Strike at Canadian Pacific has 'no lingering effects' on rail operations

Canadian train passing through mountains

July 24, 2018 - Canadian Pacific Railway (CP) has seen "no lingering effects" from a 36-hour strike that halted operations in late May, John Brooks, senior vice president and chief marketing officer of the railway, said on an earnings call.

Members of the Teamsters Canada Rail Conference (TCRC) ratified a four-year agreement with CP last week, the Canadian Broadcasting Corporation reported. The union represents 3,000 CP conductors and engineers, and 64.7% voted in favor of ratifying the contract. 

Keith Creel, President and CEO of CP, said he is "confident and optimistic" the contracts ratified with labor unions " set this company up well with labor stability."

For CP, labor strikes earlier this year may have been in a blessing in disguise. The strikes were short-lived — lasting just 36 hours and creating minimal disruptions to shipments — and ultimately led to the recent labor agreement.

In slides presented with the railway's earnings call, Creel listed labor agreements as a highlight of the second quarter, and said they provide "win-win solutions."

The strikes drove CP and two labor unions — the International Brotherhood of Electrical Workers (IBEW), which represents about 360 employees operating signal systems at CP, and TCRC — to the bargaining table, where they quickly reached tentative agreements.

Both unions ratified the deals this summer. "It is a very significant step in this company's transformation toward a renewed positive relationship growing forward together with the TCRC as well as the IBEW," Creel said.

The four-year agreement with TCRC and three-year agreement with IBEW reduce the likelihood of another strike in the near future, creating stability going forward for CP and shippers using the railway. 

Any minor impacts of the strikes on CP's revenue growth were largely offset by strong demand for freight. Intermodal is particularly in demand, with shippers willing to leverage multiple freight modes to transport their goods. CP's intermodal revenue was up 8% in the second quarter. 

"With truck capacity continuing to tighten and the anticipation of a strong fall peak, we expect both our international and domestic Intermodal to perform quite well for the remainder of the year," Brooks said.

Source: Supply Chain Dive