If negotiations with its Canadian labor union do not advance, Canadian Pacific Kansas City (CP.TO), opens a new tab said on Saturday that it would halt all new shipments by rail that originate in Canada and all new shipments from the United States that are destined for Canada starting on Tuesday.
The Teamsters union’s talks with Canadian National Railway (CNR.TO), and CPKC have deadlocked, and the rail companies say they will start locking out workers on Aug. 22 if they cannot reach a labor deal.
North American industry groups and shippers are bracing for an unprecedented simultaneous stoppage at both of Canada’s main railway companies. This could disrupt the movement of commodities such as coal, potash, crude oil, and grains, as well as manufactured goods ranging from cars to chemicals The union claims to be prepared to call a strike on that day. “Prudent steps to prepare for a potential rail service interruption next week,” the CPKC stated in a Saturday update.
The CPKC had already begun to halt any new shipments of hazardous chemicals or dangerous goods earlier this week, and it stated that bargaining talks were scheduled to continue on Sunday. Separately, on Friday, CN Rail stated that “there has been no meaningful progress at the bargaining table” and that it had begun a gradual shutdown of its network.
CN Rail stated that unless a settlement is reached or binding arbitration is mandated, this will result in a lockout. Canada’s Labour Minister Steven MacKinnon urged CN Rail and the unions to negotiate in good faith after rejecting the company’s request earlier this week to initiate binding arbitration. Industry groups are concerned that simultaneous work stops at both rail companies could cause economic harm worth billions of dollars.
It may also have an effect on trade with Mexico and the United States. Chicago, New Orleans, Minneapolis, and Memphis are just a few of the major U.S. rail and shipping hubs connected by the CN and CPKC networks. Additionally, ports on the east and west coasts of Mexico are included in the CPKC network’s further south reach.
