Inside Logistics

CP begins to move cargo again

Intermodal terminals opened this morning


June 1, 2012
by Carolyn Gruske

OTTAWA: The strike at CP has been put to an end.

Yesterday the Restoring Rail Service Bill, meant to send striking Teamsters Canada Rail Conference members away from the picket-lines and back to their jobs, was passed by the Senate and given Royal Assent by the Governor General.

Once that happened, CP Rail began to get operations running and cargo moving.

The company’s intermodal terminals in resumed their normal schedules and operations as of 7:00 AM EDT.

According to CP, the embargo for shipments routing to and from CP locations has been rescinded. Any previously billed shipments that were placed under embargo still exist and there is no need to rebill them. Today’s new shipments should now be billed with the standard information necessary to ensure they can be moved.

Although the company is proclaiming it is once again operating under normal schedules and operations, it will take some time to ramp up to pre-strike levels. How much time, however, is a matter of debate.

Speaking before the Senate yesterday, Mike Franczak, CP’s vice-president and chief operations said, “it will take approximately two to three days of full operation to begin to restore service and volume levels to their pre-strike levels.”

When questioned by Senator Pamela Wallin, about losses due to the strike, he admitted that some contracts may be gone for good.

“Clearly, some business has gone over to CN during this work stoppage. We will not see that business back on our lines. There is, however, to your point, grain in inland terminals, and containers in ports in Vancouver and Montreal, for example, that are waiting to be moved. Honda is full in terms of the number of vehicles they have on the ground representing several days of production. All of that will have to be worked off and moved in the coming weeks.”

In contrast, Lisa Raitt, the federal minister of labour who originally introduced the Bill in the House of Commons, said the timeline for resuming normal operations is going to be much longer than the one projected by CP.

“This strike is preventing our ability to keep our products moving and is undermining Canada’s reputation as a reliable place to do business. To give you an example, right now in the Port of Vancouver, there are six ships waiting to be filled with grain to be transported overseas, and there are eight more on the way. It takes half a day to load a ship. We have lost nine days of loading. Even when the trains do start rolling, it will take weeks for the backlog to clear; and customers do not forget this. This is a setback from which it could take years to recover lost business and lost investments.”

Raitt said the legislation was needed, not just by the grain industry, but by all Canadian industries.

“Freight rail remains indispensable to our economy. It is not just important to the 15,000 people who work for CP Rail; it is also clearly vital to farmers, miners, forestry workers, factory workers and others who depend on the rail to help move their products across the continent and beyond and to those whose jobs are linked indirectly to the rail industry. Every day that this work stoppage drags on translates into job losses. With no trains running, the implications of this work stoppage are widespread. In addition to affecting farmers, miners and forestry workers, it is also impacting the auto sector. Auto parts are the third largest container import good that comes through the Port of Vancouver. They also come in through the Port of Montreal. This work stoppage is halting the shipment of these parts to manufacturers in Ontario, and without these parts assembly lines will slow down or stop, resulting in lost production and layoffs.

“My colleagues and I had an opportunity to speak with principals in the auto industry two evenings ago. They made it very clear to us that they are facing the decision to close plants in the areas of Cambridge and Woodstock should we not move forward on this back-to-work legislation. Not only in the auto sector…CP Rail is a vital link in moving freight to and from Canada’s West Coast ports, which are an important part of the Asia-Pacific Gateway.”

Despite the government’s assertion that the back-to-work legislation was vital to Canada’s economic well-being, there was much criticism leveled at the government for interfering in the collective bargaining process. Raitt also addressed that issue during her testimony.

“We have been accused of misusing our powers and undermining the right to collective bargaining. We have been told that we are moving too quickly, and, finally, it has been suggested that the problem is not serious enough to warrant back-to-work legislation.

“However, none of these objections holds water. Since 1950, the Government of Canada has consistently intervened with back-to-work legislation in the railway industry. Our actions today follow the time-honoured footsteps of many previous governments, governments that were equally concerned with shutting down all or part of the rail system.

“I have been asked if I think this government is undermining the collective bargaining process many times in the past nine days, and frankly, the answer is no.”

There will be an interest-based binding arbitration process, explained Raitt.

“What will happen is that the parties will go in and have an opportunity to make their best pitch, for lack of a better word. They will be able to negotiate at the table what they have in an agreement. They are ultimately leaving their future collective agreement in the hands of an arbitrator to pick some of one and some of another and cobble it together based upon the principles of arbitration and gradualism and the attempt to duplicate what would have happened had the strike gone on for a number of weeks. That is why the legislation is drafted as it is, to allow them to conclude it in the fairest way they can.”

Even though the union would have preferred not to have been legislated back-to-work, Phil Benson, lobbyist for the Teamsters, was accepting.

“Our preference is always to negotiate a collective agreement directly with our employer. At the end of the day, this is the process the government will give us. It is as fair a process as we will see, and we can only determine what the outcome will be after the arbitration is held to see what the results are.”