A pending strike at CP Rail will hit Manitoba farmers especially hard, says Dan Mazier, president of the Keystone Agricultural Producers (KAP).
“Sixty-two per cent of all Manitoba car orders are with CP,” Mazier said in an interview April 23.
In Manitoba there are 50 and 29 grain elevators on CP and CN Rail lines, respectively, KAP says based on Canadian Grain Commission data.
Members of the Teamsters and IBEW (International Brotherhood of Electrical Workers) unions were set to strike CP Rail April 21, but postponed it until union members could vote on CP’s final offer.
“The fact that CP thinks its offer has a chance in hell of being ratified shows how out of touch it is with its employees,” Steve Martin, senior general chairman from IBEW System Council No. 11 said in a news release. “The company is in for a wake-up call.”
- Read more: Strike action postponed at CP
- Read more: CP talks said stagnating as strike deadline looms
- Read more: Grain handle down, costs up in CP’s Q1
CP has a plan if there is a strike, company chief executive officer Keith Creel said April 18. CP will not sign a bad agreement that threatens the company’s long-term profitability, he said.
Any strike would exacerbate an already bad grain backlog that’s piled up over the winter, and a large carry-over with the new growing season starting.
Although it has been CN Rail’s poor shipping performance that has made the headlines, CP Rail’s service has been getting worse on average delivering on time just 42 per cent of the cars Manitoba shippers had between crop year weeks 33 and 36, Mazier said.
Grain industry observers had expected without a CP strike Western Canada would have a 12-million-tonne grain carry-over, instead of the normal (10 per cent of production) seven to eight million tonnes, Mazier said.
“That means more challenges selling next year’s (starting Aug. 1) crop,” he said.
If there’s more grain on farms grain prices may not be as good.
In the meantime, Canada’s reputation as a reliable supplier is tarnished, despite its reputation for top-quality product, Mazier said.
Both CN and CP were unable to meet grain shippers’ needs in 2017-18 because they cut too many resources in an effort to produce higher shareholder returns, he added. But while CN has been shipping more grain since March “CP is definitely not stepping up here,” Mazier said.
“CP is focused on moving as much grain as possible,” company spokesman Andy Cummings said in an email Monday. “We are working directly with our customers to move grain with consideration to their sales pipeline needs.”
For the week ending April 21, CN delivered 6,383 grain cars across Western Canada, compared to 6,038 and 5,786, the previous two weeks, respectively, CN official said in an email.
“This week we fulfilled all of our orders and are getting ready to do the same for this coming week,” wrote Kate Fenske, CN’s manager, Manitoba Public Affairs and Western Canada media relations. “As you can see, the immediate steps we have taken are yielding results. We were delivering 4,129 cars a week on average in February and we have been able to exceed 5,500 cars for seven consecutive weeks.
“We also committed to providing, by Aug. 1 of each year, a report on our ability to move the grain we are required to move during the crop year. We also committed to publish, by Oct. 1 of each year, a winter contingency plan for the movement of grain.”
KAP has written the federal government asking it to keep grain moving on CP.
“There is no hope of cleaning the backlog up and reducing the projected carry-over if CP goes on strike,” Mazier said. “Both railways need to move the crop and deal with the carry-over.”
The Grain Growers of Canada, Cereals Canada and many other groups have also written Ottawa asking it to keep grain moving.
As of week 36 CN and CP delivered 83 and 53 per cent of car orders on time on average across the West, the Ag Transport Coalition’s report says.
“CP is already performing poorly,” Wade Sobkowich, executive director of the Western Grain Elevators Association (WGEA) said in an interview April 18. “We’re already looking at unfulfilled demand on CP all year and it’s been getting worse while CN has been getting better over the last six weeks. A strike on CP, its 50 per cent (car fulfilment) will go down to zero. And it will only add to the backlog and add to the carry-out at the end of the year and exacerbate the situation that we’re already experiencing with poor service. And the longer it goes on the worse it is. That’s lost capacity. We’ll still use as much capacity as the railways give us and we will be doing that for the foreseeable future.”
However, if trains do arrive at elevators on time getting farmers to deliver will get harder as they focus on spring seeding and contend with load weight restrictions on highways, he said.
The WGEA fears neither CP nor its union has much to lose in a strike, at least with grain shipping. That’s because shippers have no real alternative but the railway, Sobkowich said.
“In this case we have captive shippers that are feeling the hurt and we have no control over the process,” he said. “And so it’s different than a normal collective bargaining process when you do have competitive options.”