North American Railway Difficulties

Yet another transportation issue bombshell hit the North American forest industry last week in the form of a potential looming labour disruption in Canada.
Wednesday reported the Manitoba Co-operator that members of the Teamsters and IBEW (International Brotherhood of Electrical Workers) unions were set to strike CP Rail April 21, but postponed it until union members could vote on CP’s final offer.

North American Transportation Bottlenecks: 2017 – 18

Members of the Teamsters and IBEW (International Brotherhood of Electrical Workers) unions were set to strike CP Rail April 21, but postponed it until union members could vote on CP’s final offer, said the Manitoba Co-operator Thursday. Those offers were presented to union negotiators late last week, just hours before 3,400 workers were scheduled to go on strike.

Although it has been CN Rail’s poor shipping performance that has made the headlines, CP Rail’s service has been getting worse on average delivering on time just 42 per cent of the cars Manitoba shippers had between crop year weeks 33 and 36.
For their part, lumber producers have been hit by the same backlog of rail cars as the agriculture sector, leading to large stockpiles at sawmills and lost profits, according to Global News Tuesday. A potential strike was averted over the weekend after the federal government ordered CP Rail’s two main unions to vote on the company’s final contract offer. The unions are urging their members to reject the deal.
Even at writing Nutrien, the world’s largest potash mining company, confirmed to the Saskatoon Star Phoenix Thursday that it will start laying off about 700 people at its Vanscoy mine Friday, and an additional 600 at its Allan operation beginning on May 6.
Such a monstrous negative impact on business is beyond appalling:

“This is a direct result of railway performance challenges experienced so far this year,” Richard Downey, a spokesman for the company formed this year in the merger of Potash Corp of Saskatchewan and Agrium, wrote in an email Thursday to the Saskatoon Star Phoenix.

Breaking news last Thursday afternoon out of the Western Producer, was that a strike has been averted, at least temporarily, at Canadian Pacific Railway.
However, union leaders at Teamsters Canada Rail Conference (TCRC) and the International Brotherhood of Electrical Workers (IBEW), say it’s only a matter of time before their members walk off the job at CP.
On April 20, Canadian Labour Minister Patty Hajdu determined that CP workers should be required to ratify or reject a pair of final labour offers made by CP to members of TCRC and IBEW.
Meanwhile, also late Thursday, BNN explained that the country’s largest railroad would not be able to pick up much of the slack if a labour dispute at rival Canadian Pacific Railway leads to a strike. Jean-Jacques Ruest, interim president and CEO of CN Rail, spoke to BNN on the sidelines of its annual shareholder meeting in Toronto on Tuesday and said that  “booming” business stemming from western Canada has caught the company by surprise.
Back to forest operators, “Only about half the number of rail cars we are seeking are arriving at the mills,” said Paul Whittaker, the CEO of the Alberta Forest Products Association, to Global News Tuesday.

Canadian Railroads Not Prepared for Increased Business Activity

Ruest’s comments come after a strike by CP Rail workers was temporarily averted after the federal labour minister ordered employees to vote on the company’s final offers just hours before they were set to walk off the job last week. Union leaders, however, are warning that a rail strike is inevitable as they urge members to reject CP’s offer.

“Right now the capacity we have is by and large spoken for, so we wouldn’t be much of a factor to be able to pick up the slack if there was going to be a [CP Rail] labour disruption,” Ruest said to BNN. “Having good labour relations is extremely key to [a] company keeping all its supply chains in check,” he added.


On April 18, 2018, the AAR (Association of American Railroads) published its weekly rail freight data. The data relates to 12 major North American railroads for the week ended April 14, 2018, or Week 15.
In the 15th week of 2018, US railroads reported a +4.3% increase in total rail traffic, including intermodal units. These railroads moved ~534,200 railcars in that week, compared with more than 512,300 units in the week ended April 15, 2017. While carload traffic expanded +1.6% to more than 258,000 railcars, intermodal volumes surged +6.9% to ~276,000 containers and trailers.
Canadian rail (CP) carriers registered +0.9% growth in carload traffic, crossing more than 84,600 units in Week 15. Their intermodal volumes soared +7.7% to more than 67,300 units compared with the same week in 2017.

Government-Imposed Deadline

As for the last-minute government intervention, in a statement, union leaders called CP’s offers “ridiculous” and strongly recommended that their members reject the deals through the federally mandated ratification process.
The date of the electronic ratification vote, to be facilitated by the Canadian Industrial Relations Board, had yet to be announced as of April 23.
“Because of this new development, the Teamsters and the IBEW will postpone a strike until their members have had chance to vote on (CP’s offers),” the IBEW and TCRC said in a joint statement. However, once CP’s offers are rejected, both unions will be free to exercise their rights to strike, the statement added.
“CP succeeded in delaying the inevitable,” added TCRC president Doug Finnson.
“The government will bring this ridiculous offer to our members and we strongly recommend that members vote against it…. CP can’t hide from us forever. Once our members reject their final offer, CP will have exhausted all possible escape routes and they will face their workers once again.”
The unions said 94 per cent of TCRC workers voted in favour of strike action earlier this month, along with 98 per cent of IBEW members.