With a looming strike, rail transport in Canada should be considered essential

Recently, the Teamsters Canada Rail Conference, the union representing both CN and CPKC rail workers, voted to reauthorize a strike and said it would end the strike at the next opportunity.

Also read: How a Canadian rail strike could impact freight markets

Having worked in the customs and logistics industry during the Canadian rail strikes of 2012, 2015 and 2019, I have seen firsthand the devastating and far-reaching impacts of such actions on our economy. Previous rail strikes have crippled the Canadian supply chain and brought the movement of goods to a halt, and so far they have only affected one Canadian railroad, not both.

Many people don’t realize how much we rely on Canada’s railways to move goods from one place to another. In fact, when a major rail line stops operating, there aren’t enough trucks or drivers to handle the excess of goods being imported and exported.

In my opinion, rail in Canada should be considered an essential service. If past strikes dictate what to do, the Canadian government will eventually step in, but in the past, this has only happened after the damage to our economy was already done. I think there is an opportunity for the government to step in and facilitate these conversations sooner in the hope of avoiding these types of situations where ultimately businesses and consumers pay the price.

Even a one-week strike can cause six weeks of chaos because there is a huge backlog of goods that need to be shipped. If we don’t have access to the rail network, trucks and shipyards are full, causing logistical chaos. The added pressure on supply chains leads to astronomically high prices that are ultimately passed on to the consumer.

If we have learned anything from COVID and previous rail strikes, it is that it is time to expand our infrastructure in Canada to improve trade routes between Canada, the United States and Mexico.

When I think about the movement of goods between CUSMA countries, the volume is continuously increasing. If a strike can bring supply chains to a complete halt, it is time to look at ways in which we can create more resilient systems.

For example, there is an opportunity to create more cohesion between our trucking, shipping and rail systems. Currently, our supply chain in Canada is quite disjointed. If industries were better aligned on data sharing, for example, we could create more efficiencies for businesses and consumers.

For now, we can only hope that the likely rail workers’ strike in mid-July does not last long. In the meantime, companies must do everything they can to prepare for both short and long-term scenarios. This may include stockpiling essential supplies and finding alternative trade routes.

It is important to stay up to date with negotiations now and have clear communication channels with your customers and partners about the impact and any changes a potential strike could have on your operations and pricing.

The looming threat of a rail strike by the Teamsters Canada Rail Conference underscores the urgent need to rethink the categorization of rail transportation in Canada. If rail service is suspended, the resulting bottleneck will impact the economy and ultimately impose higher costs on businesses and consumers.

Designating rail as an essential service is a necessary step to protect our economy from future disruption. We must also use this opportunity to strengthen our infrastructure and improve coordination between the rail, trucking and shipping sectors to create a more resilient supply chain.

As we prepare for a possible strike, the stakes are high and proactive measures are essential to mitigate the impact on our economy now and in the future.

Michael Chisholm is an experienced leader in the logistics and customs brokerage industry. He is President and CEO of A & A Customs Broker and Global Logistics.