Canada labor tribunal orders railroads, workers to resume service

TORONTO (ICIS)–Labor tribunal Canada Industrial Relations Board (CIRB) on 24 August ordered Canada’s two freight railroads and about 9,300 unionized workers to resume rail service at 0:01 eastern time on 26 August.

Freight rail service on both Canadian National (CN) and Canadian Pacific Kansas City (CPKC) was shut down on Thursday, 22 August amid a protracted labor dispute.

With the order, the CIRB follows directions Canada’s federal labor minister issued shortly after the shutdown began.

The dispute between railroads and workers would be settled through binding arbitration, in line with the minister’s directions, the CIRB said.

The board said that “the current circumstances and impact of work stoppages involving Canada’s two main rail companies” were reasons for its decision. The board will provide detailed reasons later, it said.

UNION, RAILROADS WILL COMPLY
Labor union Teamsters Canada Rail Conference (TCRC) and the railroads said they would comply with the board’s decision.

CPKC asked workers to return to work for the day shift on Sunday, 25 August, in order to restore service as quickly as possible and avoid further disruptions to supply chains.

TCRC added that while it would comply with the CIRB’s decision, it would appeal the ruling in court.

In Canada’s chemical industry, trade group Chemistry Industry Association of Canada (CIAC) has said that going by past experience, for each day of a rail disruption it could take three days or more to return to service once labor issues are resolved.

CIAC is particularly concerned about the supply of chlorine and derivatives for drinking water treatment during rail disruptions. For safety reasons, chlorine can only be shipped by rail.

Although the rail shutdown began on 22 August, the railroads stopped accepting chlorine and other hazardous materials for shipment before that date. The disruption in rail service prompted fears that Canadian chlorine plants could be forced to curtail or stop production.

Canada-based chemical producers rely on rail to deliver more than 70% of their products, with some exclusively using rail.

About 80% of Canada’s chemical production goes into export, with about 80% of those exports going to the US, according to CIAC.

(Map by Miguel Rodriguez Fernandez)

Meanwhile, LyondellBasell declared force majeure on all cargo movements by rail to Canada and industrial chemical producer Chemtrade Logistics warned about the impact of the rail disruption on its financial results.

The following table by the American Association of Railroads (AAR) shows Canadian freight rail traffic, including chemicals, for the week ended 17 August and the first 33 weeks of 2024:

Additional reporting by Adam Yanelli and Nurluqman Suratman