There are concerns that Canada’s two largest railway companies could decide to close their factories due to labor-management conflicts, causing massive logistical disruptions.
Canada National (CN) and Canada Pacific Kansas City (CPKC) issued a statement on the 22nd local time, respectively, saying they will begin shutting down their workplaces for members of the Teamsters due to the breakdown of collective negotiations with the North American transport union, the Teamsters.
The two railway companies previously announced that they would go into lockdown if the union accepts the deal or fails to make a binding arbitration.
“It is clear that despite our best efforts, we cannot reach a deal with the union,” CPKC said in a statement, blaming the union for the closure, while CN also claimed that “the union has rejected the management’s proposal in labor-management negotiations that have continued since the beginning of the year.”
On the other hand, the Canadian Railway Conference (TCRC), a branch of Teamsters Canada, accused CN and CPKC of compromising rail safety for additional revenue during the negotiations.
The industry is concerned that a series of rail disruptions in the aftermath of the lockdown could result in a huge economic hit.
Moody’s, a credit rating company, estimated that the suspension of Canadian railway operations could result in a loss of about C$341 million per day and about 330 billion won in our money.
Canada relies heavily on its rail network for land logistics, leading to the prospect that the suspension could affect logistics in a variety of sectors, including grain, fertilizer, coal, petroleum, chemicals and automobiles.
SOPHIA KIM
US ASIA JOURNAL
