The decision by Canada’s labor minister to not intervene in contract talks between the country’s Class I railroads and unions has upped the risk of a work stoppage within the next week, and both railroads have stopped accepting containerized freight in response.
Labor Minister Steve MacKinnon declined a request by Canadian National Railway (CN) to invoke a labor law the railroad had argued would “secure industrial peace” in contract talks with Teamsters Canada Rail Conference (TCRC), his office said in a letter sent Thursday.
CN made the request in early August, asking MacKinnon to force both sides to accept an agreement negotiated through binding arbitration because the union “has not engaged meaningfully at the negotiating table.”
In the letter, MacKinnon’s office said it’s up CN to bargain with the union, but that Canada’s mediation services would be able to help.
“It is your shared responsibility — Canadian National Railway Company and the Teamsters Canada Rail Conference — to negotiate in good faith and work diligently towards a new collective agreement,” the ministry wrote.
In November 2022, US President Joe Biden intervened to prevent a nationwide strike by union rail workers and brokered a tentative deal that was eventually approved by rank-and-file.
Phasing shutdowns
In response to the letter, CN said Thursday it has begun a phased shutdown of its Canadian network, adding that if no deal is struck with TCRC, it will lock out employees on Aug. 22. CN continued to argue that binding arbitration is necessary because it has made four offers to TCRC since January without a counteroffer.
“A prolonged shutdown of rail operations will have a significant impact on supply chains: creating delays, possible shortages and increasing costs,” CN said in a statement. Earlier this week, the railroad informed shippers that it would not be accepting new loads of hazardous materials.
On Friday, CN will extend the embargo to include intermodal cargo from several origins and destinations. That includes dry containers going from or to the ports of New York and New Jersey and Philadelphia, containers it interchanges with CSX Transportation that originate in the Ohio Valley, interchange cargo with Norfolk Southern Railway to the US West and East Coasts, and its joint Canada-US-Mexico service with Union Pacific and Ferromex.
The potential lockout would come just 13 days after the Canadian Industrial Relations Board (CIRB) issued a decision that railroad services would not be considered essential to public safety and health.
Canadian Pacific Kansas City (CPKC) on Thursday likewise said it will lock employees out on Aug. 22 if a deal is not reached. CPKC also said it would stop accepting new shipments of hazardous materials, though it will allow non-hazardous intermodal containers to be brought to its terminals until those facilities are full.
The largest impact of a lockout would likely be seen at the Port of Vancouver, Canada’s busiest container port, Scott Shannon, vice president of CH Robinson, told the Journal of Commerce. He said Vancouver already has a backlog of roughly 13,000 intermodal containers from previous rail slowdowns due to a port strike and wildfires in 2023 that disrupted train service.
Ships coming into Vancouver should still be able to discharge, and shippers should be able to transload freight to trucks, Shannon noted. However, he warned that if containers are not retrieved from Vancouver’s terminals in a timely manner, the port will become congested quickly given the absence of regular train service.
“The rail ramps there have been almost continually congested since the summer of 2023,” Shannon said. “Vancouver just hasn’t been able to catch a break or catch up.”
The Port of Prince Rupert receives the vast majority of its cargoes via CN.
Source:
Angell, M. (2024, August 15). Ottawa rejects call to head off Canada rail work stoppage. Journal of Commerce. https://www.joc.com/article/ottawa-rejects-call-head-canada-rail-work-stoppage_20240815.html