Strike threatens rail rebound

TORONTO — Well, this is one way to boost truck freight volumes.

Patches of container truckers across the country might be the select few who aren’t complaining too hard that CN Railway locomotive engineers hit the bricks this past weekend.

In a depressed freight economy, truckers will take the extra loads anyway they can get them and a few carriers are positioned to take on the additional capacity. Although, in certain regions around the Great Lakes and along the St. Lawrence Seaway, some will likely have to compete with short sea transporters who are also developing strategies to get whatever short-haul business shippers put up for grabs. 

On Saturday, The Teamsters Canada Rail Conference led about 1,700 engineers on strike. The workers are protesting what they say are proposals for increased on-duty mileage with only a 1.5-per-cent raise and unsatisfactory health benefits.

According to the railway, though, the locomotive engineers make over $100,000 a year for working an average of 15 to 17 days a month.

The railway says that it has repeatedly offered, and the union has refused, to submit the contract disagreements to binding arbitration in order to avoid a labor disruption. In a statement, CN says managers are doing their best to keep the trains on schedule during the strike. 

CN managers will try and keep freight trains moving, but
winter weather could pose problems if the strike is prolonged.

Without overstating the point, Ontario Trucking Association President David Bradley says that a few truckers could take immediate advantage of the threat of a prolonged rail strike.

"Carriers’ number one priority is to their existing customers, so these (rail) strikes are never a boon for truckers," he says. "However, given the current (capacity) slackness, this strike — depending on how long it lasts — might provide some additional freight for some carriers in the short-term. But keep in mind that truck and rail are essentially different businesses, hauling different freight."

The strike couldn’t have come at a worse time for the railway industry, which market analysts have been predicting would rebound the quickest of all the freight modes in an economy poised for recovery. 

Some commodities seemed to be picking up steam in recent months. Car loadings rose modestly in November by 1.5 percent year-over-year — not a huge leap, but at least the bleeding from the summer (down as much as 35 percent in July) had stopped.

Speaking to The Globe & Mail, Joe Martin, of the University of Toronto’s Rotman School of Management, said this strike could be more damaging than a 15-day stoppage in 2007 because of the fragile economic climate right now.

Later that same year, the TCRC led 3,200 workers on a three-week national strike at Canadian Pacific Rail

But Labor Minister Rona Ambrose will try to ensure the labor conflict doesn’t extend that long this time around. According to reports, she is expected to put back-to-work legislation before the House of Commons today.

Her measure will reportedly include a requirement that the issues be put to binding arbitration.

Canadian shippers have long been concerned that Canada’s reputation as a robust exporter could be damaged if strikes continue to hamper the nation’s railroad systems and ports


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