Trains carry billions of dollars’ worth of products between the United States and Canada every month, according to the U.S. Department of Transportation.
Due to a labor disagreement, both of Canada’s main freight railroads have completely halted operations. Should the trains not quickly begin operating, this deadlock could have a substantial negative economic impact on consumers and businesses in both Canada and the United States.
The Teamsters Canada Rail Conference, which represents over 10,000 engineers, conductors, and dispatchers, set a deadline of 12:01 a.m. Eastern on Thursday, and both Canadian National and CPKC railroads locked out their workers.
While CPKC and CN’s trains will still run in the US and Mexico, all rail travel in Canada has ceased, as have all cargo entering the US.
Trains carry billions of dollars’ worth of products between the United States and Canada every month, according to the U.S. Department of Transportation.
“Businesses and families across the country will feel the impact if rail traffic grinds to a halt,” said in a statement National Association of Manufacturers President and CEO Jay Timmons. “Disruptions to the supply chain will leave manufacturing workers, their communities, and consumers of all kinds of products reeling.”
Other effects will also arise, such as for the roughly 30,000 commuters in Vancouver, Toronto, and Montreal who would have to find an other route to work since their trains cannot pass over CPKC’s lines during the railroad’s shutdown.
Although business associations had called on the government to step in, Prime Minister Justin Trudeau has not yet agreed to compel arbitration on both sides.
When it made one more offer late on Wednesday, CN stated it was awaiting a response. At that time, it locked the employees out. According to CPKC spokesman Patrick Waldron, the union turned down CEO Keith Creel’s last proposal when he was present at the table. Both railroads have stated that if the union accepted binding arbitration, they would call off the lockout.
The union released a statement saying, “The Teamsters remain at the bargaining table with both companies despite the lockout.”
According to the unions, CPKC had been attempting to come to an agreement for a year, while CN had been in negotiations with the Teamsters for nine months.
Many businesses in many sectors depend on railroads to deliver their completed goods and raw materials, thus in the event that train service is disrupted, they could be forced to make cuts or even close.
Because of this, the United States government prevented train workers from going on strike two years ago and made them sign a contract even though they were unhappy with the strict timetables and the absence of paid sick leave.
While both Canadian railroads have occasionally stopped operating simultaneously during contract disputes in the past—CPKC most recently went offline for a few days in March 2022—it is uncommon for both to do so simultaneously. Businesses will be particularly affected as a result of CN and CPKC stopping.
Since last week, CN and CPKC have been progressively closing in front of the deal deadline. Perishable goods and dangerous chemical shipments were the first to halt so they wouldn’t get stuck someplace on the lines.
One of the largest American railroads, CSX, broke with the long-standing norm of the U.S. freight rail sector to negotiate cooperatively with the unions for years, just as the Canadian contract negotiations were drawing to a close. Before the commencement of nationwide negotiations later this year, CSX came to an agreement with a number of the 13 unions that represent 25% of its workforce.
All rail travel in Canada has ended, as has all freight entering the US, however CPKC and CN’s trains will continue to operate in the US and Mexico.
Every month, trains transport goods valued at billions of dollars between the United States and Canada, as per the U.S. Department of Transportation.
“If rail traffic grinds to a halt, businesses and families across the country will feel the impact,” CEO and president of the National Association of Manufacturers Jay Timmons stated in a statement. “Disruptions to the supply chain will leave manufacturing workers, their communities, and consumers of all kinds of products reeling.”
There will be further repercussions as well. For example, the approximately 30,000 commuters in Vancouver, Toronto, and Montreal who would not be able to use CPKC’s lines to go to work during the railroad outage would need to find an alternate route.
Despite the demands of business groupings for the government to intervene, Prime Minister Justin Trudeau has yet to consent to requiring arbitration from both parties.
Late on Wednesday, CN made one more offer and said it was waiting for a response. The staff were shut out at that point. Spokesman for CPKC Patrick Waldron said that while CEO Keith Creel was at the table, the union rejected his last offering. Both railroads have declared they would end the dispute provided the union agreed to enforceable arbitration.
In a statement, the union said, “The Teamsters remain at the bargaining table with both companies despite the lockout.”
As per the unions, CN had been negotiating with the Teamsters for nine months, while CPKC had been trying to reach a settlement for a year.
Many companies across several industries rely on railroads to supply their raw supplies and finished goods, so if train service is interrupted, they may have to make adjustments or maybe close.
Because of this, the US government forced train employees to sign a contract and stopped them from going on strike two years ago despite their dissatisfaction with the rigid schedules and lack of paid sick leave.
It is unusual for both Canadian railroads to cease operations at the same time during a contract dispute, however this has happened on occasion in the past (CPKC most recently went offline for a few days in March 2022). Businesses will be most impacted by the cessation of CN and CPKC.
Prior to the transaction deadline, CN and CPKC have been steadily closing since last week. In order to avoid becoming trapped somewhere along the lines, shipments of hazardous chemicals and perishable commodities were the first to be stopped.
Just as the Canadian contract discussions were coming to an end, one of the biggest American railroads, CSX, defied the long-standing tradition of the U.S. freight rail industry and engaged in years of cooperative union negotiations. A handful of the 13 unions that make up 25% of CSX’s workforce reached an agreement with the company prior to the start of countrywide discussions later this year.
