FILE - Canadian Pacific trains sit at the main CP Rail train yard in Toronto, March 21, 2022. (Nathan Denette/The Canadian Press via AP, File)
BY TOM KRISHER
August 17, 2024
DETROIT (AP) — Canada’s two largest railroads are starting to shut down their shipping networks as a labor dispute with the Teamsters union threatens to cause lockouts or strikes that would disrupt cross-border trade with the U.S.
Both the Canadian Pacific Kansas City and Canadian National railroads, which haul millions of tons of freight across the border, have stopped taking certain shipments of hazardous materials and refrigerated products.
Both are threatening to lock out Teamsters Canada workers starting Thursday if deals are not reached.
On Tuesday, CPKC will stop all shipments that start in Canada and all shipments originating in the U.S. that are headed for Canada, the railroad said Saturday.
The Canadian Press reported that on Friday, Canadian National barred container imports from U.S. partner railroads.
Jeff Windau, industrials analyst for Edward Jones & Co., said his firm expects work stoppages to last only a few days, but if they go longer, there could be significant supply chain disruptions.
“If something would carry on more of a longer term in nature, then I think there are some significant potential issues just given the amount of goods that are handled each day,” Windau said. “By and large the rails touch pretty much all of the economy.”
The two railroads handle about 40,000 carloads of freight each day, worth about $1 billion, Windau said. Shipments of fully built automobiles and auto parts, chemicals, forestry products and agricultural goods would be hit hard, he said, especially with harvest season looming.
Both railroads have extensive networks in the U.S., and CPKC also serves Mexico. Those operations will keep running even if there is a work stoppage.
CPKC said it remains committed to avoiding a work stoppage that would damage Canada’s economy and international reputation. “However we must take responsible and prudent steps to prepare for a potential rail service interruption next week,” spokesman Patrick Waldron said in a statement.
Shutting down the network will allow the railroad to get dangerous goods off of its network before any stoppage, CPKC said.
Union spokesman Christopher Monette said in an email Saturday that negotiations continue, but the situation has shifted from a possible strike to “near certain lockout” by the railroads.
CPKC said bargaining is scheduled to continue on Sunday with the union, which represents nearly 10,000 workers at both railroads. The company said it continues to bargain in good faith.
Canadian National said in a statement Friday that there had been no meaningful progress in negotiations and it hoped the union “will engage meaningfully” during a meeting scheduled for Saturday.
“CN wants a resolution that allows the company to get back to what it does best as a team, moving customers’ goods and the economy,” the railroad said.
Negotiations have been going on since last November, and contracts expired at the end of 2023. They were extended as talks continued.
The union said company demands on crew scheduling, rail safety and worker fatigue are the main sticking points.
Concerns about the quality of life for rail workers dealing with demanding schedules and no paid sick time nearly led to a U.S. rail strike two years ago before Congress intervened and blocked a walkout. The major U.S. railroads have made progress since then in offering paid sick time to most rail workers and trying to improve schedules.
Windau said the trucking industry currently has a lot of excess capacity and might be able to make up some of the railroads’ shipping volumes, but, “You’re not going to be able to replace all of that with trucking.”
Why Canada is facing an unprecedented rail labor stoppage
August 18, 2024
August 18, 2024
By Reuters
A Canadian Pacific Railway (CP Rail) locomotive backs into position at the company's Toronto Yard in Scarborough, Ontario, Canada, March 20, 2022.
Ottawa —
For the first time, Canada's two main railway companies— Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) — are on the verge of a simultaneous labor stoppage that could inflict billions of dollars' worth of economic damage.
Why are both companies poised to stop?
Contract talks between the Teamsters union and the companies usually take place a year apart, but in 2022, after the federal government introduced new rules on fatigue, CN requested a year-long extension to its existing deal rather than negotiate a new one.
This meant both companies' labor agreements expired at the end of 2023 and talks have been ongoing since. As a result, for the first time, the failure of negotiations would halt most of the Canadian freight rail system.
The Teamsters represent around 10,000 members who work as locomotive engineers, conductors, train and yard workers and rail traffic controllers at the two companies in Canada.
What is likely to happen next?
The companies say they will start locking out workers in the early hours of Thursday if they cannot reach a deal, while the union says it is ready to call a strike for that day. CPKC has already given formal notice of a lockout.
CPKC, created in 2023 through a merger of Canadian Pacific and Kansas City Southern, has a U.S. and Mexican network which it says will operate normally. CN also says trains on its U.S. network will run.
That said, a strike will still lead to shipment disruptions south of the border. Both rail operators and some of their U.S. competitors have begun to refuse certain cross-border cargoes that would rely on the CN and CPKC networks.
CPKC has said it would halt new rail shipments originating in Canada, and new U.S. shipments destined for Canada starting Aug. 20, if talks with the Teamsters union in Canada fail to progress.
The railways move grain, autos, coal and potash, among other shipments.
What are the sides arguing about?
The union says CPKC wants "to gut the collective agreement of all safety-critical fatigue provisions," meaning crews will be forced to stay awake longer, boosting the risk of accidents.
CPKC says its offer maintains the status quo for all work rules, "fully complies with new regulatory requirements for rest and does not in any way compromise safety."
The Teamsters say CN wants to implement a forced relocation provision, which would see workers ordered to move across Canada for months at a time to fill labor shortages.
CN says it has made four offers this year on wages, rest, and labor availability while remaining fully compliant with government-mandated rules overseeing duty and rest periods.
What can the federal government do?
Under article 107 of the federal labor code, Labor Minister Steven MacKinnon has broad powers and can order the sides to enter binding arbitration. In 2023, his predecessor, Seamus O'Regan, issued such an order to end a dockworkers strike in British Columbia. In that case, unlike the current rail dispute, the sides had largely agreed on the outlines of a deal.
MacKinnon rejected a request last week by CN for binding arbitration, urging the sides instead to put in more effort at the negotiating table.
What happens if the union strikes?
If the Teamsters call a strike, the government can introduce back-to-work legislation forcing them to resume work. The previous federal Conservative government did that in 2012 to end a walkout by Canadian Pacific workers.
The current Liberal government though, has shown little interest in such a move in past disputes, preferring the sides to focus on negotiations. A complicating factor is that Prime Minister Justin Trudeau's government is being kept in power by the left-leaning New Democrats, who have traditionally enjoyed strong union support.
Ottawa —
For the first time, Canada's two main railway companies— Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) — are on the verge of a simultaneous labor stoppage that could inflict billions of dollars' worth of economic damage.
Why are both companies poised to stop?
Contract talks between the Teamsters union and the companies usually take place a year apart, but in 2022, after the federal government introduced new rules on fatigue, CN requested a year-long extension to its existing deal rather than negotiate a new one.
This meant both companies' labor agreements expired at the end of 2023 and talks have been ongoing since. As a result, for the first time, the failure of negotiations would halt most of the Canadian freight rail system.
The Teamsters represent around 10,000 members who work as locomotive engineers, conductors, train and yard workers and rail traffic controllers at the two companies in Canada.
What is likely to happen next?
The companies say they will start locking out workers in the early hours of Thursday if they cannot reach a deal, while the union says it is ready to call a strike for that day. CPKC has already given formal notice of a lockout.
CPKC, created in 2023 through a merger of Canadian Pacific and Kansas City Southern, has a U.S. and Mexican network which it says will operate normally. CN also says trains on its U.S. network will run.
That said, a strike will still lead to shipment disruptions south of the border. Both rail operators and some of their U.S. competitors have begun to refuse certain cross-border cargoes that would rely on the CN and CPKC networks.
CPKC has said it would halt new rail shipments originating in Canada, and new U.S. shipments destined for Canada starting Aug. 20, if talks with the Teamsters union in Canada fail to progress.
The railways move grain, autos, coal and potash, among other shipments.
What are the sides arguing about?
The union says CPKC wants "to gut the collective agreement of all safety-critical fatigue provisions," meaning crews will be forced to stay awake longer, boosting the risk of accidents.
CPKC says its offer maintains the status quo for all work rules, "fully complies with new regulatory requirements for rest and does not in any way compromise safety."
The Teamsters say CN wants to implement a forced relocation provision, which would see workers ordered to move across Canada for months at a time to fill labor shortages.
CN says it has made four offers this year on wages, rest, and labor availability while remaining fully compliant with government-mandated rules overseeing duty and rest periods.
What can the federal government do?
Under article 107 of the federal labor code, Labor Minister Steven MacKinnon has broad powers and can order the sides to enter binding arbitration. In 2023, his predecessor, Seamus O'Regan, issued such an order to end a dockworkers strike in British Columbia. In that case, unlike the current rail dispute, the sides had largely agreed on the outlines of a deal.
MacKinnon rejected a request last week by CN for binding arbitration, urging the sides instead to put in more effort at the negotiating table.
What happens if the union strikes?
If the Teamsters call a strike, the government can introduce back-to-work legislation forcing them to resume work. The previous federal Conservative government did that in 2012 to end a walkout by Canadian Pacific workers.
The current Liberal government though, has shown little interest in such a move in past disputes, preferring the sides to focus on negotiations. A complicating factor is that Prime Minister Justin Trudeau's government is being kept in power by the left-leaning New Democrats, who have traditionally enjoyed strong union support.
No comments:
Post a Comment