U.S. Sen. Kevin Cramer, R-N.D., is urging Canadian Prime Minister Justin Trudeau to intervene and prevent a strike at Canadian Pacific, according to a Tuesday letter.
Cramer said a strike by members of the Teamsters Canada Rail Conference working at CP (NYSE: CP) would have a “profound impact” on Canadian-American freight movements, particularly fertilizer shipments and Gulf Coast-bound Alberta heavy crude.
“Canada is the United States’ largest trading partner. At a time when supply chains are already constrained, shutting down North America’s essential rail supply chain would create a freight capacity crisis,” Cramer wrote. “The Canadian and US economies are facing significant headwinds as we recover from the COVID-19 pandemic. Constricting the supply and transportation of goods will only compound the challenges before us.”
Teamsters members have voted to authorize a strike should negotiations between the union and CP fail to produce a new labor agreement. The last four-year labor agreement expired on Dec. 31. The union has said the main points of contention include wages, benefits and pensions, while CP says it has offered a two-year collective agreement that includes wage increases and agrees to 20 union demands on benefits and work rules.
The potential strike would affect more than 3,000 locomotive engineers, conductors, trainpersons and yardpersons working at CP.
Cramer cited CP’s role in hauling key commodities to the U.S. and said a work stoppage would exacerbate existing supply chain issues and add to already high costs for fuel and food. The U.S. relies on CP to haul Canadian heavy crude to the U.S. Gulf Coast, American farmers rely on CP to deliver potash and nitrogen fertilizer, and producers rely on CP to move products to the Pacific Northwest for export to Asian markets, Cramer said.
Should Trudeau and his cabinet be unable to prevent service disruptions, Cramer urged Parliament and other government officials to “act swiftly to end the disruption quickly to avoid further harm to our respective economies.”
Meanwhile, Canadian trade groups representing commodities such as fertilizer and agricultural products also expressed concern about how a work stoppage could reverberate throughout the supply chain.
“The agricultural sector is already experiencing supply challenges compounded by the war in Ukraine and cannot withstand any more disruption to the supply chain without severe consequences for farmers, food security in Canada and worldwide, and the Canadian economy,” Fertilizer Canada President and CEO Karen Proud said on Friday.
A work stoppage could also spur fertilizer producers to restrict production, the group said.
The Canadian Manufacturing Coalition, a 16-member organization of trade groups for automotive products, cement and other manufacturers said a strike would “deal another blow” to Canada’s reputation as a reliable supply chain partner. The group urged federal involvement should the sides reach an impasse.
“Given the many disruptions of the past year and the ongoing supply chain crisis, our industry cannot afford another major transportation network interruption,” the group said.