The CEO of Canadian Pacific Kansas City Ltd. (CPKC) railway said a strike by the Teamsters Canada Rail Conference (TCRC) now seems likely in the second half of August, according to multiple media reports.
TCRC represents nearly 10,000 conductors, locomotive engineers, and yard workers at Canadian National (CN) and CPKC, including 3,300 at CPKC alone. CPKC CEO Keith Creel told analysts on a July 30 conference call that the railroads and union remain “fair apart” on negotiations over a new collective agreement.
“I’m just being transparent and honest. It’s going to be a challenge,” Creel said. “We’re going to remain cautiously optimistic. But we’re not going to do a bad deal, either.”
The railroads and TCRC are still awaiting a decision by the Canadian Industrial Relations Board (CIRB), which is considering whether a strike would compromise safety and essential services. CIRB in July said it expects to make its ruling by Aug. 9 (GM July 19, p. 1), and no strike or lockout can take place until at least 72 hours after the decision.
“You can imagine the impact, obviously, of most railroads in the nation being shut down,” Creel said, warning of “mass chaos” if the railway can’t alert their clients to a work stoppage several weeks in advance.
Creel noted that revenues from container traffic fell 4% year-over-year as customers rerouted some shipments due to strike concerns, but said a labor disruption will not affect CPKC’s financial guidance so long as it lasts less than two weeks, the Canadian Press reported. Last week, CN lowered its forecast for earnings growth amid fallout from the strike threat as clients seek to steer clear of Canadian ports and rail lines.
“It’s impacting our business, particularly in the international intermodal where customers have taken actions to reroute vessels away from Canadian ports until the labor questions have been resolved,” said CN CEO Tracy Robinson in a July earnings call. Intermodal volume dropped 17% from May 12 to July 14, according to CN.
According to Trains magazine, a strike would shut down both CPKC and CN in Canada, and would also affect commuter operations in Vancouver, Toronto, and Montreal because the trains operate on trackage dispatched by CPKC rail traffic controllers, who are represented by the TCRC.