Possible Work Stoppage At Canada’s Two Largest Railroads Could Disrupt US Supply Chain Next Week

DETROIT — Canada’s two main railroads are beginning to shut down their transport networks as a labor dispute with the Teamsters union threatens to result in lockouts or strikes, disrupting cross-border trade with the United States.

The Canadian Pacific Kansas City and Canadian National railroads, which transport millions of tonnes of freight across the border, have ceased accepting certain hazardous goods and chilled items.

Both have threatened to lock out Teamsters Canada workers beginning Thursday if a solution is not struck.

Possible Work Stoppage At Canada’s Two Largest Railroads Could Disrupt US Supply Chain Next Week

The railway announced on Saturday that CPKC will suspend all shipments beginning in Canada and any goods originating in the United States and bound for Canada on Tuesday.

According to the Canadian Press, Canadian National banned container imports from its partner railroads in the United States on Friday.

Jeff Windau, an industrials analyst at Edward Jones & Co., said his firm expects work stoppages to last only a few days, but if they go longer, there may be considerable supply chain disruption.

“If something would carry on more of a longer term in nature, then I think there are some significant potential issues just given the amount of goods that are handled each day,” according to Windau. “By and large the rails touch pretty much all of the economy.”

According to Windau, the two railroads move over 40,000 carloads of freight per day, valued at $1 billion. He warned that shipping fully built autos and auto parts, chemicals, forestry products, and agricultural items will be severely impacted, particularly with harvest season approaching.

Both railroads have substantial networks in the United States, while CPKC also serves Mexico. Those operations will continue even if there is a work stoppage.

CPKC is dedicated to avoiding a work stoppage, which would harm Canada’s economy and worldwide reputation. “However, we must take responsible and prudent steps to prepare for a potential rail service interruption next week,” spokesman Patrick Waldron said in a statement.

CPKC stated that shutting down the network would allow the railway to remove harmful products from its network before any standstill.

Union spokesman Christopher Monette said in an email Saturday that conversations are ongoing, but the situation has evolved from a potential strike to a “near certain lockout” by the railroads.

The CPKC said bargaining with the union, representing almost 10,000 workers at both railroads, will continue on Sunday. The corporation stated that it continues to bargain in good faith.

Canadian National said in a statement Friday that there had been no substantive progress in negotiations and that it hoped the union “will engage meaningfully” during a meeting on Saturday.

“CN wants a resolution that allows the company to get back to what it does best as a team, moving customers’ goods and the economy,” the railroad’s spokesperson said.

Contracts expire at the end of 2023, and negotiations began in November last year. They were expanded while discussions continued.

Possible Work Stoppage At Canada’s Two Largest Railroads Could Disrupt US Supply Chain Next Week

According to the union, the company’s demands for staff scheduling, rail safety, and worker tiredness are the primary sticking points.

Concerns about the quality of life for rail workers dealing with demanding schedules and no paid sick time nearly sparked a rail strike in the United States two years ago, but Congress intervened and prevented the walkout. Since then, the major railroads in the United States have made headway by extending paid sick time to most rail workers and attempting to improve timetables.

Windau stated that the trucking business now has a lot of excess capacity and may make up some of the railroads’ shipping volumes, but “you’re not going to be able to replace all of that with trucking.”

SOURCE | AP