The rail backlog that has angered the North American grain industry and led to the ouster of one railway chief has spread to chemical and metals companies, who say unreliable train service is causing plant shutdowns and lost sales.
Bob Masterson, chief executive of the Chemistry Industry Association of Canada, said inadequate rail service has disrupted production at 13 plants, including five that had “complete shutdowns.” Eight companies said the rail problems extended to their customers, who also had to halt production because of delayed train deliveries, he said, declining to identify the companies.
Teck Resources Ltd., a miner that says it is the biggest customer of Canadian Pacific Railway Ltd. and the country’s biggest rail shipper, claimed rail service failures have cost it hundreds of millions of dollars in the past decade.
“Perennial rail service challenges have impacted Teck’s competitiveness, our national supply chain’s long-term economic sustainability and Canada’s global reputation as a trading nation,” the company said in a letter to a Senate transport committee in February. CP declined to address Teck’s comments.
Canada’s two major railways, CP and Canadian National Railway Co., said an unexpected rise in freight volumes, combined with a cold and snowy winter, have caused railway congestion and slowdowns.