Recently, Teamsters Canada Rail Conference, the union representing both CN and CPKC rail workers, voted to reauthorize a strike and stated they will walk out at the earliest opportunity.
Read also: How A Canadian Rail Strike Could Impact Freight Markets
Having operated in the customs and logistics industry through Canadian rail strikes in 2012, 2015 and 2019, I’ve seen first hand the devastating and far-reaching effects such action has on our economy. Previous rail strikes have crippled the Canadian supply chain, grinding the movement of goods to a halt, and to date these have involved one, not both of the Canadian railways.
Many people don’t realize how reliant we are on Canada’s railways to get goods from one place to another. The reality is, when a main railway stops operating, there aren’t enough trucks or drivers to accommodate the surplus of goods that are being imported and exported.
In my opinion rail service in Canada should be deemed an essential service. If previous strikes dictate what is to come, the Canadian government will eventually intervene, but historically this has not happened until damage to our economy is already done. I do think there’s an opportunity for the government to step in and facilitate these conversations earlier in hopes of avoiding this kind of situation where ultimately businesses and consumers pay the price.
Even a one week strike can cause six weeks of turmoil because there’s a huge backlog of goods that need to be shipped. Trucks and shipyards fill up when we can’t access the rail, which creates a logistical mess. The extra pressure put on the supply chain results in sky high rates, which ultimately get passed on to the consumer.
If we’ve learned anything from COVID and previous rail strikes, it’s that it’s time to expand our infrastructure in Canada to improve trade routes between Canada, the United States and Mexico.
When I think about the movement of goods between the CUSMA countries, the volume is continuously increasing. When one strike can completely shut down the supply chain, it’s time to look at ways we can create more resilient systems.
There’s opportunity, for example, to create more cohesion between our trucking, shipping and rail systems. Currently, our supply chain in Canada is quite disjointed. If the industries were more aligned on sharing data for instance, we could create more efficiency for businesses and consumers.
For now, we can only hope that if a rail strike moves ahead in mid July as is likely, that it won’t last for long. In the meantime, businesses must do what they can to prepare for both short and long-term scenarios. This may include stockpiling essential inventory and sourcing out alternative trade routes.
It’s important to stay apprised of the negotiations right now and have clear channels of communication in place with your customers and partners about the impact and any changes a potential strike may cause to your operations and pricing
The impending threat of a rail strike by the Teamsters Canada Rail Conference underscores the critical need to reevaluate how we categorize rail service in Canada. When rail services cease, the resulting bottleneck ripples through the economy, ultimately burdening businesses and consumers with higher costs.
Designating railways as an essential service is a necessary step to protect our economy from future disruptions. We must also take this opportunity to strengthen our infrastructure and improve coordination between rail, trucking, and shipping sectors to create a more resilient supply chain.
As we brace for a potential strike, the stakes are high, and proactive measures are essential to mitigate the impact on our economy now and in the future.
Mike Chisholm is a seasoned leader in the logistics and customs brokerage industries. He is President & CEO of A & A Customs Brokers and Global Logistics.
