Canada’s two main freight rail companies: Cargo transportation paralyzed
Canada’s two main freight rail companies have shut down their operations, paralyzing much of the freight transportation with the United States.
According to the management of the two companies, 9,000 members of the Teamsters union that operates the trains have been paralyzed, demanding a better collective bargaining agreement.
Nearly one-third of the freight handled by the two railroads, Canadian National (CN) and Canadian Pacific Kansas City Southern (CPKC), crosses the U.S.-Canadian border.
This shutdown could disrupt operations in several U.S. industries, including agriculture, automotive, homebuilding and energy, depending on how long the shutdown lasts.
“CPKC is acting to protect Canada’s supply chains and all stakeholders from further uncertainty and more widespread disruption that would be created if this dispute were to drag on further and result in a potential work stoppage during the peak fall shipping period,” the company said in a statement Thursday shortly after the lockout began at 12:01 a.m. ET.
One aspect to highlight is the closure of Canada’s two major freight rail companies would affect some U.S. auto plants as they could temporarily shut down if they are unable to manufacture engines, transmissions or stampings in Canadian plants.
While U.S. farmers could face fertilizer shortages and U.S. water treatment plants near the Canadian border could run out of the chlorine they use to purify water.
This is the first time that Canada’s two major freight rail companies have closed at the same time due to a labor dispute.
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Canada’s two main freight rail companies
The most recent work stoppage in the industry was a 60-hour strike at Canadian Pacific in 2022. Before that, there was a nine-day strike at Canadian National in 2019.
Thursday’s action is different from a strike, where union members refuse to show up for work. In this case, it’s management telling the nearly 9,000 Teamsters they can’t work.
CPKC spokesman Patrick Waldron said it was better to stop operations now and come to a conclusion, rather than have the union go on strike later this fall.
The Teamsters union says it has been seeking a contract that both sides can live with, but that the railroads’ demands would reduce the amount of rest and increase safety risks.
But the railroads deny that the changes they are seeking would increase safety risks, claiming that all proposals provide greater safety protections than required by recently strengthened Canadian regulations.
The companies claimed that the fault for the failure to reach an agreement by the deadline lies with the union and called on the government to intervene and submit the dispute to binding arbitration, something it has so far refused to do.
Canadian Labor Minister Steve MacKinnon met in recent days with union negotiators and management in an unsuccessful attempt to reach an agreement.
He has the power to submit the matter to binding arbitration, a solution sought by the railroads and opposed by the unions, but so far the Trudeau administration has rejected that option.
