At midnight Eastern Time (ET) on August 21, Canada’s two primary rail companies, Canadian National (CN) and Canadian Pacific Kansas City (CPKC) simultaneously passed the deadline to reach a collective bargaining agreement with its combined workforce of nearly 10 thousand employees resulting in the simultaneous establishment of strike action by the employees and lockouts imposed by the two rail companies and the shutdown of rail transportation across the nation. This is the first time that a simultaneous shutdown of both Canadian rail companies has taken place and will affect dozens of industries that rely on rail for bulk transportation of goods and commodities.
The railing shutdown will affect all major energy commodities exported from Canada via international shipping ports on its coastlines as well as to the U.S. Depending on the length of the shutdown, impacts could be felt very quickly for the export of liquified petroleum gases (LPGs) in the form of butane and propane.
Propane is exported to Asian markets from Canada’s two west coast terminals in Prince Rupert, BC with these terminals relying on the direct transportation of propane by rail from sites in Alberta and British Columbia. Exports of propane from these two terminals averaged 94 Mb/d through the first seven months of 2024 based on data from RBN’s NGL Voyager report (chart below). The terminals have limited storage capacity on site and need to maintain a steady supply of railed propane in order to ensure the timely delivery of contractual cargoes to overseas customers. As such, marine exports of propane could cease within a couple of weeks if the shutdown is not resolved in short order.
