Tomorrow, August 22, 2024, is the deadline for major Canadian railroads to avert a strike.
With less than 12 hours until two of Canada’s largest railroads plan to strike, the shipping and logistics community is watching closely. At 12:01 am tomorrow, Canadian Pacific Kansas City and Canadian National railroads plan to strike if a deal is not reached. Rail workers, members of the international Teamsters union, will work off the job in the event of a strike.
How are negotiations to avoid a strike progressing?
Negotiations, to date, have been between Canadian Teamsters rail workers and the railroads. The Canadian government officially opposes federal intervention in the negotiations. The national Canadian government, led by Prime Minister Justin Trudeau, had not previously intervened, although the Canadian Labor Minister has begun holding some discussions as of yesterday. The chief concern of the rail workers is understaffing, scheduling, and safety.
The two railroads, for their part, say that increased compensation was proposed. No agreement has been reached at this time. And, as recently as yesterday, the railroads in question started embargoing some shipments in anticipation of a strike.
What happens if a Canadian rail strike occurs?
There will be supply chain disruptions far beyond Canada’s borders if a rail strike occurs. Canadian Pacific Kansas City, one of the two railroads in question, would suspend any rail shipments originating in Canada, a move that would ground everything from timber, oil, grains, and more coming into the U.S. from Canada.
As many as 2,500 railcars should be grounded during a strike each day. As of today, both railroads in question will continue any train shipments currently in the U.S.
In 2022, there was scheduled to be a similar rail strike, but U.S. President Joe Biden intervened and the strike was averted at the last-minute. This time, the Canadian government has not been involved, so uncertainty continues.
If a strike occurs, expect delays in U.S. bound containers, shipments, and other transportation that uses rail infrastructure, as well as backlogs at Canadian and some U.S. ports.
