Low water on US rivers disrupts coke shipments
Historically low water levels on the Mississippi river have slowed petroleum coke shipments by barge and may delay export shipments and calcined coke movements as carriers load less tonnage on barges and limit barge tow sizes to avoid groundings.
The lower Mississippi river, a key waterway to ship coke from refineries in the midcontinent as well as the Louisiana Gulf, was closed for multiple days over the past week as barge groundings blocked traffic and required dredging. This resulted in thousands of barges getting backed up near Memphis, Tennessee, and Stack Island, Mississippi, in what was "the largest closure ever recorded," according to major carrier American Commercial Barge Line. The closure lasted from 4-9 October. Then, on 10 October, the Ohio river was forced to close until early 11 October because of multiple barge groundings in the Mound City, Illinois, area, just north of where the Ohio meets the Mississippi near Cairo, Illinois. The upper Mississippi also had to close for dredging at Cape Girardeau, Missouri, between Cairo and St Louis, on the afternoon of 10 October and was expected to reopen 11 October.
Even with traffic resuming on these waterways, the low water levels will delay coke shipments. The US Coast Guard has limited vessel drafts to a maximum of 9.5ft and tow sizes to five barges along some stretches of the lower Mississippi river since late September in response to the lower water conditions. Drafts have been reduced to 9ft for the Ohio, Tennessee and Cumberland Rivers.
This has curbed the amount of petroleum coke that can be loaded on each barge. One coke buyer said its recent barges were loaded 300-400t lighter than typical, at about 1,600t. This increases the number of barges needed to transport the same volume of coke along the river, while also keeping spot barge rates elevated.
Argus spot rate assessments for northbound fertilizer barges from New Orleans to terminals between Old River, Arkansas, and Cairo, Illinois, rose to a record high of $32.25/short ton on 25 August and have held steady at this level since then. This is more than 25pc higher than their previous spike between August and September last year.
"Most of the petcoke business is booked on an annual basis so I don't expect an increase in the petcoke rates, but I do believe [the lower water levels] will slow down petcoke deliveries to New Orleans," a dry bulk carrier said.
But shippers' demurrage costs are also likely to increase as the low water leads to delays, such as last week's barge backup, and other longer term problems.
Hundreds of barges are waiting to have tonnage removed in order to be light enough to continue to move down the river. Labour shortages in the industry are also slowing down barges as there are fewer towboat crewmembers. And there is a shortage of barges themselves as the fleet was reduced after Hurricane Ida destroyed many vessels in late August last year. This tightness is increasing as the US is in its grain season.
"If the low water continues to persist, it's not unreasonable that some carriers may be forced to declare force majeure," the carrier said.
An average of 1.6mn st/yr of coke moved on the Ohio river system in 2016-2020, while an average of 2.3mn st/yr moved on the Mississippi river between Baton Rouge and New Orleans, Louisiana, during the same five-year period, according to the US Army Corps of Engineers.
Low water affects anode green and calcined coke
While the bulk of coke shipped downriver on the lower Mississippi river is fuel-grade coke, the anode-grade coke market could face shipping challenges as well.
Rain Calcining, Oxbow Carbon, and Alcoa each operate calcining units in the US Gulf and midcontinent and receive a significant portion of their anode-grade green petroleum coke (GPC) feedstock via barges, both from domestic and international refineries, as seaborne coke vessels are often unloaded into barges for further shipment to calciners.
The need for more barges and the potential for higher demurrage is likely to add to calciner's total GPC costs, a market participant said.
The low water on the Ohio river could affect calcined coke shipments upriver to smelters in this region as well.
"It could limit supply of calcined coke if the situation doesn't improve soon," one calciner said.
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Union plans new rail strike despite order: Update
Union plans new rail strike despite order: Update
Adds additional comment from Teamsters Canada Rail Conference Washington, 23 August (Argus) — The status of rail freight in Canada remains uncertain after a Canadian labor union today issued a new strike notice to Canadian National (CN), less than a day after the federal government ordered all parties to participate in binding arbitration. The Teamsters Canada Rail Conference (TCRC) today issued notice to CN that members will go on strike at 10am ET on 26 August. The union had not issued a strike notice to CN earlier this week, but employees could not work yesterday after the CN and Canadian Pacific Kansas City (CPKC) locked them out. The union said it moved to strike to "frustrate CN's attempt to force arbitration", and protect workers' rights to collectively bargain. CN had previously sought a federal order for binding arbitration. The government's back-to-work order yesterday sidestepped the collective bargaining process, and "undermined the foundation on which labour unions work to improve wages and working conditions for all Canadians", union president Paul Boucher said today. "Bargaining is also the primary way our union fights for rail safety — all considerations that outweigh short-term economic concerns," Boucher said. The union was more optimistic in its strike notice to CN this morning. "We do not believe that any of the matters we have been discussing over the last several days are insurmountable." It said it would be available to discuss issues to avoid another work stoppage. CN indicated it was frustrated with the union's action. "While CN is focused on its recovery plan to get back to powering the economy, the Teamsters are focused on returning to the picket line and holding the country hostage to their demands," the railroad said. CN last night had begun implementing a recovery plan to restore service . The union has not yet responded to inquiries about its action today. The office of labour minister Steven MacKinnon declined to comment. Rail operations at CN and CP stopped at 12:01am ET on Thursday after the union launched a strike at CPKC and both railroads locked out employees. That action ended late Thursday afternoon with the federal government directing the Canada Industrial Relations Board (CIRB) to manage binding arbitration on the railroads. CIRB, an independent agency, has not yet said if it will accept the government's order. CN began moving some freight early on 23 August, but the new strike order issued soon by the union today could disrupt those plans. The union has also challenged the constitutionality of MacKinnon's order regarding CPKC operations pending the outcome of a new ruling by the CIRB. CPKC's rail fleet remains parked in the meantime. CPKC said late Thursday it was disappointed in the minister's decision and sought to meet with CIRB to discuss resumption of service. CPKC said the union "refused to discuss any resumption of service, and instead indicated that they wish to make submissions to challenge the constitutionality of the Minister's direction." A case management meeting with CIRB occurred last night and another was scheduled for early today. Hearings are also underway to address preliminary issues, the union said. But the Teamsters said it was prepared to appeal the case to federal court if necessary. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Union plans new rail strike despite arbitration order
Union plans new rail strike despite arbitration order
Washington, 23 August (Argus) — The status of rail freight in Canada remains uncertain after a Canadian labor union today issued a new strike notice to Canadian National (CN), less than a day after the federal government forced all parties to participate in binding arbitration. The Teamsters Canada Rail Conference (TCRC) today issued notice to CN that members will go on strike at 10am ET on 26 August. The union had not issued a strike notice to CN earlier this week, but employees could not work yesterday after the CN and Canadian Pacific Kansas City (CPKC) locked them out. "We do not believe that any of the matters we have been discussing over the last several days are insurmountable," the union said today in its notice to CN. It said it would be available to discuss issues to avoid another work stoppage. CN indicated it was frustrated with the union's action. "While CN is focused on its recovery plan to get back to powering the economy, the Teamsters are focused on returning to the picket line and holding the country hostage to their demands," the railroad said. CN last night had begun implementing a recovery plan to restore service . The union has not yet responded to inquiries about its action today. The office of labour minister Steven MacKinnon declined to comment. Rail operations at CN and CP stopped at 12:01am ET on Thursday after the union launched a strike at CPKC and both railroads locked out employees. That action ended late Thursday afternoon with the federal government directing the Canada Industrial Relations Board (CIRB) to manage binding arbitration on the railroads. CIRB, an independent agency, has not yet said if it will accept the government's order. CN began moving some freight early on 23 August, but the new strike order issued soon by the union today could disrupt those plans. The union has also challenged the constitutionality of MacKinnon's order regarding CPKC operations pending the outcome of a new ruling by the CIRB. CPKC's rail fleet remains parked in the meantime. CPKC said late Thursday it was disappointed in the minister's decision and sought to meet with CIRB to discuss resumption of service. CPKC said the union "refused to discuss any resumption of service, and instead indicated that they wish to make submissions to challenge the constitutionality of the Minister's direction." A case management meeting with CIRB occurred last night and another was scheduled for early today. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Work stoppage begins at Canadian railroads
Work stoppage begins at Canadian railroads
Washington, 22 August (Argus) — Operations at Canada's two largest railroads ended Thursday morning at 12:01am ET as a work stoppage began following the failure of labor contract talks. Canadian Pacific Kansas City (CPKC) and Canadian National (CN) locked out union members, while the Teamsters Canada Rail Conference (TCRC) launched a strike at CPKC. The union has not yet issued a strike notice to CN , but its workers are barred from the property. The work stoppage freezes ongoing train shipments even if they have not reached their destinations. The railroads last week stopped loading railcars with shipments of certain toxic and poisonous materials to keep products from being abandoned in unsafe locations, and this week stopped loading all commodities and other freight within Canada. Operations along CN and CPKC's US lines continue but trains cannot cross into Canada. The union confirmed just after midnight that work stoppages at CN and CPKC had begun. Most Teamsters members stopped work at 12:01am ET, though rail traffic controllers at CPKC will keep working until 2:01am ET. CPKC and CN announced they had formally locked out employees represented by the Teamsters union. CN said the union did not respond to an offer it had made in a last attempt to avoid the strike. Wide range of commodities in crosshairs The work stoppage will affect freight deliveries for a variety of goods across North America, including shipments of propane to rural communities, grain and coal deliveries to Canadian export terminals, and chemical inputs to manufacturing facilities. CN said Wednesday that grain prices were already being affected and that sawmills in British Colombia were cutting shifts. Coal exports from Canadian mines would be held because those operations are only served by CN and CPKC. But western US coal exports are not expected to see much of a disruption since US carrier BNSF has rail lines going directly to Westshore Terminals near Vancouver. BNSF will not be able to interchange railcars with CN and CPKC in Canada, however. Crude markets are also not expected to see significant disruption from a strike in the short term because of pending maintenance at upstream oil sands facilities and spare pipeline capacity. Prices for Canadian propane and butane — which rely heavily on rail to move product from an oversupplied market to the US — fell Wednesday ahead of the strike. Wide gap between workers, railroads The railroads and the Teamsters remain far apart on contract terms. The union — which represents roughly 9,300 train operators and support staff at CN and CPKC and 85 rail traffic controllers at CPKC — said forced relocation and scheduling and fatigue management that will lead to safety risks are the key points of dispute. CN said its offers, which have been turned down repeatedly, would have improved safety, increased wages, and provided employees with better schedules. CPKC chief executive Keith Creel on 19 August claimed union leadership had made "wildly inaccurate characterizations" about the railroad's proposals in order to "create a false public narrative" about negotiations. He said the railroad did not unilaterally change or cancel the terms of the most recent collective agreement or make proposals that compromise safety. Creel said most recently CPKC has focused on a status quo-style contract renewal with a duration of three years. That proposal would have no work rule changes and the railroad only wanted to negotiate "reasonable adjustments" to the timing of held-away pay to address regulatory changes made by Transport Canada last year. CN called on Canadian minister of labour Steven MacKinnon to intervene this week. He has already been meeting with each railroad and the Teamsters. CPKC this week reiterated earlier calls for binding arbitration, but MacKinnon rejected that request on 15 August. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canadian rail labor talks continue as deadline nears
Canadian rail labor talks continue as deadline nears
Cheyenne, 21 August (Argus) — Canadian railroads and a major labor union are still in discussions in the final hours before workers could go on strike. Contract negotiations between Canadian Pacific Kansas City (CPKC), Canadian National (CN) and Teamsters Canada Rail Conference (TCRC) continued today, CPKC said. If there is no agreement tonight, the union at 12:01am ET Thursday could begin a strike against CPKC and each railroad could begin a lockout of workers. The Teamsters did not issue a required strike notice to CN, but a lockout would still shut its network down. Railroad customers and Canadian authorities are increasingly frustrated by the lack of agreement on new labor contracts. Teamsters members have been working under the terms of contracts that expired in December 2023. Canadian prime minister Justin Trudeau today urged the railroads and union to resolve the situation and avert a strike. "It is in the best interest of both sides to continue doing the hard work at the table to find a negotiated resolution," Trudeau said. "Millions of Canadians, of workers, of farmers, of businesses, right across the country are counting on both sides to do the work and get to a resolution." Canadian minister of labour Steven MacKinnon yesterday said he met with Ontario's labour minister and would be meeting with each railroad and Teamsters officials in Montreal and Calgary "to deliver our shared message: Get a deal at the table. Workers, farmers, businesses and all Canadians are counting on it." Union members have voted twice to authorize a strike, and each railroad has indicated it will lock out union members at the same time. The latest indication is the strike could happen as early as Thursday 22 August. "CPKC remains focused on and committed to arriving at a negotiated outcome that is in the best interests of all our railroaders and their families," CPKC said today. "We are firmly committed to staying at the bargaining table to reach renewed agreements." The Teamsters and CN did not respond to requests for comment. Last week, the railroads initiated embargoes on shipments of toxic inhalation hazards (TIH) and poisonous inhalation hazards (PIH) materials. Those products include chlorine, ammonia, ethylene and phosgene, as well as rail security-sensitive materials such as explosives. Each carrier has now stopped loading trains in Canada and are focused on delivering existing shipments. Railroads also have stopped shipping trains across the US and Canada border, suspending the movement of multiple products. US rail regulators are actively monitoring the situation, concerned about how a rail labor strike in Canada would affect the US rail network and supply chain. The US Surface Transportation Board said Wednesday it is monitoring the implementation and effects of those embargoes on the network. A number of US railroads last week either implemented their own embargoes or said they will comply with the Canadian embargoes. Western US coal exports are not expected to have much of a disruption if there is a strike since US carrier BNSF has rail lines going directly to Westshore Terminals near Vancouver. But BNSF will not be able to interchange railcars with CN and CPKC in Canada. Crude markets are also not expected to see significant disruption from a strike in the short term because of pending maintenance at upstream oil sands facilities and spare pipeline capacity. Prices for Canadian propane and butane — which rely heavily on rail to move product from an oversupplied market to the US — fell Wednesday ahead of the strike . By Courtney Schlisserman and Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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