North American agriculture logistics could derail if wage-demanding union workers at a duo Canada rail monopoly down tools, starting August 22, 2024.

The looming strike involves the agriculturally important Canadian National Railway (CNR) and Canadian Pacific Kansas City (CPKC). According to a Reuters report on August 2020, a strike on both lines could halt much of their daily freight services.

An immediate ramification will be on American spring wheat, currently under shipment from Minnesota and the Dakotas to Western ports. 

Notably, the U.S. ships its Midwestern spring wheat via Canada where the CPKC rail meanders towards Western U.S. ports. 

Soybeans and corn, whose harvests start in fall, follow a similar shipping route and rarely use alternative truck transportation.

Even though American rail workers will not strike, U.S.’ supplies will still delay given the shared nature of rail lines.

Faced with such logistical dilemmas, tens of organizations have contacted Canada’s PM Justine Trudeau to avert the strike.

One such body is the American National Grain and Feed Association (NGFA), which sent a plea to Trudeau on August 19.  

In the letter, NGFA cited that the strike could hamper cross-border economies and even have global food security ramifications.

Indeed, the Pacific rail is the gateway to Canada’s lead exports such as canola, whose fall export season is approaching.

Back at home, the Teamsters Union, which represents 10,000 employees was still negotiating a deal as of August 21.

The union is negotiating issues to do with wage increase, work scheduling and bonuses for its workforce. 

A breakthrough would positively impact many regional agricultural stakeholders from U.S.’ potash importers to Canada’s grain exporters.

Interestingly, Canada ships 85% of all its potash fertilizer exports to the United States via rail. 

Like their American counterparts, farm groups in Canada, also sent a letter to PM Trudeau on August 20. In the letter they cited that a strike would stop the usual 25,000 weekly agricultural railcar loads.

In a word, a Canada rail strike would at any time have big regional and global agricultural supply consequences. As the following statistics show, the Canadian rail system boasts diverse agricultural shipments.

Canada Rail’s Agricultural Statistics

The Canadian rail system conveys agricultural shipments including grain, fertilizer and livestock products. In the 2020-21 period, for instance, services by Canadian National Railway and Canadian Pacific Railway delivered 31 million tonnes of grain. This was 1 million tonnes more above the 2019-20 period, according to AG Canada.

What are the average monthly freight total of Canada’s railways including to the U.S.? 

According to Statistics Canada, national railways transport around 32.1 million tonnes of loads of all types, using the November 2022 data. Out of these, the U.S. received a rail freight total of 3.5 million tonnes, most of which grain.  During this November 2022 period, Canola shipments by rail were up 418,000 tonnes from those of November 2021. 

Which are the two key agricultural exports of the Canadian rail? 

Grains such as spring wheat lead yearly exports at around 30 million tonnes, as of the 2019-20 period. Canadian potash is another major commodity, with 85% of its yearly shipment total of 13 million tonnes departing to the U.S. by rail.  This is the equivalent to 69,000 tonnes of fertilizer on a daily basis or a minimum C$55 million ($40.387 million) a day.