The head of Canada's largest railroad said the North American supply system is facing unprecedented demand in the weeks ahead as a bumper grain harvest nears its peak so the United States must avoid a looming national rail strike.
Tracy Robinson, chief executive of Canadian National Railway Co., said her company has contingency plans in case negotiations between the major American railroads and unions break down.
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Robinson said at the Morgan Stanley conference that they were doing everything they could to prevent that from happening. People don't want a labour shutdown.
A network that spans across Canada, through the U.S. mid-west, and down to the Gulf of Mexico is owned and operated by Canadian National. One of the major freight railroads is in negotiations with unions. Pressure is building for the U.S. President Joe Biden to intervene in the talks to avoid a supply chain crisis.
Robinson's railroad is bracing for a surge in demand for railcars to move strong grain harvests in Canada and the U.S., as well as renewed demand for cars to move more coal.
There will be record demand for the rest of the year in the western part of the network. Robinson said that they were prepared for it. We need to fix the labour situation in the United States if we want to get done. It is important for all of us. It is hard for us to do it. We want to do something.
According to the company's annual grain plan, it will need rail cars to move up to 27 million metric tones of grain in Canada alone.
The Canadian grain industry would not be affected by a U.S. rail strike, according to Richard Grey.
He thinks there isn't a big impact. It might give you a big problem if you try to ship oats to Minneapolis.
Canadian grain companies are worried that delays in the US could affect the domestic rail system. Some of the Canadian railroads could end up with trains stuck in the U.S. because of backups with U.S.-bound freight, according to the executive director of the Western Grain Elevator Association.
Most of the Canadian grain is moved with Canadian crews. There could be some implications when you get deeper into it. Grain companies are telling their customers that they will not be able to get their product if there is a problem.
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