Already stretched B.C. supply chain to be impacted if CP Rail locks out workers

Experts in B.C. are warning that if the CP Rail labour disruptions occur, the already-stretched supply chain could lead to higher costs.

On Wednesday, Calgary-based Canadian Pacific Railway Ltd. said it issued a 72-hour notice to the Teamsters Canada Rail Conference of its plan to lock out employees at 12:01 eastern time on Sunday if the union and the company are unable to come to a negotiated settlement or agree to binding arbitration.

Close to 3,000 Canadian Pacific Railway Ltd. employees could be off the job early Sunday morning.

With the majority of goods in Canada shipped by rail, logistics expert and professor emeritus at UBC, Garland Chow, explains the strained supply chain is “just going to get worse.”

“The supply chain is already congested and backed up. Whether it be for container traffic, or for many of the bulk commodities, which are being exported, such as grain … fertilizer, and minerals,” he said.

If farmers have trouble getting access to fertilizer it could be especially impactful during the crucial spring seeding season.

While British Columbians may be starting to get used to paying more for things, if a CP Rail labour disruption happens, that could affect our ability to even get certain goods, explains Craig Patterson, editor in chief of Retail Insider.

“Necessities right now are certainly something that we don’t want to see a limitation of. And I think that could be a challenge whether or not that’s medication or food or items that people actually really do need for everyday life.”

Related Articles: 

• Possible CP Rail strike could spell disaster for some small businesses: CFIB

• Canadian Pacific Railway issues 72 hour lockout notice on Teamsters Canada

• Industry groups call for federal government to stop potential CP Rail work stoppage

Patterson adds for those with dietary restrictions, items could be quite limited he adds.

And for retailers who don’t already have the means to deal the current challenges of the pandemic or Russian-Ukrainian crisis, Patterson predicts larger companies will trump them.

“The bigger [companies] are going to win just because they’ve got more money and resources to do it and smaller retailers could suffer as a result.”

No matter how short or long the strike takes place, Chow insists the province will see consequences either which way.

Rail is used to send a lot of raw materials out of the country, but it’s also used to transport a lot of goods when they arrive from overseas. Chow explains, some people may not realize it but “Trains move more than the trucks in terms of raw tonnage.”

“We as consumers, we see lots of trucks because they’re in the city. So we think that they’re moving everything, and indeed, they touch everything trucks do, but rail does as well for many of the products. So this is very significant, particularly because of what sectors are in. For example, in certain sectors such as agriculture, and mining and resources. Rail is the primary mover, and that includes petroleum as well.”

A slew of Canadian business organizations have called on the federal government to prevent a potential work stoppage at the CP Rail.

Roughly 45 industry groups say in a statement that any disruption would hamper Canada’s freight capacity and have a profound effect on the broader economy as it recovers from the COVID-19 pandemic.

The groups behind the statement include the Retail Council of Canada, the Canadian Chamber of Commerce, the Canadian Manufacturers and Exporters and the Business Council of Canada.