Canadian Wheat Board wary of CP Rail strike threat

Mon May 14, 2007 12:35 PM ET

WINNIPEG, Manitoba, May 14 (Reuters) - The Canadian Wheat Board is concerned that the country's latest rail labor dispute could hurt its busy shipping schedule, a spokeswoman for the country's largest grain exporter said on Monday.

About 3,200 track maintenance workers at Canadian Pacific Railway Ltd. , Canada's No. 2 railway, gave notice on the weekend that they would strike starting early on Wednesday after contract talks failed to resolve wages and other issues, the railway and the Teamsters Canada union said.

"We really need strong rail movement right until the (July 31) end of the crop year," said Maureen Fitzhenry, spokeswoman for the Canadian Wheat Board.

"We've still got several million tonnes of grain to move," she said.

The farmer-controlled marketing agency was hit hard by a two-week strike of conductors and yard workers in February at Canadian National Railway Co. , Canada's largest railway.

That strike, which also hurt Canadian auto, chemical, energy, fertilizer and forestry companies, came on the back of slow service caused by severe winter weather at both railways.

"Customers have expressed concerns over Western Canada's ability to be a consistent, reliable supplier given the disruptions we faced with rail movement all year long," Fitzhenry said.

The CN Rail strike resumed for a week last month after union members rejected a tentative deal, but ended when Parliament passed back-to-work legislation.

A disruption at CP Rail lasting longer than a week could cost farmers extra storage fees as well as demurrage costs if ships are forced to wait for grain at the west coast port of Vancouver, Fitzhenry said.

The Canadian Wheat Board expects seven ships to arrive at west coast ports this week.

Other grain shippers expect six ships to arrive at Vancouver, the port's vessel loading schedule showed on Friday, mainly for canola.

The CWB needs to ship 1,000 to 1,200 cars per week on CP lines to Vancouver and 1,100 cars east to Thunder Bay until the July 31 end of the crop marketing year, Fitzhenry said.

The CWB expected to hear more from CP Rail about contingency plans later on Monday, she said.

On Saturday, CP Rail said it had trained more than 1,300 employees who could replace the roughly 1,200 of its unionized workers who directly maintain track at the railway.