Shippers fear rail strike in Canada this week

Commodity shippers fear that a potential strike by rail workers this week at Canadian Pacific (CP) could cost them millions of dollars in delayed deliveries, lost sales and extra storage fees.

Members of Teamsters Canada Rail Conference (TCRC) working at CP voted earlier this month to go on strike as early as 16 March if they do not agree on a new labor contract.

A strike is not just a possibility; the last three collective bargaining rounds between CP and TCRC resulted in strikes.

Even short strikes can disrupt operations because carriers and shippers start preparing ahead of any action and then need days or weeks to catch up on delayed shipments.

Shippers are already struggling with transportation. Trains are running slower. A global container shortage has forced shippers to miss deliveries and put products into storage, which in turn has limited storage space. And a truck driver shortage in Canada has limited deliveries.

"Our systems are really struggling and this [possible] strike is adding insult to injury in meeting shippers' needs and getting products to market," according to Joel Neuheimer, vice president of international trade and transportation at the Forest Products Association of Canada. "Even if it lasts only a couple days, losses will be in the tens of millions just for forest product shippers."

Fertilizer shippers are also concerned. "The agricultural sector is already experiencing supply challenges compounded by the [situation] in Ukraine and cannot withstand any more disruption to the supply chain without severe consequences," Fertilizer Canada chief executive Karen Proud said.

US agriculture and fertilizer organizations — members of the Agricultural Transportation Working Group — recently urged the US and Canadian governments to avert the strike and mitigate trucking delays as transportation challenges threaten preparations for the spring farming season.

More contract negotiations are coming. Contracts between Canadian National and TCRC conductors, locomotive engineers and rail traffic controllers expire this year.

By Abby Caplan