A labor dispute has shut down operations at Canadian Pacific Railway – the second largest Canadian railroad that provides significant service into and throughout the United States. The lockout began over the weekend as CP and the Teamsters Canada Rail Conference disagree on how to resolve differences on resolving the dispute.
As a result of the TCRC’s action, CP is executing a safe and structured shutdown of its train operations across Canada and will work closely with customers to wind-down Canadian operations, the company said.
In 2021, Canadian Pacific transported 428,568 carloads of grain and 151,789 carloads of potash, according to Canadian Pacific – much of which originates from or is delivered to the 175 U.S. grain elevators served by the railroad. The railroad is a significant component of the U.S. agricultural supply chain.
Talks are continuing with federal mediators at the table. The negotiations are between Canadian Pacific and the Teamsters Canada Rail Conference over higher pension caps and increased wages and benefits. A lockout is a work stoppage initiated by company management during a labor dispute. Unlike a strike, in which employees refuse to work, a lockout is initiated by the employer.
Wages and pensions remain major stumbling blocks. However, also at issue in these talks are working conditions that call into question the railway’s capacity to recruit and retain workforce members, the union said.
CP said that while the company was still engaged in ongoing negotiations facilitated by federal mediators, the Teamsters Canada Rail Conference withdrew its services and issued a news release “misrepresenting the status of the talks.”
TCRC said in its release shortly before the lockout was announced, the Teamsters Union expressed its desire to continue bargaining. “Unfortunately, the employer chose to put the Canadian supply chain and tens of thousands of jobs at risk,” TCRC said about CP.
Dave Fulton, TCRC spokesperson at the bargaining table, stated, “Canadian Pacific management must be taken to task for this situation. They set the deadline for a lockout to happen tonight, when we were willing to pursue negotiations. Even more so, they then moved the goalpost when it came time to discuss the terms of final and binding arbitration.”
However, CP saw things differently.
“We are deeply disappointed that, in the final hours before a legal strike or lockout was to potentially occur, the TCRC Negotiating Committee failed to respond to the company’s latest offer that was presented to them by the federal mediators,” said Keith Creel, CP president and chief executive officer. “Instead, the TCRC opted to withdraw their services before the deadline for a strike or lockout could legally take place. The TCRC is well aware of the damage this reckless action will cause to the Canadian supply chain.”
Additionally, prior to the midnight deadline, CP clarified that the TCRC Negotiating Committee issued a news release that “falsely claimed that CP had initiated a lockout.” Contrary to the TCRC Negotiating Committee’s claim, the work stoppage was initiated by the TCRC. “In reality, it was CP, with the director general, federal and conciliation services, that remained waiting at the table with the desire to continue bargaining,” CP added.
In final and binding arbitration, the parties agree to accept the arbitrator's decision as final. The Teamsters were willing to explore this type of arbitration but were unable to reach an agreement with the employer, TCRC said.
CP said the actions of the union were “clearly a failure of the TCRC Negotiating Committee’s responsibility to negotiate in good faith.” The company will be reviewing avenues to have this egregious behavior properly addressed, CP added.
TCRC represents approximately 3,000 locomotive engineers, conductors, train and yard workers across Canada.
Predictability in supply chain needed
Mike Steenhoek, executive director of the Soybean Transportation Coalition, said it is never a good time to have a stoppage at one of U.S. agriculture’s key rail service providers, but it is particularly inopportune given the global supply chain challenges that continue to plague the global economy.
“The current war in Ukraine is placing additional pressure on delivering U.S. agricultural production and inputs, particularly fertilizer. A shut down in operations at Canadian Pacific will certainly compound that stress. We encourage both parties to continue negotiations and arrive at an agreement that will result in a quick resumption of service,” Steenhoek said.
Steenhoek added the global supply chain operates best with predictability. “Without predictability, it is impossible to have a functioning, effective supply chain,” he said.
Over the past couple years, the U.S. has experienced a variety of disruptions that have been induced by severe weather such as Hurricane Ida, the COVID pandemic, cyber-attacks on the Colonial Pipeline, structural deficiencies such as the I-40 bridge by Memphis, Tenn., and other causes.
“We now are experiencing a disruption produced by a labor dispute. We are hopeful this additional supply chain challenge will be resolved soon,” Steenhoek said.