Acting Secretary of Labor Julie Su and Canadian Minister of Labour Steve MacKinnon are in contact about a railroad shutdown north of the U.S. border that is already having far-reaching consequences for the economies of both countries.
“I just spoke with my U.S. counterpart about work stoppages in the rail sector and discussed the importance of the sector and its workplaces to our countries,” MacKinnon wrote in a social media post Thursday morning.
Railway companies Canadian National (CN) and Canadian Pacific Kansas City (CPKC) locked out around 10,000 Teamsters employees Thursday following a breakdown in labor contract negotiations.
The White House National Economic Council (NEC) said Thursday it’s been monitoring the Canadian railway labor situation for a matter of weeks through its supply chain disruption task force.
“This work, involving multiple agencies across the federal government, has included extensive analysis and engagement with industry and other stakeholders to assess and mitigate impacts for U.S. consumers, businesses and workers,” the White House said in a statement sent to The Hill.
The NEC has “been in touch with the parties,” the White House added.
Rail operator CN told The Hill Thursday afternoon that the company remains “at the table, attempting to reach an agreement.”
“While our operations within the U.S. remain unaffected, cross-border trains are safely parked and will be ready to move once operations in Canada resume,” a company spokesperson told The Hill in an email.
The lockout, which is a managerial decision preventing employees from going to work, is distinct from an employee-initiated strike and allows the companies to keep better track of equipment and cargoes spread out over a vast rail network, labor experts told The Hill.
“It’s easier to restart after the work stoppage,” Arthur Wheaton, director of labor studies at the Cornell School of Industrial and Labor Relation’s Buffalo Co-Lab, told The Hill. By taking this approach, he said, management is indicating “they know where all the trains are, so they’re just going to freeze everything in place and turn off the power.”
“If the union had the option of striking, you wouldn’t know what day they’re going to strike, which trains are going to strike, which cities are going to be impacted, and it can create a huge amount of chaos,” he added.
MacKinnon turned down a request from CN and CPKC earlier in the negotiating process to send the contract dispute into binding arbitration, forcing management and the union to reach their own agreement. In August, the Canada Industrial Relations Board determined that the maintenance of “essential” services during a work stoppage was unnecessary.
The work stoppage has U.S. rail companies worried about the extent of its economic impact, since U.S. and Canadian freight rail networks are highly interconnected. A representative for Union Pacific told The Hill in an email that a prolonged shutdown could have a big impact on various industries.
“For Union Pacific, a rail stoppage in Canada would mean thousands of cars per day not moving across the border. Everything from grain and fertilizer during the critical summer season, and lumber for building homes could be impacted. A prolonged shutdown could have even more significant implications,” Union Pacific communications manager Robynn Tysver said.
U.S. railway BNSF said the stoppage would not have an impact on its operations but noted that shipments would not be moving through a Canadian railway exchange during the shutdown.
Representatives for the Canadian Teamsters and CPKC did not immediately respond to a request for comment on the status of negotiations.
Melissa Atkins, a partner at law firm Obermayer who frequently represents management in labor disputes, told the Hill that a brewing East Coast U.S. port strike from longshoremen and port workers could further strain the North American transportation and logistics sector.
“If we have two strikes, with two major modes of transportation for goods and commodities, this could be huge,” she said.
This story was updated at 4:01 p.m.