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By Jesse Gill

Shipping by truck not realistic for a pair of Medicine Hat businesses if railway shuts down

Aug 20, 2024 | 4:56 PM

A phased shutdown of the networks at Canadian Pacific Kansas City and Canadian National Railway is already underway as the clock ticks down on labour negotiations, putting a pair of Medicine Hat businesses in a pinch with trucking not a realistic option.

Methanex said in a statement Tuesday it’s been working on ways to keep it’s Medicine Hat plant running in the event of a national railway stoppage.

The statement from Methanex included that 75 per cent of it’s product is shipped out by CPKC – and there is no Plan B if there is a disruption.

Methanex said it’s been working on ways to keep it’s Medicine Hat plant running in the event of a national railway stoppage. Ross Lavigne/CHAT News

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Karen Proud, president and CEO of Fertilizer Canada, said CF Industries in Medicine Hat, ships out a similar per cent of their product by rail, and shipping by truck isn’t really an option.

“There are not enough trucks on the road to deal with fertilizer products. There just aren’t,” Proud said.

“The costs are really significantly more. For a product that is meant for farmers, we can’t add the extra cost into the system, even if that was an option.”

Karen Proud, CEO and President of Fertilizer Canada, said there are not enough trucks on the road to deal with fertilizer products and the costs to ship this way are significantly more. Jesse Gill/Zoom

A statement from Methanex also said that a production shutdown wouldn’t happen immediately in the event of a rail stoppage, but with limited storage capacity, a loss of rail service, even for a short period could result in a shutdown of it’s facility here.

Bob Masterson, president and CEO of the Chemistry Industry Association of Canada, said in their industry a shift to truck only wouldn’t be realistic.

“We move 500 rail cars each and every day, over 500 cars, 365 days a year,” Masterson said.

“Could you move that by truck? Some of it maybe, but you’re talking about another 1,500 trucks. There aren’t 1,500 spare trucks just for chemistry. There aren’t 1,500 extra drivers,” he added.

“The cost to move over long distances, the times involved are prohibitive.”

Bob Masterson, President and CEO of the Chemistry Industry Association of Canada said on Monday that there aren’t enough trucks on the road to support their industry. Jesse Gill/Zoom

Proud said there has been an awareness in the fertilizer industry, since early in the year of a potential rail strike, and those in the industry have been doing their best to plan.

“If there’s an ability to schedule maintenance during the time frame in which we’re gonna have a shutdown, our members would opt to do that instead of having to force a shutdown,” Proud said.

“But there’s only so much preparation you can do.”

Proud said rail travel is already basically at a standstill for fertilizer, as it can’t sit stuck in rail cars for long periods if there is a railway work stoppage.

Adding that the lack of rail cars picking up items, has already been felt at the port in Vancouver.

“If you don’t have rail cars going to pick stuff up, you don’t have ships unloading stuff. And so that comes to a stop as well,” Proud said.

“It’s not just about the movement of rail. It follows the whole supply chain. And really, I know we’re not in a strike position today, but the slowdowns and the stoppages have already started,” she added

“Our members, including CF, have limited storage capacity. So at a certain point in time, they won’t be able to continue to produce.”