CN Rail faces grain export backlog of 10,000 carloads: CEO

By Allison Lampert

MONTREAL (Reuters) - Canadian National Railway Co <CNR.TO> lost capacity equivalent to 10,000 carloads, or 1 million tonnes of grain exports, in February due to rail blockades by protesters opposed to a pipeline project, Chief Executive Jean-Jacques Ruest said on Tuesday.

Activists disrupted passenger and freight traffic last month to show solidarity with the Wet'suwet'en people, who are seeking to stop TC Energy Corp's <TRP.TO> Coastal GasLink pipeline from being built across their land.

"In the case of CN we lost the equivalent of 10,000 carloads, or roughly 1 million tonnes," Ruest said in an interview. "Of all the supply chains the one that will take the longest (to recover) is the grain export."

The lost capacity represents roughly 1% of Canada's total harvest during the 2019-20 marketing year, which runs from Aug. 1, 2019, through July 31, 2020.

Canada relies on CN, the country's largest railroad, and smaller rival Canadian Pacific Railway <CP.TO> to move crops, oil, potash, coal and manufactured goods to ports and the United States.

The blockades, which shut some lines for weeks, hit “every commodity," creating backlogs of products sitting on CN railcars, along with product that "has yet to enter our network," he said.

Ruest said CN did not move as much crude by rail as expected in February because of the blockades. He said he believes crude shipments will remain a driver of growth this year for CN, although weaker prices could impact output.

Global crude price benchmarks have tumbled this year by more than one-fifth, due to fears that the coronavirus outbreak could sap global demand.

Earlier on Tuesday, CN said over 1,400 trains, including passenger trains, were delayed or canceled because of the blockades, causing shutdowns of parts of the company's network as freight is parked across the network, ready to be moved.

CN also confirmed a Reuters report from Friday that the company was calling back many of the 450 employees based in Eastern Canada who had been temporarily laid off because of the blockades.

Ruest said he hopes protesters will not target rail amid tensions over other pipeline projects. Along with Coastal GasLink, twinning is under way with the Canadian government-owned Trans Mountain oil pipeline from Alberta to the Pacific coast near Vancouver, which also faces fierce opposition from environmental and some indigenous groups.

"It is a very costly way to resolve issues," Ruest said. "I surely hope this is not the way of the future.”

(Reporting by Allison Lampert in Montreal; Additional reporting by Rod Nickel in Winnipeg, Kelsey Johnson and Steve Scherer in Ottawa; Editing by Chris Reese and Leslie Adler)