Both sides of the Canadian railroad labor negotiations have escalated the chances of a countrywide halting of rail traffic Thursday.
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Canadian National Railway (CN) formally notified the Teamsters Canada Rail Conference Sunday night that the union will be locked out immediately after midnight Thursday if a new labor agreement is not reached.
Canadian Pacific Kansas City (CPKC) had previously said it intended to serve a lockout notice for the Aug. 22 deadline, with the Teamsters confirming in a press release that the notice was served. The union fired back Sunday with a strike notice against CPKC.
The back-and-forth over the weekend came after Canada’s Labour Minister, Steven MacKinnon, said Thursday the government wouldn’t impose binding arbitration within the talks. Both railroads had requested for an independent arbitrator to determine the terms of a settlement, with CN formally calling on the government to deploy one. The Teamsters had already denied the request from both CN and CPKC.
MacKinnon followed up the decision with a statement on X Monday indicating that the collective bargaining negotiations “belong to CN Rail, CPKC and TCRC alone,” but asserted that the impacts would be felt by all Canadians.
“The parties must do the hard work necessary to reach agreements at the bargaining table and prevent a full work stoppage,” said McKinnon. “Canadians expect the parties’ effort to be equal to the trust conferred on them.”
Canada’s decision runs counter to the U.S. nearly two years ago, where government intervention ultimately prevented a national rail strike from occurring.
With more than 9,000 conductors, locomotive engineers, yard workers and rail traffic controllers potentially walking off the job, both railroads have implemented more embargoes provide a safer and more orderly shutdown of their rail networks .
CN and CPKC first put a halt to movement of hazardous goods throughout the country, before the former said it would stop all intermodal traffic into the country. CPKC then said it would stop any new rail shipments originating in Canada, and all new U.S. shipments destined for Canada starting on Tuesday.
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What is still up in the air is whether the government would consider intervention in the event a strike occurs, especially given the time it can take to return the rail system to normalcy after a final negotiation.
“This strikes me from an operational standpoint, given the sort of week-in-advance slowdown that’s underway, even if a strike was resolved, it will probably take a while to get the railroads back up and running,” said Allan Rutter, freight analysis program manager at Texas A&M Transportation Institute. “Part of it is just where crews are, how to get them back and what shipments have been waiting in yards that need to be moved out so that other cargo can be moved in.”
Rutter told Sourcing Journal that the quickness by which the rail negotiations appeared to go south after their resumption earlier this month has made planning for logistics alternatives more difficult than another potential looming work stoppage at the U.S. East Coast and Gulf Coast ports.
“Your ability to anticipate this has been truncated. If you were worried about moving containers in and out of Savannah, Charleston, Port Elizabeth, New York and Houston, you might start making arrangements to move goods to the West Coast instead of the East Coast. Given how quickly this comes out, it may be hard for container importers that use Prince Rupert a lot to avoid congestion in Southern California, they may be a little harder pressed to try to find alternatives.”
C.H. Robinson is one logistics giant making shifting some cargo away from Canadian ports, with the company telling Reuters that roughly 80 percent of customers who diverted cargo will be dropping off goods at the Ports of Los Angeles and Long Beach, while the remainder will go through Seattle and Tacoma.
According to the ITS Logistics monthly U.S. Port/Rail Ramp Freight Index, the inland rail stemming from the U.S. West Coast ports will be significantly impacted given their current overflow during the East Coast port nego t iations . All operations at the Ports of Vancouver, Prince Rupert and Montreal are listed as “severe,” with the company saying shippers should avoid Canada as an entry point for interior point intermodal (IPI) U.S. freight in the near term.
“Strike activity, or the potential of it, will affect the West Coast and inland rail legs of ocean container traffic entering Canada. Due to last week’s CIRB ruling, rail is not an essential service in Canada because reasonable alternatives exist in long haul trucking, and a strike or disruption in Canada seems more likely,” the report read. “This increased likelihood is driving our decision to move the West Coast ocean region to SEVERE concern and inland rail ramps to ELEVATED concern.”
CN Preps for Possible Strike by Pausing Intermodal Cargo into Canada
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