Railroad container shipments plummet due to BC Port Strike about to end
Railroads suffered a sharp drop in container shipments this month as BC’s longshoremen’s strike – now set to end after a tentative deal Thursday – ground more than half of its steel-box cargo to a halt. brought.
Canadian national Railway According to RBC Dominion Securities analyst Walter Spracklin, Co. — a key industry metric used to measure revenue and cargo volume — in the first week of the vacancy by 60 percent.
The figure fell 45 percent at Canadian Pacific Kansas City Ltd.
The plunge has pushed the number of containers carried by Canadian railroads last week to barely half the level it reached during the same period in 2022, according to the American Railroad Association.
The corrugated cardboard boxes, which carry everything from consumer products to auto parts, are a vital source of revenue for Canada’s two major railroads, accounting for about a quarter of annual revenue.
But the railways, an overland lifeline for the ports, breathed a sigh of relief on Thursday after the International Longshore and Warehouse Union Canada and the BC Maritime Employers Association reached a preliminary agreement based on the recommendations of a federal mediator.
Some 7,400 waterfront workers left their jobs on July 1, with wages, automation and outsourcing the main sticking points in the negotiations. For 12 days, the strike halted shipments to and from about 30 ports in British Columbia, including the port of Vancouver, Canada’s largest.
Nevertheless, Spracklin said the large dent in the container cargo was likely to have an impact railway revenue, as 37 percent of CN’s total vehicle loads come from Vancouver and Prince Rupert, BC. About 20 percent of CP’s shipments pass through Vancouver ports.
That said, we note that historically, external disruptions, including cold weather, blockades and strikes, have not impacted stock prices or valuation at Canadian Railways, despite the resulting (temporary) negative impact on quarterly results. Spracklin said in a statement. note to investors.
The effect of jammed containers rippled past the tracks, hitting small business owners especially hard. The Canadian Federation of Independent Business said earlier this week that more than half of companies surveyed will be affected by the strike.
Paul Edgerton, founder of PureLite Glass in Ajax, Ont., said 60 percent of the materials he uses to make windows for homes and commercial buildings come from Asia via the West Coast.
“It’s starting to run out,” he said. “And the recovery period will be at least four weeks.”
Equally worrying are the manufacturer’s 21 employees. “How am I going to help them feed their families and pay their bills if I can’t sell? Because I have no product to sell.”
The materials PureLite uses range from glass to polysulfide and silicone, all imported.
“Many of our forwarders have completely removed the name of the ship from the consignment note. So we don’t even know what boat it will go on — there’s no date when it will arrive,” Edgerton said.
Components from alternative source countries, such as the United States, are either unavailable or “through the roof in price”.
“It has a huge impact,” he said – even as the strike is about to wind down.
The preliminary four-year agreement remains subject to ratification by both parties, the employers’ organization said in a statement Thursday.
