Canadian rail grinds to a halt

The Teamsters Canada Rail Conference (TCRC) represents around 9,300 locomotive engineers, conductors and other rail workers at the Canadian National (CN) and Canadian Pacific Kansas City (CPKC) railroads. After final attempts to reach an agreement late into the night on 21 August failed, the railroads locked out employees at 12.01am today and ceased operating their networks.

The impact across Canada will be felt immediately. Combined the railroads move over C$1 billion worth of freight each day, including products like aviation fuel and feedstocks for plastics manufacturing that rely on regular scheduled rail services. Furthermore, many commuter rail services into Toronto, Montreal and Vancouver have been suspended as they operate on or cross CN and CPKC tracks and cannot operate without their controllers.

In a statement CPKC said last minute negotiations had not made any significant progress. “CPKC has bargained in good faith, but despite our best efforts, it is clear that a negotiated outcome with the TCRC is not within reach. The TCRC leadership continues to make unrealistic demands that would fundamentally impair the railway’s ability to serve our customers with a reliable and cost-competitive transportation service.”

Industry organisations across Canada are calling for the Federal Government to intervene in the form of back-to-work legislation or a regulatory directive to force binding arbitration. CPKC said binding arbitration is the “responsible path” at this point, and has repeated its standing offer to the TCRC to go to take this route is still on the table. It notes, however, that TCRC is the most difficult of the unions the railroad negotiates with and federal intervention has been required in nine of 10 rounds of collective bargaining since 1993.

Canadian ports on the east and west coasts are now bracing for the impact of the strike. The Vancouver Fraser Port Authority said two thirds of all cargo through the port arrives of leaves by rail, and the strike will cause vessel congestion. It is asking ships sailing to Vancouver to “adjust their arrival times in port by slowing down” and is giving anchorage priority to ships calling at terminals that are not fully, or are only partially, impacted by the rail disruption.

Carriers are now reviewing container services that call at Vancouver and other ports. At this point Hapag-Lloyd is still planning for its PN4 service to call Vancouver on 28 August, but other calls from its PN2, PN3 and PN4 services are “currently under review”.

Some Canadian media are reporting that container shipments will be diverted from Vancouver or Prince Rupert to Seattle and Tacoma, but rerouting containers and coordinating onward logistics is not a simple option. ONE advises that such requests “will be difficult to execute, and may incur substantial additional costs. Many requests will not be operationally feasible. ONE will attempt to entertain these requests within our very limited capabilities, but cannot guarantee approvals,” the carrier said.

On the east coast, ZIM calls at Halifax with its ZCA service, followed by New York, Norfolk then Savannah in the US. ZIM is offering shippers the opportunity to request a change of destination, which it will arrange for free with 24 hours notice.