The Renewable Fuels Association has signed on to a letter from U.S. agricultural supply chain interests to Canadian Prime Minister Justin Trudeau, asking him to take action to ensure railroad operations continue to prevent serious damage to the Canadian and U.S. economies.
Canada’s two largest railroads, Canadian Pacific Kansas City and Canadian National, are in a labor dispute that threatens to cause lockouts or strikes that would disrupt cross-border trade with the U.S. Both said over the weekend they would start locking out union workers this week.
The letter from 35 U.S. organizations stressed the critical importance of rail transportation to the agriculture industry. “Agriculture ships more than 25,000 cars per week and this figure will go to zero during a strike or lockout,” they wrote.
Agriculture is particularly exposed to rail stoppages due to robust fertilizer and other agricultural input trade and a sizable livestock industry that depends on rail for the timely delivery of feed grains, dried distillers grains, and further feed ingredients. Additionally, many facilities, such as biofuels operations, flour mills and other agricultural operations require uninterrupted rail service. In the event of an interruption, they quickly run out of storage capacity and incur shortages of incoming raw materials. In addition, shutting down and restarting these facilities are complex operations, meaning that even a short-term disruption could stop production for several weeks.
RFA submitted comments last week to the Surface Transportation Board in response to a request for input on recent trends and strategies for growth in the freight rail industry.
“The relationship between the freight rail industry and ethanol industry is closely intertwined, as roughly three-quarters of U.S. ethanol is shipped by rail,” wrote Justin Schultz, RFA’s director of environment, health and safety. “Efficient, reliable, and effective transportation services are crucial for this industry, which relies on rail, truck, and barge transportation for both inbound products (grain) and outbound fuel (ethanol). Rail is increasingly utilized due to its efficiency in bulk shipping.”
RFA also submitted a new study showing that rail shipments of ethanol and grain are disproportionately affected during periods of rail capacity constraints and widespread service interruptions.