities like asphalt and caustic soda that move through the port will see challenges, while organic agriculture imports may see less problems due to seasonal flows. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Baltimore accident starting to strain US caustic


28/03/24
News
28/03/24

Baltimore accident starting to strain US caustic

Houston, 28 March (Argus) — Caustic soda distributors near Baltimore, Maryland, have started applying a logistics fee to all future deliveries to account for longer truck transits following the collapse of the Francis Scott Key Bridge earlier this week. Caustic soda storage the northeast US was already tight before the bridge accident. While market participants have caustic soda tanks outside of Baltimore, several in the region are out of service due to maintenance. Additionally, US Gulf coast producers have struggled to supply tanks in the northeast because of difficulties loading vessels on time. US producers have been stretched thinner on inventory throughout the first quarter due to a variety of unplanned outages, as well as planned maintenance taking longer than anticipated. US producers have been sending more material to the northern US east coast, including by Jones Act vessels, to account for reduced availability out of Europe in recent years. High energy costs in Europe have forced a reduction in operating rates for some time. As US-based supply and logistics have been complicated, a distributor indicated it has a vessel destined for Baltimore in the next few days that is being redirected to other tanks on the east coast. US chlor-alkali producers have announced price increases for caustic soda contracts in April between $35-75/dst. These increases have been announced over the course of several weeks, but may carry additional weight following the bridge collapse. With tighter inventories in the region, even buyers that are skeptical of rising prices are concerned about the ability to fight a price increase at the moment. By Aaron May Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Baltimore probe includes potential contaminated fuel


28/03/24
News
28/03/24

Baltimore probe includes potential contaminated fuel

New York, 28 March (Argus) — Federal authorities are examining whether the containership that crashed into the Francis Scott Key Bridge in Baltimore, Maryland, was burning contaminated marine fuel at the time of the incident. The National Transportation Safety Board (NTSB) said it will collect a sample of the fuel on board the 116,851-dwt container vessel Dali as part of its investigation into why the ship lost power and hit the bridge support early on 26 March, taking down the span. "That sample will be taken, and we will analyze the quality, any sort of contaminants, we will look at viscosity," NTSB chair Jennifer Homendy said this week. "That will be part of our investigation." Shipboard power is generally generated by turbines connected to the same engines driving propulsion. There are a number of issues related to fuel that could have led to a loss of power on the ship, according to Wajdi Abdmessih, chief executive at Seahawk Services, a marine fuel testing company based in New Jersey. The fuel on the ship could have been contaminated, as was the case last year when contaminated very low-sulphur fuel oil was found on a number of ships fueld through a Houston, Texas, bunkering operation, or it could have been a compatibility issue with the vessel's engine, where the fuel was not optimized for the equipment. "If the vessel switches between different types of fuels, compatibility and stability issues could occur, which may cause a problem with the engine," Abdmessih said. "Unstable fuel could cause increased sludging and high sediment, which could clog the filter and cause fuel starvation and engine downturns." Singapore-based Synergy Marine Group, which manages Dali , said it is taking part of this investigation but declined to comment possible causes of the accident, including possible fuel contamination. The pilots on board the vessel lost control because of a loss of propulsion, according to the Maritime and Port Authority of Singapore (MPA), which is assisting in the investigation because Dali was sailing under the Singapore flag. An issue with the ship's propulsion and auxiliary machinery was discovered during its June 2023 inspection in San Antonio, Chile , according to Equasis, a vessel information database. The problem involved the vessel's gauges and thermometers, according to the data. Its most recent inspection was in September 2023, but there are no indications of issues from the inspection. The vessel's next inspection was due in June 2024, the MPA said. By Luis Gronda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Baltimore closure to have limited effects on organic ag


28/03/24
News
28/03/24

Baltimore closure to have limited effects on organic ag

Washington, 28 March (Argus) — The indefinite closure of the Port of Baltimore after a bridge collapse Tuesday morning will likely have a limited short-term impact on organic agriculture imports due to seasonal trends and the location of key import infrastructure. While Baltimore is the US' largest organic ag import port by volume, April is historically the month with the smallest volume of organic imports into the port. About 5,000 metric tonnes (t) of organic corn, soybean, sunflower, and canola products combined come through Baltimore in April on average for the past three years, according to Argus data. May organic agricultural imports through Baltimore average about 17,000 t, but the largest volumes are not expected until the third and fourth quarters, according to Argus organic market research. Organic whole soybeans and soybean meal are the main commodities imported to Baltimore in April which will likely be curtailed. This includes container shipments of organic soybeans and soybean meal from African countries and India, and organic sunflower products from Argentina. Bulk organic shipments to Baltimore are less likely to be curtailed by the port closure since most of those come through facilities at Sparrows Point, which is outside the port and still accessible, according to market participants. In 2023, 92pc of the volume of organic agriculture corn, soybean, sunflower, and canola products imported to Baltimore in April and May was via bulk shipments. On average, 90,000 t of organic corn and 110,000 t of organic soybean products enter the US through Baltimore annually. This accounts for roughly 32pc of total organic corn and 21pc of total organic soybean product imports to the US. Total impact of the port closure on the organic agriculture market is still uncertain, but for now shippers are diverting to other ports in light of the closure. By Rachel Nelson US organic imports into Baltimore (2021-2023 average) 1,000 T Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more