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The existing contract between the Teamsters Canada Rail Conference (TCRC) and rail-operating employers, Canadian National (CN) and Canadian Pacific Kansas City (CPKC), expired at the end of last year. Following several unsuccessful labor negotiations, the organizations are at a standstill with potential rail stoppages expected. A 72-hour strike notice was issued, set to begin on Thursday, August 22nd, at 12:01 am ET.
CN has already begun a phased, progressive shutdown of its network in anticipation of the strike. CSX Transportation, a major US freight railroad, has embargoed cross-border shipments to and from CN and CPKC railroads, with more embargoes announced today. The embargoes impact all shipments originating in Canada or those originating in the United States and destined for Canada.
According to the Railway Association of Canada, more than 900,000 tonnes of goods are moved yearly through Canada’s freight railways, with automotive being a significant market. Many major OEMs have production facilities in Canada that sell in the US and Mexico, impacting the entire North American automotive supply chain.
Manufacturers, shippers, and logistics providers across the globe are working proactively to develop contingency plans that will meet the expected challenges if the TCRC and rail operators cannot avoid a labor strike. One key strategy will be to shift from rail to trucking. This shift could, however, lead to capacity issues in a market that is already seeing shortages in drivers.
Additionally, CN and CPKC support intermodal services to all Canadian container marine terminals. Lacking the necessary manual support at these terminals could result in port congestion, particularly at the Ports of Vancouver, Prince Rupert, Montreal, and Halifax. This will only add to existing congestion and disruptions created by a recent cargo ship explosion at Ningbo-Zhoushan port in China, multiple hurricanes and other extreme weather conditions, and ongoing issues with the Panama Canal.
If the organizations can reach a settlement or agree on arbitration, reports indicate that the embargoes will be lifted, and normal operations will resume. Our team is continuously monitoring this situation and its impact on other areas of the supply chain. If you have any concerns about your shipments or need assistance with expedited shipments, contact a TOC representative today.
Updated: August 26, 2024
Rail Workers in Canada Ordered Back to Work
The simultaneous lockout and rail strike initiated on Thursday, August 22nd, brought rail operations to a screeching halt, disrupting the supply throughout North America. It marked the first time in history that Canadian National (CN) and Canadian Pacific Kansas City (CPKC) experienced work stoppages at the same time.
The strike lasted 17 hours before the Canadian government directed the Teamsters Canada Rail Conference (TCRC) into binding arbitration with the rail operators. In addition, Canada’s labor minister, Steve MacKinnon, directed Canada’s labor board to “extend the term of the collective agreements until new agreements have been signed.”
TCRC challenged the government’s directive to mandate binding arbitration and issued another 72-hour strike notice on Friday to begin Monday while waiting for a ruling from the federal labor board. On Saturday, the Canada Industrial Relations Board (CIRB) ruled that the tribunal had no authority to decide whether or not the minister’s directive was valid. This ruling voided the second strike notice and ordered thousands of rail employees back to work.
The Teamsters union said it would lawfully comply, and freight trains began rolling again this morning. The labor board ruled that arbitrations would start later this week, on August 29th. Although the Teamsters are honoring the directives, Teamsters President Paul Boucher has indicated they plan to appeal the ruling in court and continue to fight for rest periods, shift length, and scheduling issues jeopardizing worker safety.
Mitigation measures were made in the weeks leading up to the potential strike, including a phased shutdown approach and embargoes implemented on specific intermodal shipments. Some shipping companies have also introduced a diversion fee per Bill of Lading for containers bound for Canadian ports with inland delivery in the U.S. Despite the work stoppage lasting less than a day, experts expect it will take weeks for the industry to recover fully.
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