Massive looming Canadian rail shutdown could have economic ripple effects throughout America
https:/Avww.cnn.com/2024/08/19/business/canada-rail-strike?cid=ios_app
Canada’s freight rail network could come to a grinding halt this week, inflicting a huge economic toll after the country’s two largest railroad operators on Sunday issued lockout notices to the Teamsters union that represents nearly 10,000 workers.
Failing last-minute deals, both Canadian National Railway and Canadian Pacific Kansas City plan to lock out workers from the early hours of Thursday.
Tt marks the first time that the country has faced a simultaneous labor stoppage at the railroad firms as they normally negotiate their labor agreements in alternate years.
The stoppages could cripple the shipment of food grains, beans, potash, coal and timber which form a large part of Canada’s exports, while also impacting shipments ranging from petroleum products to chemicals and cars.
In addition to billions of dollars of economic damage, the stoppages could disrupt rail trade across the North American continent.
“Unless there is an immediate and definite resolution to the labor conflict, CN will have no choice but to continue the phased and progressive shutdown of its network which would culminate in a lockout,” CN said in a statement.
“Despite negotiations over the weekend, no meaningful progress has occurred, and the parties remain very far apart,” it said.
The Teamsters union argues 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.
The dispute with CPKC centers on safety issues with the union arguing the firm 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, which represents yard workers, rail traffic controllers, locomotive engineers and conductors, earlier on Sunday issued a 72-hour strike notice to CPKC ahead of the company’s lockout notice.
It also said in a separate statement to members that the lockout notice issued by CN should be treated “as if we were on strike.”
“We’re serving strike notice to defend the rights and safety of our members,” Paul Boucher, president of the Teamsters Canada Rail Conference said in the statement.
Both CN and CPKC have said their networks outside of Canada will continue to operate but the stoppages could have ripple effects. The two Canadian rail operators” networks connect with several key U.S. rail and shipping hubs such as Chicago, New Orleans, Minneapolis and Memphis. CPKC”s network also extends further south connecting with ports on both the east and west coasts of Mexico.
The federal Liberal government has so far dismissed pleas from business groups to intervene, saying it wants the companies and the unions to sort out their differences via negotiations
‘Rail is our lifeline’: Businesses brace for possible CN/CPKC shutdown amid lockout-strike threats.
https://vww.cbc.ca/amp/1. 7298414
To business executive Daniel Peretz, the possibility of a railway strike or lockout is more than a headline.
“The rail service is our lifeline,” he said. “Without the rail service, we don’t operate the business, we don’t have 13 employees working here, we’re unable to service a very important industry.”
Peretz is president and CEO of NexGen Polymers, a plastics material transloading facility operating out of a rail-served warehouse and office space just east of downtown London, Ont.
Outside the building’s brick walls, there’s a series of railway sidings that together hold about 40 railcars. Each graffiti-covered rail car holds plastic pellets delivered to the site by petroleum companies from across North America and overseas.
Twice a week, a Canadian Pacific Kansas City (CPKC) crew comes to pull away about 10 empties from NexGen and replace them with loaded railcars.
The plastic pellets — each about the size of an unpopped popcorn kernel — come delivered to Peretz’s site in various colours and grades.
The pellets are vacuumed out of the railcars and into storage tanks for testing, mixing and eventual delivery by truck for customers. The manufacturers Peretz sells to turn the pellets into products and packaging that Canadians see on almost every store shelf.
“Plastic water bottles, the overwrap for toilet paper — really every aspect of every component of what we purchase today is made from plastic, from industrial products, to food, to industrial to medical,” he said.
Dispute creates chain reaction
A labour dispute at both Canadian National and CPKC threatens to derail not only Peretz’s business, but the scores of manufacturers he supplies in a complex, just-in-time supply chain. The Canadian Federation of Independent Business has said the lockout could be devastating for small businesses that depend on rail service.
Railways carry more than $1 billion worth of goods each day, according to the Railway Association of Canada, and over half of the country’s exports travel by rail.
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, CN requested a year-long extension to its existing deal rather than negotiate a new one.
This meant both companies’ labour agreements expired at the end 0£ 2023 and talks have been ongoing since.
The companies and the union have accused each other of bad faith bargaining. The teamsters say CN Rail and CPKC are seeking concessions that could endanger worker safety, but both the operators deny that.
On Monday, the union representing thousands of workers at CPKC served a 72-hour strike notice to the railway. CN Rail issued a notice that it intends to lock out workers at that same time unless an agreement or binding arbitration is reached.
As the dispute lurches on, both companies have already started to scale back shipments in preparation for a possible strike or lockout. It’s a high-stakes standoff that could disrupt the two largest links in a crucial, cross- country supply chain impacting multiple industries and businesses.
Peretz has asked CPKC for specifics about if and when his deliveries might be affected, but said he hasn’t been able to get clear answers.
He said any prolonged disruption in rail service would cause widespread challenges in the supply chain. “Our customers would feel it based on the price per pound that they pay for the material,” he said.
In the volumes his business requires, Peretz has no other way to get plastic pellets to his warehouse. It’s a gap, he said, that can’t be filled by trucks.
“A rail car is 200,000 pounds net weight of material … ‘d have to do four trucks to get that same volume,” he said. “You’re adding tremendous cost, tremendous CO2 emissions.”
Peretz isn’t the only business owner who hopes the railways and unions can reach a deal in time to keep the trains rolling.
Crosby Devitt, a grain farmer and CEO of Grain Farmers of Ontario in Kincardine, Ont., said about $43 million worth of grain is shipped in Canada by rail every day.
“Even in our industry, we sometimes underestimate the importance of rail,” he said. “Whenever there’s a threat of a disruption, it’s brought to the forefront.”
Plea to ‘not let this get out of hand’
The timing of the potential shutdown is a problem for him because grain and other crops have to be harvested at a specific time.
If shipping isn’t possible, they could run out of storage capacity very quickly.
On Thursday, federal Labour Minister Steven MacKinnon rejected a request from CN to impose binding arbitration, saying he wants the company to bargain in good faith.
Devitt said the federal government shouldn’t hesitate to step in if the railways and unions can’t reach a deal.
“We know the parties on both sides are engaged to find a solution, but we implore the federal government to not let this get out of hand because no one wins when we have a disruption to the economy on this type of scale.”
Key Market Updates on Canada Rail Strikes, US Dockworkers’ Strike and Temporary
Closure of Ningbo Port Due to Container Explosion
Canada Rail Strike
https://globalnews.ca/news/10691169/rail-strike-canada-labour-board-ruling/
Rail strike may begin this month after labor board says work non-essential
As the negotiating clock ticks down, the country’s two main railways are set for a nationwide strike or lockout in less than two weeks after a ruling that their work does not amount to an essential service
Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. warned Friday that lockouts on Aug. 22 are imminent unless new contracts with their employees can be secured.
The warnings came hours after the Canada Industrial Relations Board ruled that a work stoppage would pose no “serious danger” to public health or safety, opening the gate to a full-fledged strike or lockout. If either occurs, employees at CN or CPKC would not be compelled to continue hauling goods, including key commodities such as chlorine for water and propane for care centres.
Some 9,300 conductors, engineers and yard workers at CN and CPKC have been bargaining on and off over a pair of new collective agreements for months.
The labour tribunal ordered a 13-day cooling-off period as part of the dual decisions Friday. If new deals cannot be reached in that window, countrywide lockouts or strikes by employees represented by the Teamsters Canada Rail Conference (TCRC) could kick off as early as Aug. 22.
Late Friday afternoon, Canadian Pacific said it will lock out 3,300 employees one minute after midnight on Aug. 22 unless a deal is secured.
“If no resolution is reached during bargaining through the extended cooling-off period, and the TCRC continues to refuse binding interest arbitration,
CPKC will have no choice but to take this action,” the company said in a release, citing supply chain stability. CN called on the federal government to impose binding arbitration, saying it has “lost faith” in the negotiating process.
A phased shutdown of its network would also culminate in an Aug. 22 lockout of 6,000 workers, it said. The union said its focus remains good-faith bargaining. “Whether or not this is possible is entirely up to CN and CPKC,” said spokesman Christopher Monette. Shippers and producers say the potential stoppage at CN or CPKC or both simultaneously would halt freight traffic, clog ports and disrupt industries.
In May, then-labour minister Seamus O’Regan asked the industrial relations board to review whether a work stoppage would jeopardize Canadians’ health and safety after union members voted overwhelmingly to approve a strike mandate. Friday’s ruling effectively “places the parties back in the position they were in” before the ministerial referral, the board wrote.
“There is no doubt that a work stoppage at CN would result in inconvenience, economic hardship and, possibly, as some groups and organizations have suggested, harm to Canada’s global reputation as a reliable trading partner,” the tribunal said in a unanimous decision.
However, the question of what constitutes an essential service under the Canada Labour Code is “very narrow,”
it continued.
“The board is satisfied that, at this time, a strike or lockout at CN would not pose an immediate and serious danger to the safety or health of the public. The tribunal came to the same conclusion in a separate ruling concerning Canadian Pacific. Sticking points at the bargaining table boil down to crew scheduling, fatigue management and safety, the Teamsters said. The union has rejected binding arbitration with both companies. Each side says the other has made excessive demands that led to a weeks-long bargaining impasse.
Canadian railways haul about $380 billion worth of goods and more than half of the country’s total exports each year, according to the Railway Association of Canada.
Anxiety over a strike by thousands of employees has already cost the two railways some business after some customers started to reroute cargo following the union’s strike mandate authorization on May 1. Federal Labour Minister Steven MacKinnon, who replaced O’Regan after the latter resigned from cabinet three weeks ago, said the two sides need to hash out a deal themselves rather than rely on government intervention, such as back-to- work legislation.
“I call upon the parties to stay at the bargaining table and continue holding productive and substantive
discussions that meet the needs of this moment. A negotiated agreement is the best way forward,” he said in a statement Friday.
The stance differed from that adopted by industry the players most frustrated by Friday’s ruling in a message to the prime minister.
“We are writing to urge you to immediately intervene and do everything necessary to avert a disruption,” stated the joint letter from 70-plus industry groups and 40 chambers of commerce.
The organizations warned that a prolonged stoppage would strangle the goods pipeline, drive up prices and aggravate affordability problems for businesses and individuals, on top of the risk of furloughs at companies
forced to suspend operations. Commuters could feel the effects of a work stoppage as well. Should one occur
involving the 80 CPKC rail traffic controllers negotiating for a contract – distinct from CPKC’s main bargaining group passenger trains that run on Canadian Pacific-owned tracks in Vancouver, Toronto and Montreal could shut down.
Factories would also face back-ups right away, said Dennis Darby, CEO of Canadian Manufacturers & Exporters.
“You pay penalties because you’ve delayed delivery,” he said in an interview. “Canadians don’t realize how integrated our manufacturing sector is and how small the inventories are. That’s why stuff is moving all the time.”
Bob Masterson, CEO of Chemistry Industry Association of Canada, called the tribunal decision “disappointing.” “There’s no plan B,” said Masterson, whose organization represents producers of plasties and chemicals.
About 80 percent of the sector’s $100 billion in annual shipments relies on rail transport, much of it going to U.S. automakers but plenty bound for Canadian municipalities that need chlorine to disinfect drinking water, he said. “The government has asked us, What about trucks?” No. 1, what trucks? We already have a driver shortage,” he said in an interview.
One railcar amounts to three big rigs worth of commodities, he said. “And every day we move 530 railcars. So somehow, at short notice, we’re going to find 1,500 to 2,000 more trucks to carry our product, as well as everybody else trying to? That’s just not possible at all.”
ILA Dockworkers’ Update from their Leaders to their Membership
Attention ILA Members,
I want to address the recent communication from USMX and make it clear do not be fooled by this letter. We are indeed continuing to bargain in good faith to settle all local contracts, but the reality on the ground is far different from the picture they are trying to paint.
Employers like APM Mobile have been dragging their feet on resolving critical issues. One such issue is their use of Autogate in TIR Lanes, which we consider a clear violation of our Master Agreement. This isn’t just happening in one location, many other ports are facing similar challenges in getting local management to agree on terms and conditions for local supplemental agreements,
On top of that, when it comes to the Master Contract negotiations, let me be frank-we are very far apart, particularly on the economic issues. In fact, we are at an impasse. The propaganda coming from USMX is just that propaganda, likely the work of a PR firm trying to spin the situation in their favor
Remember, unless you hear it directly from us, it’s not the truth. Stay strong,
stay united, and know that we are fighting every day for the fair contract that
you deserve.
In Solidarity,
Harold and Dennis Daggett
Over 1 billion tons of cargo pass through the port each year, worth upward of $1 trillion, according to annual estimates. The port also serves the Yangtze River Delta including China’s major eastern hub of Shanghai.
The YM Mobility is 1,000 feet long and 130 feet wide, with a capacity of 81,000 deadweight tons. Shipping records suggest it carries goods between China and the Middle East. GPS data captured by the Marine Traffic website showed a number of rescue tugs positioned near the damaged container ship in the hours after the explosion.
The YM Mobility berthed in Shanghai on Wednesday before arriving in Ningbo on August 8, according to ship- tracking records. It was due to make two more port calls along China’s east coast before departing for the South China Sea and the Indian Ocean.
China’s Maritime Safety Administration did not immediately respond to a written request for comment.
YM Mobility Vessel Rotation
