Canada freight rail strike unlikely to begin before mid-July, rail carrier says

TORONTO (ICIS)–A possible freight rail strike in Canada is not likely to begin before mid-July, according to rail carrier Canadian Pacific Kansas City (CPKC).

The ongoing uncertainties over the looming strike make it hard for Canadian chemical, fertilizer and other industrial producers, in particular exporters, to prepare for a work stoppage.

After about 9,300 unionized conductors, train operators and engineers at freight rail carriers CPKC and Canadian National (CN) earlier this month voted for a strike as early as 22 May, Canada’s federal labor minister referred the matter to the Canada Industrial Relations Board (CIRB), a quasi-judicial tribunal charged with keeping industrial peace in Canada.

The minister wants the CIRB to investigate if disruptions to the supply of certain products (heavy fuel, propane, food, chlorine and other water treatment chemicals) could pose safety and health issues.

A legal strike or lockout cannot occur until the CIRB makes a decision.

In a statement, CPKC said that while it remains unclear how long it will take for the CIRB to issue a decision, “based on precedent, it is unlikely the parties will be in a position to initiate a legal strike or lockout before mid-July or later”.

Labor union Teamsters Canada Rail Conference (TCRC) said that it would have to give 72-hour notice before starting a strike, meaning that the earliest date for a strike to begin is at least 72 hours after the CIRB makes its decision.

After TCRC and the rail carriers made no progress in the latest collective bargaining talks ended 21 May, the parties are scheduled to meet again next week to continue negotiations with the assistance of federal mediators.

IMPACTS ON CHEMICALS AND FERTILIZERS
Freight rail work stoppages can quickly affect logistics in the chemical, fertilizer and other industries, and a simultaneous stoppage at CPKC and CN, which are Canada’s biggest rail carriers by far, would magnify impacts.

The uncertainties about the exact timing of strike actions has already created difficulties in planning for sulfur importers and exporters in North America.

“We are just waiting to see what will happen. We did quite a bit of sulfur business before the situation about the strike happened, but it is very difficult to know what to do next”, a source at a major exporter of sulfur told ICIS earlier this week.

In the fertilizer industry, about 75% of all fertilizer produced and used in Canada is moved by rail and the industry depends on rail to move product across the country and into international markets.

In the chemical industry, chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail.

In the run-up to potential strikes, producers need to prepare, longer strikes can force them to curtail production or shut down plants, and after a strike ends it can take weeks for normal operations to resume.

Canada freight rail traffic, ended 18 May:

Source: Association of American Railroads

With additional reporting by Julia Meehan
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Thumbnail photo source: Canadian Pacific Kansas City