SPECIAL REPORT: Supreme Court to rule on pivotal freight forwarding case

OTTAWA — Anxious Canadian freight forwarders will have to wait a little longer for the Supreme Court of Canada’s landmark decision on whether cross-dock, intermodal carrier Consolidated Fastfrate can be federally unionized.

The Court has reserved its decision on whether the company is a national entity and thereby governed by federal labor laws, including collective bargaining standards.

The case, which stretches back to 2004, is expected to define once and for all the legal status of all types of freight forwarders whose physical operations are regional in scope, but, interprovincially, use third parties with nation-wide reach to deliver freight.

Consolidated Fastfrate (CFF), which is owned by American private equity firmFenway Partners, is officially a freight-forwarding business, which collects customers’ local shipments, consolidates them at its cross-dock terminals in major cities, then arranges for the interprovincial transportation with third-party carriers, mainly CP Rail. When the shipments arrive at a Fastfrate facility at the other end, the company de-consolidates them into LTL loads and hauls them to customers with its own trucks or contracted drivers.

The Consolidated FastFrate case is the canary that will determine
the jurisdictional status of many freight forwarding carriers

At issue is whether the carrier’s (and others like it) physical handling of the freight, on a local basis, qualifies it strictly as a provincially regulated carrier, despite marketing itself for interprovincial transport via a network of partners.

Most transport companies — particularly marine, air, rail and a majority of linehaul carriers — fall under Ottawa’s jurisdiction for labor relations. The definition of a forwarder, though, has always been murkier. As a result, certain firms could be considered provincial if their active role is limited merely the local organization and distribution of interprovincial freight.

In 2004, CFF employees in Calgary were unionized by the Calgary Employees Association. Enter, then, The Teamsters, which convinced the Alberta Labour Relations Board (ALRB) to certify the union so it could collectively bargain under the Federal Labor Code for all non-clerical workers in Alberta, Saskatchewan, and Manitoba.

Arguing the Teamsters lacked employee support, the company and Calgary Employees Association (CEA) opposed the move, requesting it be quashed, though to no avail.

But a year later, the CEA was reinstated when Alberta Court of Queen’s Bench judge Dennis Hart reviewed the case and found that the Labour Board erred in finding Fastfrate is sufficiently involved in interprovincial transport to be governed by federal labor laws.

The Teamsters responded by taking the case to the Alberta Court of Appeal, which in 2007 sided with the original ALRB ruling and declared CFF to be a federally regulated company once again. Here, the Court emphasized that the physical transport of cargo was not the main issue, but "whether the functional nature of the operation is to connect the provinces."

With one bullet left to fire back, CFF, appealed to the Supreme Court, which heard the case late last month and continues to deliberate.


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