CN strike starting to sting; Plants closing over rail disruption

TORONTO — Several large manufactures and shippers — from auto makers in Ontario to lumber mills in B.C. — have shut down facilities because of service disruptions and delays with CN Rail.

Despite statements by CN earlier this week that managers in place of 2,800 striking conductors and yard-service employees were keeping freight moving close to “normal,” several large shippers have had to halt operations in parts of the country because they’re not getting vital materials and equipment normally carried by rail.

As a result, Ford Motor Co. has closed its assembly plant in St. Thomas, Ont. A source told TodaysTrucking.com the vehicle maker is mulling over closing additional operations if the weeklong strike isn’t resolved soon.

Contained: CN finds out next week whether
the CIRB agrees the strike is illegal

Lumber producer Canfor Corp. announced cuts to three mills in B.C. yesterday. The company blamed market conditions and the strike for the production reductions.

The Canadian Chemical Producers’ Association said today the strike is devastating members’ businesses. “At a time when the manufacturing industry is hurting, we are seeing a dramatic impact on producers, customers, employees, consumers and communities that can be prevented by the government,” Chairman Larry MacDonald said in a news release.

The CN workers walked off the job last weekend after the company dismissed wage demands by the United Transportation Union as being excessive and out of line with recent collective agreements the company reached with other unions.

Ford is arguably the car company that relies most on steady CN rail transport. Chrysler, says Canadian Manufacturers & Exporters chief economist Jayson Meyers, is less dependant on CN today after experiencing major disruptions in the last strike in 2004.

A Ford spokesman says the company and suppliers are looking to transfer as much freight as possible to trucks. However, at least in the case of the St. Thomas plant, there aren’t many alternate options — other than perhaps a few heavy haul fleets — in getting auto frames to the plant.

The issue, then, has little to do with the lack of excess highway capacity in trucking, Meyers told TodaysTrucking.com. “The issue for (Ford) is they can’t get delivery of auto frames, which is what they depend on CN for. And that’s not something you can easily transfer to (linehaul) trucks.”

Off Track: CN rail lines aren’t flowing as smoothly
as earlier in the week. Shippers are getting fed up

A couple parts carriers along Ontario’s Hwy 401 corridor privately said they’re worried that with a shortage of frames and other large components normally sent via tracks, plants will continue curtailing assembly lines and turning away their shipments.

Where exactly truckers will find the extra storage capacity in that event is another looming question, one carrier says.

“The big concern is that closures in Canadian operations affect the entire supply chain,” says Meyers. “People have been looking at the volume of their freight carried by CN, but that just scratches the surface because you have to look at what all the supply chain impacts are.”

As for the west, Meyers says bulk cargo and container freight out of Pacific ports also isn’t moving well. “On the commodities side, bulk isn’t all that easily trucked either — especially in Western Canada where everyone is working flat out anyway.

Meanwile, intermodal truckers who partner with rail are biting their nails
hoping that the slowdown doesn’t impede traffic across country any more than it already has. Rob McDonald, president of APPS Transport of Brampton, tells us that most of his containers are reaching their destination, but they’re “about 30 or 40 units behind” by the end of the first week.

“It’s definitely a problem,” McDonald says. “I know some people are looking at alternative methods of shipping but it’s not very cost effective.”

The railway — which filed a complaint with the Canada Industrial Relations Board that the strike is illegal — said this week it offered to restart bargaining but the union rejected the idea.

The CIRB postponed the hearing until this upcoming Monday, Feb. 19. CN claims the strike is illegal because Canadian union leaders ordered workers to walk off the job without the authorization of United Transportation Union International in the U.S. — the certified bargaining agent for the CN workers.

The union’s chief negotiator Rex Beatty says the Canadian locals are within the law to walk out even without head office’s approval.