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Grain shippers worried as CN Rail workers strike

WATCH: More than 3,200 CN Rail workers nationwide are on the picket lines after failing to reach a deal with the company. Heather Yourex-West looks at how the dispute will affect the industries that heavily rely on trains.

Grain shippers are concerned about the impact of a strike by about 3,200 Canadian National Railway Co. workers in an already tough harvest year.

The Teamsters Canada Rail Conference announced the work stoppage Monday night after the two parties failed to reach a deal by the midnight deadline.

Conductors, trainpersons and yard workers were on the picket lines, halting freight trains across the country and triggering worries about lost sales and contract penalties among grain elevator operators and farmers.

READ MORE: Over 3,000 Canadian National Railway rail workers on strike — union

“When you lose a day of shipping you never recover it,” said Wade Sobkowich, head of the Western Grain Elevator Association.

“There’s really nothing that can be done. Once they’re not moving trains, you’re basically shut down without any alternatives until the issue is resolved.”

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CN services about half the elevators in Western Canada, Sobkowich said, on top of exclusive access to the grain terminal on Vancouver’s North Shore and the port in Prince Rupert, B.C.

The federal government urged CN Rail and the Teamsters Canada Rail Conference to continue negotiating.

Labour Minister Patty Hajdu said Tuesday the government is concerned about the impact of a work stoppage on Canadians, but remains hopeful the two sides will reach an agreement.

READ MORE: Government meets with CN Rail, union in effort to avert strike

Union spokesman Christopher Monette said they are still in talks with CN in hopes of reaching ending the labour dispute as soon as possible.

The union has said passenger rail services in the country’s three biggest cities would not be affected by the strike.

A delayed grain crop has already caused headaches for the industry following a dry spring and wet summer. Though the yield was big, some of it remains in the field, increasing pressure on the rail system.

Approximately 3,200 CN Rail workers prepare to strike
Approximately 3,200 CN Rail workers prepare to strike

Meanwhile wet Prairie weather produced a crop with more mildew, sprout damage and frost. A worse product means lower prices, affecting all players along the supply chain, Sobkowich said.

Canola exports have also slumped following China’s ban on Canadian canola.

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The threat of a strike has already had an impact, as grain companies and foreign importers cut back on orders to avoid paying contract extension fees, demurrage charges “or, God forbid, defaulting on a contract,” Sobkowich said.

The railway workers, who have been without a contract since July 23, have said they’re concerned about long hours, fatigue and what they consider dangerous working conditions.

READ MORE: 2.7 million acres of canola left buried under snow in the Canadian prairies

The dispute comes as CN confirmed last week that it was cutting jobs across the railway as it deals with a weakening North American economy that has eroded demand.

Janet Drysdale, CN’s vice-president of financial planning, said Tuesday the layoffs were aimed at “aligning the overall labour expense to the reality of what we’re seeing on the demand side.”