Canada’s rail lockout, which shut down the country’s two largest railroads and halted all rail shipments crossing the US border, has huge implications for the US economy, news outlets said.
News reports indicated the main issues were “working conditions like shift scheduling and fatigue, which Teamsters spokesmen lumped together under “safety.” Pay does not seem to be the main issue.
The Canadian National Railway and the Canadian Pacific Kansas City railway locked out nearly 9,300 employees after midnight Thursday after contract talks with the Teamsters union failed to produce an agreeable contract, news sources said.
If the lockout continues, movement of goods throughout Canada would remain halted, and trade with the US, or even Mexico would be halted. This would include food, manufactured goods, wood products, potash and grain.
US and Canadian exports could be affected, news sources warned. Vancouver, British Columbia, is a major port for both countries, offering access to Pacific Rim countries and even to Europe. It Augments US ports in Seattle, Wash., Portland, Ore., San Francisco, Cal., Los Angeles, Cal., and Long Beach, Cal., and some smaller, but important, ports.
The BBC reported that about 75% of all goods exported by Canada come to the US, mostly by rail.
The market analyst said trucks could not make up the difference, and since many truck drivers also are Teamsters Union members, it’s doubtful they would cross picket lines to pick up or deliver freight to and from the railroads.
Trade industry organizations on both sides of the border are screaming about the possible effects of a prolonged work stoppage. Besides the millions of employees that would be affected by an unresolved work stoppage, some cited Canada\s reputation as a reliable trading partner.
BUT WILL IT LAST?
The key words to remember in this case are: “if the lockout continues,” a market analyst said. Prior work stoppages at either of the two railways resulted in management taking over and getting some shipments through, although operations were nowhere nearly as efficient as when regular crews were working at full staff.
The BBC reported that just hours after the lockout began, Prime Minister Justin Trudeau said the federal government was taking steps to resolve the work stoppage.
The analyst said prior strikes or lockouts at either of the two railways sometimes resulted in some type of government intervention in the dispute. The government could even pass a law requiring an end to the stoppage or require binding arbitration.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $185.00 per cwt to $196.79, compared with last week’s range of $184.41 to $196.56 per cwt. FOB dressed steers, and heifers went for $292.43 per cwt to $300.38, compared with $294.90 to $303.69.
The USDA choice cutout Thursday was up $0.78 per cwt at $315.99 while select was up $0.95 at $302.03. The choice/select spread narrowed to $13.96 from $14.13 with 104 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $372.44 per cwt, and 50% beef was $169.17.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.50 to $1.60 a bushel over the Sep corn contract, which settled at $3.71 ½ a bushel, down $0.04.
No live cattle contracts were tendered for delivery Thursday.
The CME Feeder Cattle Index for the seven days ended Wednesday was $242.67 per cwt, down $1.06. This compares with Thursday’s Aug contract settlement of $241.97, up $2.72.