It is now official: a massive work stoppage for the rail freight sector will begin in Canada on Thursday 22 August. The initiative is expected to have a significant impact on both Canadian and international supply chains.

This is the result of unsuccessful negotiations between the two main rail freight companies in the country, Canadian National (CN) and Canadian Pacific Kansas City (CPKC), and trade union Teamsters Canada Rail Conference (TCRC). The two companies issues a lockout notice, which would start on 22 August unless a labour deal was reached.

On the other hand, TCRC said it is ready to call for a strike on the same day. “We have served 72-Hours-Notice to withdraw our services, to be effective Thursday August 22 at 0001 Eastern Time”, the union specified. Strike or lockout, what matters is that Canadian rail freight will likely be paralysed with no end date yet being set.

Foreign companies taking precautions

This feeling of uncertainty is having an impact also on companies based outside of the Canadian borders. For example, shipping giant Maersk stopped accepting some Canada-bound shipments. Moreover, US-based rail freight operator Norfolk Southern closed all intermodal facility ingates connected to CN.

TCRC vs CN and CPKC

After a long period of unsuccessful negotiations, CN and CPKC asked for government intervention. However, the Canadian Labour Minister refused, saying that negotiations are the best means to try and reach an agreement. According to CN, the union did not accept the two offers presented by the company in April and May. TCRC also reportedly refused to involve an impartial arbitrator, CN claimed.