- Rail lockout halts freight across Canada
- Major supply chains face disruption
- Impact threatens US-Canada trade
Critical supply chains are in peril across North America after a rail labour dispute in Canada resulted in the suspension of freight movement on the country’s two main railways.
Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) locked out roughly 9,300 workers after midnight on Thursday (04:00 GMT) after failing to reach a late-night agreement with the Teamsters union.
Canada exports almost 75% of its goods to the United States, the majority of which are transported by rail. A prolonged conflict could impede supplies of a variety of items, including grains and beans, potash, coal, and lumber.
The lockout will also disrupt commutes for tens of thousands of passengers in Toronto, Montreal, and Vancouver, where trains run on CPKC-owned rails.
Canada, the world’s second-largest country by land, is primarily reliant on rail transportation.
After months of talks, the increasingly heated negotiations came to a standstill late Wednesday evening, according to CBC, with both sides blaming the other for failing to bargain properly.
In separate announcements, CN and CPKC stated that they took the actions following months of “good faith” negotiations that had deadlocked over working conditions such as shift scheduling and tiredness policies.
“Without an agreement or binding arbitration, CN had no choice but to finalise a safe and orderly shutdown and proceed with a lockout,” the railway company said in a statement.
CPKC is acting to protect Canada’s supply chains, and all stakeholders, from further uncertainty and widespread disruption,” the organisation stated, adding that binding arbitration was the only “responsible” route forward.
François Laporte, National President of Teamsters Canada, stated that he wants to resume negotiations “as soon as possible”.
Mr. Laporte stated that safety was the sticking issue for his union.
He claimed that railroads across Canada transport goods, electricity, and chemicals. And we want to ensure that those trains are operated by individuals who receive adequate rest, are safe, and are not weary.
Mr Laporte reiterated a previous statement by the Teamsters Canada Rail Conference, which accused the railways of just thinking about the “bottom line.”
Earlier on Wednesday, Prime Minister Justin Trudeau issued a last-minute appeal to both sides to continue their efforts to reach an agreement.
Dozens of business and trade associations warned in an open letter last week that the interruption would have “an immediate impact” from coast to coast and harm Canada’s reputation as a trading partner.
The extent of the disruption is overwhelming, especially since millions of Canadian jobs are at stake, according to the report.
The US and Canadian chambers of commerce responded earlier this week, warning of the potential “devastating” impact of the shutdown on Canadian businesses and people, as well as the US economy.
A coalition of agricultural trade associations has urged Ottawa to intervene, but the government has so far rejected proposals for formal arbitration.
The labour agreements for both railways expired at the end of last year.
During the lockout, rail networks in the United States and Mexico will continue to function. However, a slowdown north of the border might be felt throughout North America.
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US Transportation Secretary Pete Buttigieg stated earlier this week that he was monitoring rail negotiations and their possible impact on cross-border trade.
According to the Railway Association of Canada, rail transports around C$380 billion (£214 billion) in commodities each year, with railways transporting half of the country’s exports.
Before the entire closure, both CPKC and CN had begun to pause some shipments.
Maersk stopped accepting shipments headed for Canada that were supposed to travel by train but couldn’t be moved on big trucks.
According to Professor Barry Prentice, head of the University of Manitoba Transport Institute, if the sides are unable to reach an agreement, the government would most likely approve back-to-work legislation in the following days, as it has in previous disputes.
This is not the ideal approach to manage the show, he explained.
But it seems to be the playbook, and we’re back on the merry-go-round.
