ACC Statement Regarding Impact of Canadian Freight Rail Service Shutdown on Chemical Shipments

WASHINGTON (August 22, 2023) - The following statement regarding the shutdown of Canada's freight rail network due to a labor dispute can be attributed to Chris Jahn, President and CEO of the American Chemistry Council:

"The system-wide rail shut down in Canada will create supply shortages of vital products such as drinking water treatment chemicals, fuel, and agricultural products in the United States, and an extended disruption could lead to significant and widespread harm that will ripple across North America.

"The chemical supply chains of the U.S. and Canada are intertwined. Last year, U.S. firms sold more than $28 billion in chemicals to customers in Canada and we import about $25 billion in chemicals from Canadian partners annually."

"The rail disruption in Canada will greatly impact U.S. supply chains, including facilities in Texas, Louisiana, Pennsylvania and New York that rely on Canadian suppliers. Chemical shipments and rail cars are already stranded at production and customer facilities because of the shutdown. Unfortunately, using alternate suppliers and increased truck shipments are not viable alternatives for most shipments."

Background Facts & Statistics

• The chemical industry is one of the largest freight rail customers. Shipping 2.3 million carloads of chemicals and plastics in 2022 in the U.S., including shipments on U.S. affiliates of Canadian railways.
• Movement of chemicals between the two countries supports industries in both countries - more than 80 percent of basic and specialty chemicals are sold directly to the industrial sector to produce goods.
• Chemical trade between the U.S. and Canada in 2023:
  • U.S. exported $28.5 B of chemical exports to Canada (accounting for 17.4% of total US chemical exports.
  • Canada ranked #1 for U.S. exports ($28.5 billion); Mexico was a very close #2 ($28.4 billion) and China a more distant #3 ($14.3 billion).
  • Canada was #1 source of chemical imports followed by China and South Korea.
  • The U.S. imported $ 24.3 B of chemical imports from Canada (18.1% of total chemical imports)
• Examples of impacts on chemical supply chain:
  • Canada to U.S.: A majority of the chlorine (about 60%) used for chemicals to disinfect drinking water for the West Coast states comes from Canada.
  • U.S. to Canada: A large amount of the chemicals (phenol as one specific example) used in the wood products industry in Canada come from the U.S. A prolonged disruption could impact supplies of building materials in both countries.

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