Wednesday reports indicate that failing a settlement during the balance of the week, 3,000 Canadian Pacific Railway workers covered by the Teamsters Canada Rail Conference (TCRC), as well as 366 staff from the International Brotherhood of Electrical Workers (IBEW), will strike starting 12:01 A.M. on April 21. This is untimely news for prairie producers, with both railways having made commitments to increase the flow of grain, given the poor performance achieved over the winter months.
So far this crop year, CP performance has exceeded CN in 30 of the 36 shipping weeks, in terms of empty hoppers spotted for loading in the week wanted relative to demand. As well, the week 36 unfulfilled shipper demand attributed to CP Rail is only 19.6% of the total unfulfilled demand, with only 100 outright cancellations, as compared to the 22,081 cars cancelled by CN Rail.
Should a strike take place this weekend, it would be the third such action in six years. In 2012, federal government back-to-work legislation ended the strike after nine days, with the federal Conservatives estimating damage at $540 million/week to the country's economy. The opposition NDP party accused the government of infringing on workers' rights.
On Feb. 16, 2015, the Globe and Mail reported that a CP strike ended after two days after the Teamsters union agreed to arbitration just hours before the federal Conservatives were poised to enact back-to-work legislation. The newspaper reports that labor experts view the government involvement to be harmful overall and could increase the likelihood of future work stoppages. This weekend could see a test of the federal Liberal party's resolve to end this dispute.
What is interesting in media coverage of these events is that in 2012, a reported 4,800 Teamsters union members and CP staff were involved, in 2015 reports said roughly 3,300 strikers, while current stories estimate 3,000 workers poised to walk off. While this may be an exaggeration of how the workforce has changed over time, the fact that Canada's competing railroad is offering incentives for retirees to return to work suggests that cost-cutting measures over time designed to please shareholders may be partially linked to poor grain shipping performance.
As seen on the attached chart, CP's placement of empty hoppers in the country for loading in the week wanted has fallen short of year-ago levels in just nine of the first 36 shipping weeks. Six of those have fallen in the past seven weeks, with the most recent week 36 data showing that only 53% of the cars in demand for loading were spotted for loading, the second poorest week so far this crop year next to week 30 where only 50% of the cars requested were spotted (blue line with markers).
As seen by the 2016/17 data, represented by the brown line with markers, CP's performance logged a noticeable improvement this time last year. In week 35, CP spotted 67% of the cars requested by shippers for loading and improved steadily to a high of 97% in week 40, while holding between 88% and 97% over the last 15 weeks of the crop year.
Luckily for grain shippers, service for passenger trains in the Montreal, Toronto and Vancouver areas are also affected, Canada's largest cities. An absence of service on Monday morning will involve tens of thousands of commuters and will result in angry calls to government officials across the country.
Wednesday negotiations have obviously not gone well. A CP Customer Station Bulletin stated, "CP has commenced and will continue to execute a safe and structured shutdown of its train operations in Canada," with an embargo application for shipments now in effect that includes:
-- Shipments that originate in Canada billed to any Canadian or U.S. destination, and
-- All shipments originating in the U.S. billed to Canadian destinations.
Cliff Jamieson can be reached at email@example.com
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