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Latest rail strike may disrupt the US-Canada supply chain

Monday, March 21, 2022

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The workers at the Canadian Pacific Railway Ltd, the second largest railway company have again threatened to go on a strike again. This can potentially disrupt the supply of grain, potash and coal supplies to the USA when the commodities prices are risings. This strike can pose a potential risk to the already decimated supply chain. This comes after the floods in British Columbia  washed out the tracks suspending access to Canada’s biggest port. The COVID-19 pandemic, a trucker shortage and costly global freight rates have also hampered the flow of goods and ignited food inflation.

After Russia, Canada is the second largest country by area and is heavily depends on rail to move commodities and manufactured goods to port. The railway network runs across much of southern Canada and it extends to as far as Kansas City in the USA. Their largest business is transporting grain. 2019 saw the last major Canadian railway labor stoppage at Canadian National Railway Co. This strike lasted for 8 days and took weeks for the shippers to recover.

Engineers, conductors,yard workers were amongst the 3,000 members of Teamsters Canada Rail Conference who voted to potentially strike just after midnight Wednesday. The 72hr required notice was not issued by the Union. This means that no legal work stoppage can occur before Friday at the earliest.

John Brooks the Chief Marketing Officer of C.P. has said that if the Union continues with the strike the company will unable to operate the railroad. The key issue of the strike is mainly the union’s request for higher pension caps. Nadeem Velani, the Chief Financial Officer said at an investor conference said that the railway company  is unwilling to accept that demand. C.P. carries U.S. grain to Pacific Northwest export terminals, and moves potash fertilizer into the United States, which is critical ahead of spring planting season. The Canadian government pass legislation that would order workers back to their jobs if they strike.

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