Canadian freight railroads prepare to resume operations after brief shutdown

TORONTO (ICIS)–Freight railroads Canadian National (CN) and Canadian Pacific Kansas City (CPKC) are preparing to restart operations after the federal government stepped in to end a labor dispute with workers – although it remains unclear on Friday when exactly a full freight rail service will resume.

Following the lockout of about 9,300 rail workers and the shutdown of operations at both railroads effective Thursday, 22 August, 00:01 Eastern Time, Canada’s federal labor minister ordered binding arbitration to settle the dispute between the railroads and labor union Teamsters Canada Rail Conference (TCRC).

The arbitration process will be conducted by the Canada Industrial Relations Board (CIRB), an independent, quasi-judicial labor tribunal.

The CIRB is expected to act quickly, and trains should be running again “within days”, labor minister Steven MacKinnon said.

• CN said it was “satisfied” that the labor conflict has ended
• CPKC said it remains prepared to resume service as soon as it is ordered to do so by the CIRB
• TCRC said it has taken down picket lines at CN and workers would return on Friday, but at CPKC the work stoppage “remains ongoing”, pending an order from the CIRB

In the chemical industry, trade group Chemistry Industry Association of Canada (CIAC) 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.

“Things will continue to be tight and will need monitoring” going forward, said CIAC president Bob Masterson.

The trade group is particularly concerned about the supply of chlorine and derivatives for drinking water treatment.

For safety reasons, chlorine can only be shipped by rail. Although the rail shutdown lasted less than a day, the railroads had stopped accepting chlorine and other hazardous materials for shipment before 22 August as they prepared for the shutdown.

Canada-based chemical producers rely on rail to ship 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 on Thursday declared force majeure on all rail shipments 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:

With additional reporting by Adam Yanelli and Nurluqman Suratman

Thumbnail photo source: CN