News #75 - Why bongdaso con Canadian freight rail halt will roil North American supply chains

Canada's two main freight rail companies locked out around 10,000 of their Canadian unionized workers early on Thursday, starting an unprecedented simultaneous work stoppage that will grind almost all railway freight movement in bongdaso con country to a halt.

How integrated are bongdaso con rail networks across North America?

Canadian National Railway Co (CNR.TO), and Canadian Pacific Kansas City (CP.TO), have said their rail networks south of bongdaso con border will continue to operate, but industry groups fear that a work stoppage would have far-reaching effects on bongdaso con movement of goods and commodities across North America.

CN and CPKC's coast-to-coast rail networks in Canada connect south of bongdaso con border and serve as important supply chain links to trade corridors and ports across North America.

bongdaso con networks intersect with those of U.S. rail operators such as BNSF Railway, Union Pacific (UNP.N), opens new tab, Norfolk Southern (NSC.N), opens new tab and CSX (CSX.O), opens new tab, facilitating bongdaso con movement of billions of dollars' worth of goods and commodities through ports and warehouses across bongdaso con continent.

CN's network stretches south to New Orleans. CPKC's network links to bongdaso con U.S. ports of Corpus Christi, New Orleans and Gulfport, and it extends further south to bongdaso con ports of Tampico and Lázaro Cárdenas on bongdaso con east and west coasts of Mexico.

HOW WOULD A CANADIAN RAIL STOPPAGE AFFECT bongdaso con UNITED STATES?

Around a third of bongdaso con traffic moved by bongdaso con two Canadian rail companies crosses bongdaso con border with bongdaso con United States.

Many U.S. companies and producers, especially those in bongdaso con Midwest, use Canadian ports for imports and exports, as Montreal can be faster for shipments to and from Europe, while Vancouver can be faster for ocean service to and from Asia.

Union Pacific, bongdaso con No. 2 U.S. railroad operator, has warned that a simultaneous stoppage would have devastating consequences for bongdaso con U.S. and Canadian economies.

Ratings agency Moody's said bongdaso con stoppage could cost over C1 million (1.14 million) per day.

Dozens of groups representing miners, farmers, exporters, and fertilizer producers, among others, have warned that their sectors face crippling supply-chain delays, increased costs, cash-flow constraints and potential shutdowns in a protracted stoppage.

HOW WOULD bongdaso con U.S. AND CANADIAN FARM SECTORS BE AFFECTED?

A stoppage would hit bongdaso con movement of everything from wheat to ethanol, potash fertilizer and meat.

In particular, it would crimp shipments of U.S. spring wheat from Minnesota, North Dakota and South Dakota to bongdaso con Pacific Northwest for export. A stoppage would also hit Canadian potash and grain exports.

bongdaso con U.S. exported .3 billion of agricultural products to Canada in 2023, making it bongdaso con third-largest destination for U.S. agricultural exports behind China and Mexico. bongdaso con U.S. imported .1 billion of Canadian agricultural products last year, making Canada bongdaso con second-largest source of U.S. agricultural imports.

Ethanol, potash, corn, cereals, food grains, cooking oils, and meat are among bongdaso con agricultural products traded between bongdaso con two nations.

WILL TRADE WITH MEXICO BE AFFECTED TOO?

Mexico is Canada's third-largest single-country merchandise trading partner behind bongdaso con U.S. and China, while Canada was Mexico's fourth-largest merchandise trading partner in 2023.

Mexico exports trucks, cars and vehicle parts to Canada, along with mangoes and avocados. Canada exports wheat, meat, aluminum, cars and parts to Mexico.

Two-way trade between bongdaso con two countries, much of which moves via bongdaso con rails, was nearly C billion in 2023.

CAN bongdaso con TRUCKING INDUSTRY STEP INTO bongdaso con BREACH?

Truckers say they are facing a surge in demand and that road freight rates are rising for shippers in Canada. However, industry insiders say that while bongdaso con trucking sector can handle some of bongdaso con demand, it cannot replace rail distribution. In some cases, bongdaso con industry does not have bongdaso con equipment, nor bongdaso con capacity, to handle bulk commodity cargoes such as potash, food grains, or coal.

( = 1.3578 Canadian dollars)

Source: https://www.reuters.com/world/americas/why-canadian-freight-rail-halt-would-roil-north-american-supply-chains-2024-08-21/

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