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INTERMODAL: Union gives strike notice after CN Rail lays off 1,600 employees

PortandTerminal.com, November 19, 2019

MONTREAL, QUEBEC – More than 3,000 Canadian National Railway Co. train operators went on strike just past midnight on Tuesday morning, shutting down Canada’s largest rail network.

The move to strike comes after CN announced last week it’s intention to layoff 1,600 workers due to a weak economy and ongoing trade tensions.

Canada’s Globe & Mail newspaper is reporting that CN has been winding down operations ahead of the possible strike, a safety measure taken to avoid leaving loaded trains in storage or on tracks. The railway stopped picking up some hazardous goods and interchange cars from other railways in the past couple of days, according to an internal memo.

The workers, represented by Teamsters Canada Rail Conference, and CN failed to reach an agreement on a new contract after several months of mediated talks, the union said.

Conductors and railyard operators at Canada’s largest railway walked off the job after failing to reach an agreement with the company over issues including working conditions and drug benefits, the Teamsters Canada Rail Conference union said.

“Unfortunately, we were unable to reach a deal with CN,” the union said in a statement. Workers have been without a contract since July and served a strike notice on Saturday.

CN Rail is one of two main rail networks that Canada uses to ship consumer goods and exports of canola, wheat, potash and other resources from the prairies to seaports. The company carries C$250 billion ($189 billion) worth of goods annually and has increasingly been moving into shipping oil amid a bottleneck of pipelines from Alberta’s oil sands.

A representative for the Montreal-based company declined to immediately comment on the strike. On Saturday, it said it continued to negotiate in good faith and had offered to go to binding arbitration, which the union rejected.

Managers may step in to operate trains, blunting the impact of any walkout. Allison Landry, an analyst with Credit Suisse Group AG, said a walkout may crimp CN’s cargo volume, the labor action likely wouldn’t last long and the impact on the company’s earnings wouldn’t be meaningful.

“Historically, rail strikes have lasted a few days, and the Canadian government has been quick to step in and implement back-to-work legislation given the significant threat to the economy,” Landry said in a note to clients.

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