Freight Train Dispute in Canada: Lockout Threatens Vital Supply Chains
Photo: Public domain. A freight train in Ontario.
Billions of dollars worth of freight move between Canada and the US each month via rail, according to the US Department of Transportation. However, this important supply chain is under threat due to a labor dispute in Canada, which has led to the lockout of workers by two of the country’s largest rail companies.
The Lockout
The country’s two largest rail operators, Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC), locked out nearly 9,300 workers after midnight on Thursday (04:00 GMT), following the failure of last-minute talks. Negotiations have stalled over shift rosters, rest periods, and pay.
Impact on Supply Chains
Canada sends around 75% of all goods it exports to the US, mostly over rail. A prolonged dispute could disrupt shipments of a wide range of goods, from grains and beans to potash, coal, and timber. Potash is a vital agricultural fertilizer.
The Warning
Dozens of industry and trade organizations have warned of the disruption’s potential impact, including the US and Canadian chambers of commerce. The latter has warned of the devastating impact on Canadian businesses and families, as well as the US economy. A group of agriculture trade associations has urged the government to step in, but Ottawa has so far resisted calls for binding arbitration.
Consequences of the Dispute
During the lockout, rail networks in the US and Mexico will continue to operate. However, a stoppage in North America could have far-reaching consequences, including the disruption of critical goods like fertilizer, grain, and timber.
The shutdown could also snarl commuter transit in major Canadian cities like Toronto and Montreal as some dispatchers will be on a work stoppage.
FaqS
What are the major rail companies involved in the dispute?
Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) are the two largest rail companies in Canada, and the primary players in the current labor dispute.
What goods are affected by the dispute?
Grains and beans, potash, coal, and timber are among the many goods that are critical to Canada’s export market, and may be impacted by the lockout.
How much cargo is moved by rail in Canada each year?
Some C$380bn (£214bn) in goods is moved by rail each year in Canada, with railways responsible for transporting half of the country’s goods for export.
Will this affect international trade?
Yes, the dispute has the potential to impact international trade between Canada and the US, as well as Canada’s reputation as a reliable trading partner.
Conclusion
The dispute between the Canadian rail companies and the union represents a critical juncture in the global supply chain. With millions of dollars at stake and significant impacts on both sides of the border, a resolution to this labor dispute is imperative to avoid long-term consequences.