Shippers on both sides of the cross-border supply chain are bracing for an unprecedented shutdown of Canada’s largest rail networks that could disrupt freight traffic, including peak season intermodal shipments and the critical fall grain harvest.
The contract dispute covers a combined 9,300 union employees ranging from train crews to dispatchers at Canadian National (CN) and Canadian Pacific Kansas City (CPKC), the country’s largest railroads. Employees represented by the Teamsters Canada Rail Conference (TCRC) are seeking higher pay and improved benefits, as well as provisions for more predictable work scheduling, similar to recent deals at U.S. railroads. Negotiations typically take place every other year; a one-year extension of the previous pact expired at the end of 2023.
The railroads said they would begin to lock out employees beginning Thursday at 12:01 a.m. The union countered with a warning of its intention to strike on the same deadline.
The latest developments:
Prime Minister Justin Trudeau on Wednesday called on the sides to reach an agreement. “My message is straightforward. It is in the best interest of both sides to continue doing the hard work at the table to find a negotiated resolution,” Trudeau said during brief remarks reported by the CBC.
Canadian business groups early Wednesday in a joint statement urged the government to intervene to keep trains moving. Trudeau has resisted such calls; the labor-aligned New Democratic Party, a key supporter of Trudeau’s liberal government, said it opposes any federal intervention in the negotiations.
Labor Minister Steve MacKinnon was scheduled to meet Wednesday in Calgary, Alberta, with representatives of CPKC and later with the TCRC to urge the sides to come to an agreement. MacKinnon had been scheduled to meet Tuesday in Montreal with CN. Federal mediators are guiding bargaining on a new contract.
CN issued an embargo of all freight effective at 12:01 a.m. Thursday. It previously restricted refrigerated cargo as of Aug. 15. Canada-U.S. intermodal embargoes took effect Aug. 16 covering ports in New York, New Jersey and Pennsylvania; interchange with CSX and Norfolk Southern; and Canada-bound shipments out of Indianapolis.
Sources told FreightWaves that CN so far had not disclosed any plans to U.S. workers on how it would handle the effects of a shutdown. Only train movements within yards, not intercity trains, would take place during a work stoppage. The company did not comment on its U.S. plans.
As of Tuesday, CPKC embargoed all shipments originating in Canada, all shipments originating in the United States destined for Canada and all carload traffic destined for Canadian interchange. The company is communicating directly with customers as additional embargoes and intermodal terminal restrictions for temperature-controlled containers and other intermodal containers are implemented, as necessary.
In an email to FreightWaves, a spokesman for CPKC said the carrier “remains focused on and committed to arriving at a negotiated outcome that is in the best interests of all our railroaders and their families. We are firmly committed to staying at the bargaining table to reach renewed agreements.”
CSX has embargoed all cross-border shipments to and from CN and CPKC. Shipments on those roads with U.S. originations and destinations are not included in the embargo. Restrictions on all hazmat and security-sensitive materials originating or terminating on the Canadian railroads remain in effect.
Norfolk Southern in a service alert said it is continuing to monitor the potential work stoppage. The embargoes by CN and CPKC cover all NS-originated traffic destined for Canada and all Canadian-originated traffic destined for NS destinations for all commodities.
On Monday CPKC President and CEO Keith Creel in a letter to employees said union leadership “grossly misrepresented the facts regarding our ongoing collective bargaining and the proposals made by CPKC during these negotiations.” Creel described as “patently false” suggestions by the TCRC that CPKC had “unilaterally changed or canceled the terms” or that its proposals “would compromise safety.” He added that the railroad remains committed to negotiating a new agreement.
Canada’s largest container gateway is taking measures to manage vessel arrivals and maintain port fluidity. Ships en route to the Port of Vancouver in British Columbia are being instructed to adjust their arrival times by slowing down to prevent further congestion. “We expect disruptions to the movement of containers, grain, potash, coal and other cargo transported to and from port terminals by rail,” a spokesman told FreightWaves.
British Columbia’s Prince Rupert Port Authority in a statement to FreightWaves urged CN and TCRC to continue negotiating in good faith toward an agreement. “The pending labor disruption threatens the 3,300 direct full-time jobs that comprise port-related operations throughout northern BC as well as the movement of goods.”
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