CN ramps up rail service as grain, propane industries demand priority

MONTREAL — Canadian National Railway Co. says it is striving to address grain and propane backlogs as it ramps up service following an eight-day strike, but industry producers are demanding priority treatment that may not come.

The country’s largest railway ground to a near halt after 3,200 CN rail conductors and yard workers hit the picket lines last week, operating at 10 per cent capacity and stopping shipments of corn and canola, which sat in full silos that prevented further crop harvests for lack of storage space.

The delay added to the woes of a late harvest that had already put pressure on the rail network as grain producers fretted over demurrage fees and contract extension penalties.

“We don’t prioritize any commodities. When you’re in recovery mode, you’re focused on getting trains moving,” said Sean Finn, CN’s head of corporate affairs and chief legal officer.

CN is deploying extra resources as it tries to unclog its crowded rail yards, but extra product movement is not a guarantee, he said. The railway aims to move about 5,000 grain hoppers this week, versus nearly 6,900 cars the week before the strike.

“CN has indicated that they will not be opening up the floodgates. They don’t want to overwhelm the system, and we recognize that that is a concern,” Erin Gowriluk, head of the Grain Growers of Canada, said in a phone interview.

“But this is prime time for Canada’s grain sector, and the window is closing. Farmers need to get those crops into the bin, and what’s in the bin right now we need to get on track, literally, and off to port.”

Gowriluk described herself as “hopeful — I’m not sure I’m optimistic — but I think collectively we’re hopeful that the results will reflect their commitment, because the commitment, I think, is there.”

Farmers in Quebec faced the double crunch of stalled shipments and a propane shortage. The province began to ration the gas, which is used to dry crops as well as heat hospitals and nursing homes, the day after rail workers walked off the job on Nov. 19.

The Canadian Propane Association is calling on the country’s largest railway to give “priority support to replenish propane” in Ontario, Quebec the Maritimes. The industry group warned that unpredictable delivery could exacerbate the shortage at the onset of winter, when colder weather means shorter trains due to the effect on the air brake system.

Two trains filled with 10 million litres of propane each have already arrived in eastern Ontario and Montreal, said Finn.

“We think the propane challenge that was attributed to us during the strike is being addressed. And hopefully we’ll be in a position where most propane orders in the course of the next week will be filled,” he said.

In Western Canada, a $130-million backlog of Prairie grain may lose much of its value if trains can’t ship it to port before spring, when prices typically drop amid heightened global supply, said Western Grain Elevator Association executive director Wade Sobkowich.

“If you’re not getting enough cars or as many cars as you need — which is what happens in the rail freight sector in the winter period — do you ever actually make that up?” Sobkowich asked.

CN and Teamsters Canada reached a tentative deal Tuesday to renew a collective agreement, ending the longest rail strike since 2012 that halted shipments, triggered layoffs and disrupted industries across the country.

The rail workers, who have been without a contract since July 23, said they were concerned about long hours, fatigue and what they consider dangerous working conditions, while CN argued that the strike revolved more around wages.

Ratification of the settlement agreement is expected within eight weeks.

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