Rail Strike to Cost Millions Daily to Fertilizer Industry: Fertilizer Canada

Fertilizer Canada has issued a stark warning about the severe economic impact that potential rail disruptions could have on the fertilizer industry. The group estimates that the disruptions could lead to a staggering loss of C$55-63 million ($40.3-46.2 million) in daily sales revenue. With the threat of a strike looming, Fertilizer Canada is urgently calling on the federal government to intervene and prevent a work stoppage by both major railways. The organization is advocating for binding arbitration to prevent Teamsters Canada Rail Conference (TCRC) from initiating a strike and to stop CN Railway and Canadian Pacific Kansas City (CPKC) from executing their lockout notices.

The situation is critical, as both railways have already issued lockout notices to TCRC starting from August 22, while TCRC has announced its intention to strike against CPKC from the same date. Karen Proud, President and CEO of Fertilizer Canada, emphasized the urgency of the situation, stating, “The time for action is now. We can no longer patiently wait for a resolution. The federal government must protect Canada’s economy and food security by ordering binding arbitration.”

The railways play a crucial role in the fertilizer industry, moving an average of 69,000 tonnes of fertilizer per day, which equates to four to five trains. This makes the railways indispensable for the industry's operation. As of August 12, disruptions had already begun, with some ammonia products being halted due to embargoes. This has escalated, with further embargoes imposed and US railways also halting shipments to Canada.

Currently, rail transport is responsible for 75% of all fertilizer movement within Canada. Alternatives are limited, and rail is especially vital for transporting 90% of the fertilizer destined for the US market. The potential strike threatens to exacerbate these issues, leading to significant operational disruptions.

Proud highlighted the long-standing issues the industry has faced with supply chain disruptions, noting, “In the last seven years, Canadian supply chain labor disruptions have cost the fertilizer industry nearly a billion dollars.” These ongoing issues have severely damaged Canada’s reputation as a reliable trading partner, forcing customers to seek alternatives from countries such as Russia, Belarus, and China.

Fertilizer Canada, representing producers, manufacturers, and distributors of nitrogen, phosphate, potash, and sulfur fertilizers, stresses that immediate action is essential. Proud argues that the industry cannot afford further disruptions or a passive approach to its supply chains. “We can’t afford for our railways to shut down, and we can’t afford a passive approach to our supply chains any longer. We need long-term solutions,” she said.

The group's call for federal intervention underscores the critical need for a resolution to prevent further damage to the industry and maintain Canada's position in the global fertilizer market.