Carriers like Fastfrate Group are bracing for what could be a very disruptive rail strike, warning that the impending shutdown of CN and CPKC railways could trigger supply chain disruptions reminiscent of the pandemic.

With the strike set to begin Aug. 22 at 00:01 ET, Fastfrate is taking proactive steps to secure additional truck capacity to keep goods moving, but chief executive officer Manny Calandrino fears the broader impact could be paralyzing for the economy and trucking businesses.

He says there is never enough time to prepare for a strike of such magnitude, even though the labor disputes and negotiations between the rail companies and Teamsters Canada Rail Conference — which represents 9,300 engineers, conductors, and yard workers — has been going on for several months.

“I’ve been in the business for 50 years, and it is the first time I’ve ever seen both railways go on strike or lockout at the same time,” he said in an interview with Trucknews.com. “For every one day that the railway is shut down, it will take three days to recover.”

There aren’t enough trucks in Canada to replace two railways going on strike, Calandrino added, estimating that 200 trucks would be needed to replace one train’s departure.

“We’re working hard, though. We’re working hard to find solutions for our customers.”

Solutions for customers

Fastfrate has been securing third-party capacity as part of its proactive measures, but the price from last week to this week has increased by 30%, Calandrino said. “And it’s only going to get worse — the further this goes, the higher the price.”

Nonetheless, there are currently three options on the table for the customers.

The carrier can help move freight over the road, a solution that’s roughly four times more expensive than rail. Alternatively, customers can opt to load and stage their containers until the strike ends or hold off on shipping altogether.

The majority of the fleet’s customers — about 60% — have chosen to move their freight over the road, despite the hefty price tag, says Calandrino. Another 30% have opted to stage their containers, while 10% have decided to wait out the strike.

But the looming strike will affect not just carriers’ customers alone but also operations of fleets across the industry, Calandrino added.

With fewer shipments moving, companies might have to downsize and initiate temporary layoffs. If there’s no volume moving, businesses can’t have employees — dock workers, drivers — waiting for work to come when it’s not coming, he said.

And while some bigger fleets that do not solely rely on intermodal operations to stay afloat will get through the strike, though still likely with disruption-caused losses, smaller Canadian carriers relying on LTL intermodal operations are at a higher risk.

Pandemic-like impacts?

Even once the strike ends, the aftermath could create significant bottlenecks at both origin and destination points, too.

“A five-day strike will take a month to get back to normal,” Calandrino said, adding that the backlog of shipments could overwhelm the system, causing further delays and disruption. “It’s going to create another bottleneck right when we’re trying to catch up.”

Such scenarios might lead to pandemic-like supply chain disruptions across the industry, which would paralyze the Canadian economy, Calandrino warned.

“If this thing goes on long, I picture the pandemic all over again: supply chain issues, the product is not where it needs to be, and it is just a scary thought…there was no capacity, and prices went through the roof,” he said. “That was scary, to walk into stores and empty shops. It was like, ‘Oh, we understand now what supply chain means.’ And when it is broken, it’s not good for anybody right across the world, actually.”

Calandrino joins other industry leaders urging the federal government to interfere, hoping that measures will be put in place to “not have this country suffer in any way.”

Several industry voices – including Canadian International Freight Forwarders Association, Canadian Federation of Independent Business and the National Institute of Supply Chain Leaders B.C. – have issued statements warning of potential impacts the strike would have on their members and their operations.

The Canadian Chamber of Commerce and U.S. Chamber of Commerce, too, released a joint statement saying that a stoppage of rail service will be devastating to Canadian businesses and families and will impose significant impacts on the U.S. economy.