All Posts from August 16, 2024

Railroads Threaten Aug. 22 Work Stoppage; Fertilizer Canada Says Ammonia Shipments Already Impacted

Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC) on Aug. 9 issued statements saying they will lock out more than 9,000 employees with the Teamsters Canada Rail Conference (TCRC) on Aug. 22 if a negotiated contract between the union and railroads is not reached by that date or if the TCRC refuses to agree to binding arbitration.

“Unless there is immediate and meaningful progress at the negotiating table or binding arbitration, CN will have no choice but to begin a phased and progressive shutdown of its network, starting with embargoes of hazardous goods, which would culminate in a lockout at 00:01 Eastern Time on Aug. 22,” CN said.

“Any product coming to, leaving, or moving within Canada on rail will not be transported during a work stoppage,” CN warned. “Only limited train movements within yards will be executed as there are not enough certified management train crews to ensure intercity train movements.”

The statements followed an Aug. 9 ruling by the Canada Industrial Relations Board (CIRB) that a strike or lockout would pose no serious danger to safety or public health. Both sides had been awaiting the ruling after the CIRB intervened in the dispute in May at former Labor Minister Seamus O’Regan’s request (GM May 24, p. 1) to avoid a threatened strike on May 22.

“There is no doubt that a work stoppage at CPKC/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 CIRB said in its decision. “While such possible harm is by no means insignificant, these are not factors that are to be considered by the Board” under the Canadian Labour Code.

The TCRC also issued a statement on Aug. 9 saying it will give 72 hours advance notice in the event of any strike action. “The union’s focus remains on negotiating in good faith and reaching agreements at the bargaining table. Whether or not that is possible is entirely up to CN and CPKC,” the TCRC said.

“From the very beginning, rail workers have only ever sought a fair and equitable agreement,” said Paul Boucher, TCRC President. “Unfortunately, both rail companies are demanding concessions that could tear families apart or jeopardize rail safety. Rail workers have fought for a safer and more humane industry for decades, and we will not accept moving backwards.”

The two sides have been at an impasse since early this year over issues related to fatigue management and crew scheduling. TCRC members voted in April to authorize a strike action (GM May 3, p. 1) and again in late June (GM July 5, p. 1) after the first authorization expired.

“Since the beginning of the year, CN has made four offers to the TCRC,” CN said on Aug. 9. “The offers included points on wages, rest, and labor availability while remaining fully compliant with the government-mandated rules overseeing duty and rest periods. None of CN’s offers compromised safety in any way. The latest offer proposed third-party arbitration. The union rejected all offers and has made no counter proposals.”

“Supply chains require predictability to function properly,” CN continued. “Unfortunately, even the possibility of an unpredictable labor disruption and subsequent disorderly shutdown creates a safety risk and unacceptable uncertainty for industries that depend on rail. Prolonged uncertainty will impact consumers and workers across industries and across Canada.”

CPKC noted the timing of the lockout, saying it was acting “to protect Canada’s supply chains…from the more widespread disruption that would be created should a work stoppage occur during the fall peak shipping period. Delaying resolution to this dispute only makes things worse, causing more disruption and damage to Canada’s international reputation as a reliable trading partner,” the railroad said.

CPKC also warned the TCRC that the railroad’s latest contract offer will be “conditionally” withdrawn and replaced with a “status quo-style contract renewal” if the two sides remain deadlocked. Both CN and CPKC had pressed for binding arbitration in June (GM June 7, p. 1), but the TCRC rejected the offer.

The news of a pending lockout or strike was met with frustration by numerous industry trade groups, including the Chemistry Industry Association of Canada (CIAC), Canadian Manufacturers and Exporters (CME), the Canadian Chamber of Commerce, and Fertilizer Canada.

“Fertilizer Canada is calling on the federal government and Labor Minister Steven MacKinnon to take immediate action to assist all parties…in reaching agreements, including ordering a directive for binding arbitration that prohibits TCRC from undertaking strike action and CN and CPKC from lockout action,” Fertilizer Canada said in an Aug. 12 statement.

The trade association noted that both CN and CPKC have already issued embargoes halting certain ammonia fertilizer shipments a full 10 days ahead of any anticipated labor disruption, while service for all products will begin to slow 3-5 days ahead of a work stoppage and take another 3-5 days to reach regular service once it ends. Fertilizer Canada said 75% of all fertilizer produced and used in Canada is moved by rail.

“The threat of a work stoppage has already begun to impact the movement of fertilizer and our industry anticipates further embargoes and slowdowns in rail service,” Fertilizer Canada said. “A work stoppage that prevents the transportation of fertilizer will have potentially disastrous effects on crop yields and food security.”

Fertilizer Canada urged the federal government to amend the Canada Labour Code to strengthen the bargaining process, and also asked the federal government to recognize fertilizer as an essential good critical to domestic and global food security that should continue to move during work stoppages.

“We have had the threat of a work stoppage hanging over our heads since the beginning of the year,” said Karen Proud, President and CEO of Fertilizer Canada. “Canada’s reputation has been damaged by the numerous supply chain disruptions in recent history. This uncertainty gives our international competitors, like Russia and China, an advantage. We need swift action to protect Canada’s reputation as a reliable trading partner.”