Frustration is building in the agriculture sector as more than 3000 CP rail conductors, engineers, train and yard workers are on the picket line.
CP says members of the Teamsters Canada Railway Conference walked off the job Sunday, while the union says they were locked out after the two sides failed to reach a deal prior to the strike / lockout deadline.
For weeks now, the agriculture sector has been raising concerns about the potential impact the strike could have.
The Western Grain Elevators Association, Executive Director, Wade Sobkowich says what's going on here is just horrible.
"When it comes to something like this, we'd consider it an artificial disruptor, and it should be something we can control as a country. We shouldn't have to be subjected to something that is firmly within our control, and so it is going to have (this stoppage) is going to have an impact. Like anything else has an impact, like the floods have had an impact, like the blockades in the past have had an impact. It results in a stoppage of shipping, and that has the same impact as everything else. We deal with vessel demurrage, we deal with contract extension penalties, contract defaults. Our reputation with our customers are in the toilet this year, it's just terrible. You know, when we had a short crop, they were expressing concerns, and we responded at that time. Yeah, we're about two thirds of normal, but we should be able to get it to you in a timely way, and that hasn't happened. So, there are a lot of things thrown at us this year, and this is one that we don't need. "
He notes we have a real problem when it comes to Canada's reputation as a reliable supplier.
"We have a real problem with fertilizer coming in for the spring out of the US for farmers. We have a problem with getting product to the cattle feeders, we have a problem getting product to our domestic processing facilities. So I don't want to leave the impression that this is only an export problem because it isn't it's also a domestic problem. And it's really going to hit us in a bad way."
He notes they really encourage the government in the strongest of terms to impose binding arbitration now, and implement a change in the Canada labour code to declare rail an essential service so that there is another mechanism for a fair and reasonable outcome.
"Nobody is saying that there shouldn't be a fair decision as a result of this labour dispute, but it shouldn't be reached by holding the economy hostage."
He says the railways run so lean, they have almost zero ability to deal with adversity, they have no contingency plans and no resiliency built into their operational plans.
When we have a circumstance like we had this year, he says, with washouts,flooding and cold weather, it just puts shipping back and delays shipping further and further; and that's really the root of the problem when it comes to most of those things.
"The railways both put out grain plans and identifies how many rail cars they're supposed to move week in and week out. Let's say, for the sake of argument, the numbers are a bit different on CN and CP. But let's say that's 5000 rail cars per week for each of CN and CP when the weather is good. Then 4000 rail cars per week, when we had the cold period of the seat of the year. Well, the railways have been providing 1000 rail cars per week, less than 1000 rail cars per week for extended periods of time. It's just been horrible. If there is one silver lining, it's that we have a smaller crop, but we think the railways are providing less service because we have a smaller crop. So, they tend to adjust their offering to be less than demand or what they think demand is going to be because they want 100% asset utilization. They don't want assets sitting around idle."
Sobkowich says, how do you build or account for any resiliency if you don't have assets ready to deploy when adversity strikes.
"We thought we were at least coming out of that now, with the weather warming up. And this stoppage is the last thing we need. We shouldn't have to be dodging bullets here, and it seems like every year, every second year, we have a rail work stoppage, and we're dodging bullets. You know, we track this over the last dozen years, and we've had between 10 and 12 stoppages or threats of stoppages."
He notes they really feel like rail should be an essential service, that they (railways) shouldn't be allowed to hold the economy hostage.
"The government said that during COVID, the supply chains were supposed to continue to operate, grain was supposed to continue to operate. So why shouldn't we be able to continue to operate now, in the midst of a labour dispute?"