Finance Minister Chrystia Freeland’s budget, released Tuesday, laid out a list of investments to “further strengthen Canada’s transportation systems and supply chain infrastructure.”

A non-financial line item in that envelope calls for the government to introduce amendments to the Canada Transportation Act for a “temporary extension, on a pilot basis” of the interswitching limit in the Prairie provinces, to “strengthen rail competition.”

Interswitching rules commit one rail carrier to pick up cars from a shipper, then deliver them to another railway for the line haul. Federal rules generally allow grain elevators and other shippers to use interswitching for up to a 30-km radius.

Expanding that maximum radius, the feds said Tuesday, “would support competition among rail carriers by enabling rail companies to access tracks owned by another rail provider within the limit, under rates regulated by the Canadian Transportation Agency.”

The previous Conservative government set up a temporary extension of the interswitching radius, to 160 km, in 2014, to the acclaim of several crop commodity groups — but that extension was sunsetted in 2016.

The Railway Association of Canada said Wednesday the 2014 extension was allowed to lapse “based on results from a previous pilot and recommendations contained in an independent study” — a reference to a 2015 review of the Canada Transportation Act.

The RAC, which represents almost 60 railways in Canada including Canadian National and Canadian Pacific railways (CN, CP), ripped the current Liberal government’s proposal as a resurrection of a “failed policy” that was “misguided and harmful to Canada’s supply chains.”

“This policy will cause Canadians to pay more for virtually everything that moves by rail,” RAC CEO Marc Brazeau said Wednesday in a release, warning the policy “will incentivize congestion in our supply chains while disincentivizing private investment.”

“This pilot has been done before,” the RAC said, listing the impacts of “switching cargo multiple times” as slowing the movement of goods by one to two days, adding to greenhouse gas emissions and adding costs.

“The measures announced today will not improve the efficiency, capacity or reliability of Canada’s supply chains. They will do the exact opposite, as we saw under extended regulated interswitching that was in place from 2014 to 2016,” Brazeau said.

However, supporters of the 2014 extension estimated in 2016 that about 150 grain elevators on the Prairies were able to make use of interswitching with the 160-km radius, up from just 14 elevators previously.

One such supporter, Pulse Canada, in 2016 said freight rates were reduced on some routings, and that grain shippers were afforded more leverage in getting rail car capacity where needed, both as a result of the extended interswitching radius.

Gordon Bacon, Pulse Canada’s then-CEO, speaking in favour of extended interswitching in 2016, said that “in cases where railways have lost business due to competition, they are actively campaigning to get it back by offering rate reductions and improved levels of service.”

‘Down payment’

The RAC on Wednesday also panned another non-financial proposal from Tuesday’s budget — namely, for legislation that would ban the use of temporary replacement workers in federally regulated workplaces affected by work stoppages.

The RAC said a ban on replacement workers would mean rail service “will be disrupted more frequently,” strikes “will be more common and will last longer” and federal back-to-work legislation “will be required more often.”

Tuesday’s budget also earmarks $27.2 million over five years starting in 2023-24 for Transport Canada to establish a “Transportation Supply Chain Office.”

That office, the budget said, would “work with industry and other orders of government to respond to disruptions and better co-ordinate action to increase the capacity, efficiency, and reliability of Canada’s transportation supply chain infrastructure.”

The budget noted the measures announced Tuesday “are a down payment on Canada’s National Supply Chain Strategy,” which the government said “will be released in the coming months and will be informed by the recommendations of the National Supply Chain Task Force report.” — Glacier FarmMedia Network

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CN recently announced a record-setting February in which it moved more than 2.4 million tonnes of grain from Western Canada that month. CP had similar reasons to boast, moving 2.3 million tonnes of grain and grain products in January, nearly double what it managed in January 2022.

“This year so far it’s been running smoothly overall. There’s been a few delays; I had to wait a week (to make a grain shipment). I can live with that as a farmer,” said Dave Bishop, director at large with the Alberta Wheat Commission.

Although some might argue that a relatively mild winter is largely responsible, Bishop is willing to give credit where credit is due.

“I know the railway gets blamed for a lot of stuff, and they rightfully should because they do have a lot of issues, but it’s not always their fault,” he said.

“There’s lots of issues at the port that backlog everything down the supply line. If it’s raining in Vancouver you can’t load a vessel. If there’s some issues with some ships getting in, they can’t load the vessels.”

Shane Strydhorst, zone three director with Alberta Pulse Growers, also gave the railway companies a tip of the hat for keeping pulses moving this winter.

“I’ve talked to a number of different farmers in the province and I think everyone is pretty happy with the movement we’ve had this winter.

“It’s been a great improvement. We had a much larger crop last year than the year before. We needed a lot better movement and we certainly got much better movement this crop year than what we got in the 2021-22 crop year. A great deal of tonnage has been moved and it’s been on time and in some cases early, which has made a lot of people very happy.”

Strydhorst believes the railway companies are taking producer criticisms to heart and are making efforts to improve their services.

“That, coupled with generally fairly good weather throughout the winter, has allowed for a lot better movement,” he said.

Better communication

Communication between farmers and the railways has also improved, said Bishop, who serves on CN’s ag advisory council, comprised of Prairie producers who express concerns and how they can be addressed.

“We sit down and help them with the grain plan to some extent, reviewing it and writing it up. They have conversations with us and ask our opinions on things. So the communication over the last few years, especially with CN, has been a lot better. Before, we used to know nothing. There was no communication,” he said.

“CP is not as good at communicating as CN, but they are better than they used to be. So I think you’re seeing a lot more of this communication happening back and forth. That’s very encouraging.”

CN acknowledged this new era of co-operation in a March news release, noting increased collaboration between supply chain partners that has enabled strong performance through operational challenges, including periods of extreme cold.

“Improved communications between CN, our customers and supply chain partners have made our grain supply chain a success in February,” said Sandra Ellis, vice-president, bulk with Rail Centric Supply Chain, CN.

“When each of us has a better understanding of what our partners are dealing with, we can adjust our individual operations to work through disruptions when they occur.”

More hoppers

Some systemic issues remain, said Strydhorst.

“Quite often the demand for cars isn’t being met, which of course leads to shipping delays and some inefficiencies and increased costs for everyone.”

This is a matter CP is working on, said Jean Hardy, vice-president of sales and marketing, grains and fertilizers, in a release.

“We have invested more than $500 million in new high-capacity hopper cars and we are working with our customers to boost supply chain capacity.”

A bigger problem from a pulse perspective is the cost of shipping containers. Thirty to 40 per cent of pulse crops are shipped in these, said Strydhorst, with green lentils and chickpeas almost exclusively shipped this way.

“Container shipping is still quite expensive and has been quite inconsistent over the winter,” he said. “I think it’s improved a little bit since November and December but there’s still quite a bit of inconsistency there, which is a struggle.”

Although not a railroad responsibility, holdups at the Port of Vancouver continue to be a headache for producers seeking timely delivery of their products.

“One thing I’ve heard this winter more than in the past is about rain causing delays for loading ships,” said Strydhorst.

“That’s something I hope will be addressed; upgrading our ports to have more consistent loading because if we can’t deliver our product consistently and reliably, it’s just one more risk for our system.”

One boon to farmers in recent years has been the advent of high-throughput terminals equipped with loop tracks such as those developed by G3 and others.

“You can take a whole unit train going to one location, fill it and leave, whereas with other elevators ,they drop cars off, pick some up and drop some off. It takes time to do,” said Bishop.

“These circle tracks on these new inland terminals are way more efficient.”

But they’re not a magic bullet for the industry’s transportation woes. They’re expensive and many conventional grain terminals can’t adapt to the loop tracks, he said.

“The only way you’re going to get one is if you’re building a new one, basically because most of the (elevators) don’t have the room to put in a circle track.”

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The board, which oversees U.S. freight railroads, is imposing some requirements on the deal, which was agreed in 2021, including an “unprecedented seven-year oversight period along with extensive data-reporting requirements.”

The acquisition, which combines the sixth- and seventh-largest railroads operating in the U.S. by revenue, will create the first railroad providing a single-line service spanning Canada, the U.S. and Mexico. It is projected to add 800 new unionized operational jobs in the U.S. and will shorten the average length of trains by just under 20 per cent.

CP CEO Keith Creel said in a statement that the board’s decision “clearly recognizes the many benefits of this historic combination. As the STB found, it will stimulate new competition, create jobs, lead to new investment in our rail network, and drive economic growth.”

In the same statement, Kansas City Southern said the decision “is the catalyst for realizing the benefits of a North American railroad for all of our stakeholders.”

The decision is effective on April 14 and calls for reconsideration petitions to be filed by April 4. Calgary-based CP’s TSX-traded shares rose about six per cent to C$105.74. Kansas City Southern shares were transferred to a trust and the railroad has operated independently ahead of the board decision.

The STB said it expects the new single-line service will foster the growth of rail traffic and reduce emissions by shifting approximately 64,000 truckloads annually from North American roads to rail.

It also concluded that the deal will not increase safety risks in any meaningful way, an issue that has been raised in the wake of a recent Norfolk Southern derailment in Ohio. It noted CP has had the best safety record of any large railroad over the last 15 years.

The STB also approved measures to address “potential environmental impacts of the transaction, such as increased noise,” and it will require the railroad to justify “rate increases over a certain level” on some interline movements.

The deal will also foster new U.S. passenger railroad Amtrak service opportunities, the board said.

The new direct service will facilitate the flow of grain from the U.S. Midwest to the Gulf Coast and Mexico, the movement of intermodal goods between Dallas and Chicago and trade in automotive parts, vehicles, and other goods between the U.S. and Mexico, the STB said.

The board can issue orders to enforce required environmental mitigation measures and address capacity and maintain fluidity in Houston, Chicago and other congested areas, “including preventing potential merger-caused delays and service disruptions of commuter service in the Chicago area.”

This transaction is “end-to-end,” which means there are little to no track redundancies or overlapping routes, and the board said the move will reduce travel time for traffic moving over the single-line service.

At least two U.S. grain grower groups on Wednesday panned the STB’s decision, saying the combination would decrease competition for the rail-reliant grain sector.

“U.S. rail industry consolidation has led to poorer, not improved, service for agricultural shippers,” Vince Peterson, president of U.S. Wheat Associates, said in a release.

“In addition, we see extreme disparity in rates for wheat shippers. Rail rates over the last decade have increased exponentially and rates for wheat are higher than rates for other commodities even with similar handling characteristics.”

The U.S. National Association of Wheat Growers’ (NAWG) CEO, Chandler Goude, said in the same release that the group “maintains our concerns that the merger of CP and KCS will impede competition in the rail market and increase rail rates.”

— David Shepardson reports on the U.S. transport sector for Reuters from Washington. Includes files from Glacier FarmMedia Network staff.

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Canadian Pacific Railway and Canadian National Railway (CP, CN) have been doing good jobs during the 2022-23 marketing year in moving grain, he said.

“They have benefitted by one of those years where they’re really enjoying a calamity-free year. We don’t have floods. We don’t have blockades. We don’t have massive derailments. We’ve had a reasonably mild winter,” he said.

At 2.29 million tonnes, CP set a new January record for grain movement, according to a press statement recently issued by the company. CP said it has transported more than 15 million tonnes of grain and grain products so far during the marketing year.

“CP’s grain performance through January demonstrates the strength of our customers’ supply chains, and the strong resiliency of our railway operations and effective winter planning, allowing CP to deliver for our customers,” Joan Hardy, CP’s vice-president, sales and marketing, grain and fertilizers said.

“CP, our customers and other supply chain participants were able to ship nearly double the volume of grain and grain products compared to January 2022, despite slowed grain vessel loading because of rain in Vancouver, holiday closures and periods of extreme winter operating conditions.”

Hemmes pointed to a few days in which rain along the West Coast hampered grain movement. Hardy cited the same issue and called on the federal government and industry to upgrade grain facilities at the Port of Vancouver.

Wade Sobkowich of the Western Grain Elevator Association (WGEA) also commented on CP’s record January.

“It’s a supply chain achievement. It’s always a good thing when the railways talk of how well they’ve done,” he said.

“The thing to keep in mind is it’s one thing to measure yourself on absolute volumes, based on how well you have done in the past. The other dimension to performance is measuring yourself against demand,” Sobkowich said, stressing it’s important to compare the amount of grain moved to the amount demanded from customers.

“We’ve seen CP in the 70 to 80 per cent car fulfillment, which is a satisfactory number,” he noted, pointing to the recent cold spate across the Prairies, which he said very likely slowed producer deliveries of grain, operations at grain elevators and rail movement throughout the region.

The Canadian Grain Commission reported that halfway through the 2022-23 crop year that producer deliveries of 34.02 million tonnes of all grains were up almost 33 per cent compared to a year ago. Also, terminal receipts of 28.91 million tonnes increased by 35.7 per cent. As well, total exports jumped 45.4 per cent at just under 24.90 million tonnes.

CN hasn’t released Canadian grain traffic data for January. In its year-end financials on Jan. 24, it mentioned relatively higher volumes of Canadian grain in its fourth quarter ending Dec. 31. CN also noted “significantly lower” export volumes of Canadian grain during the first half of calendar 2022 had partly offset its increased coal and U.S. grain traffic.

CN, in its Q4 results released Jan. 31, reported moving 192,000 carloads in its combined grain and fertilizers segment during the quarter ending Dec. 31, up 21 per cent from the year-earlier period. By comparison, CP handled 126,700 carloads in its grains segment, up 24.3 per cent from the year-earlier Q4.

— Glen Hallick reports for MarketsFarm from Winnipeg. Includes files from Glacier FarmMedia Network staff.

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The Canadian Transportation Agency, which sets the maximum revenue entitlements (MREs) each crop year for Prairie grain handled by Canadian National Railway (CN) and Canadian Pacific Railway (CP), on Thursday ruled both railways overshot their maximums for the 2021-22 crop year.

The CTA’s determination found CN’s regulated grain revenue came in $3,068,088 above its MRE of $589,140,501 for the crop year, while CP’s came in $2,363,775 above its MRE of $513,144,863.

As per grain handling regulations, those overages must be forfeited in the next 30 days to the Western Grains Research Foundation (WGRF), along with penalties of five per cent ($153,404 for CN, $118,189 for CP) — for a combined payout of $5,703,456.

The CTA’s figures show CN and CP moved a combined 28.4 million tonnes of western grain in 2021-22 crop year — a “notable drop” of 46 per cent from their combined record 52.3 million-tonne handle in 2020-21, “due mainly to the drought conditions experienced in Western Canada during the (2021-22) growing season.”

The CTA’s calculations showed the average lengths of haul for CN and CP in 2021-22 to be 977 miles and 909 miles respectively, for a combined weighted average length of haul of 946 miles, down from 966 in 2020-21.

In 2020-21, by comparison, the CTA had found CN overshot its MRE by almost $2.4 million, while CP came in about $20.25 million below its MRE. Prior to that, both railways overshot their MREs in five of six crop years, except for 2018-19 when grain revenue came in below both railways’ MREs.

The MREs, commonly described as revenue caps, are calculated using a formula factoring in each railway’s annual grain handle and average length of haul along with the volume-related composite price index (VRCPI), an inflation index reflecting the railways’ costs for labour, fuel, materials and capital purchases.

The 2021-22 crop year is the fourth in which CN and CP have separate VRCPIs, following amendments to the Canada Transportation Act in 2018.

CN’s 2021-22 VRCPI was set at 1.4572, up from 1.4441 in 2020-21, while CP’s was set at 1.4826, down from 1.5055.

Those figures were reached after both railways applied for, and received, adjustments to their previously-announced 2021-22 VRCPIs. CP sought an adjustment based on its purchases of 1,400 new hopper cars and CN, for purchasing and leasing 1,075 additional hopper cars — transactions which weren’t accounted for when the VRCPIs were first set.

The WGRF’s research fund, the agreed-upon beneficiary from MRE overages since 2000, is a Saskatoon-based, producer-directed fund that backs crop research to “enhance the profitability and sustainability” of western Canadian grain farmers. — Glacier FarmMedia Network

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The National Carriers’ Conference Committee (NCCC) and the International Brotherhood of Teamsters (BMWED) that represents 11,000 workers extended the current cooling off period that previously was set to expire Nov. 19. The NCCC said the “extension eliminates the threat of a near-term freight rail service disruption.”

A rail shutdown could freeze almost 30 per cent of U.S. cargo shipments by weight, stoke inflation, cost the U.S. economy as much as $2 billion per day and unleash a cascade of transport woes affecting the energy, agriculture, manufacturing, healthcare and retail sectors (all figures US$).

BMWED said without an extension railroads could have begun ceasing rail operations within the next few days in anticipation of a Nov. 20 strike and suggested that “would also represent a blatant attempt to cause panic and economic harm to the railroads’ customers and the U.S. economy right before the Thanksgiving holiday.”

Another union representing about 4,900 locomotive machinists, roadway mechanics and facility maintenance personnel on Saturday narrowly ratified the tentative contract agreement.

The union was the seventh of 12 to approve the deal, while BMWED and the Brotherhood of Railroad Signalmen (BRS) union, representing more than 6,000 members, voted against the deal.

The deal included a 24 per cent compounded wage increase over a five-year period from 2020 through 2024 and five annual $1,000 lump sum payments.

The unions represent 115,000 workers at U.S. railroads including Union Pacific, BNSF, CSX, Norfolk Southern and Kansas City Southern as well as Canadian National Railway’s (CN) track in the U.S..

CSX chief financial officer Sean Pelkey said at a conference the railroad is “optimistic we’ll get to a good solution to be able to pay people much more than what they’re taking home today.”

When the contract is resolved “that really gives us the line of sight to figure out how do we how do we drive a better employee experience,” he added.

— David Shepardson reports on the U.S. transportation sector for Reuters from Washington, D.C.

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The task force’s final report, released Oct. 6, offered up 21 recommendations aimed at easing congestion in Canada’s ports, filling labour shortages and improving employee retention, and protecting corridors, border crossings and gateways from disruption.

Among the report’s short-term recommendations, for example, are a call to expand the 30-kilometre rail interswitch distance across Canada — a move meant to give shippers more options to move goods by rail on one company’s track before switching to another for the longer haul.

Among the longer-term recommendations, meanwhile, are a call to “protect corridors, border crossings and gateways from disruptions to ensure unfettered access for commercial transportation modes and continuity of supply chain movement.”

Among the bullet points tucked into that recommendation is a call for Labour Minister Seamus O’Regan to “urgently convene a council of experts to develop a new collaborative labour relations paradigm that would reduce the likelihood of strikes, threat of strikes, or lockouts that risk the operation or fluidity of the national transportation supply chain.”

On that point, the task force says “employers, unions and government must find creative solutions to avoid disrupting the supply chain” as “even the threat of strikes or lockouts negatively affects the operation of the national transportation supply chain and, in turn, Canada’s reputation as a destination of choice for doing business.”

Transport Minister Omar Alghabra said Oct. 6 the government will now move to develop a National Supply Chain Strategy, which “will be informed by the recommendations included in the task force’s final report.”

Among the organizations responding to the task force report’s release, the Teamsters Union said Oct. 6 it’s “pleased” with the recommendations to help fill vacancies in the transport sector.

“However, and just as importantly, the union is alarmed by the report’s language surrounding the right to strike,” the union said.

“Free collective bargaining is not an impediment to supply chain continuity, but this report suggests otherwise,” Teamsters Canada president Francois Laporte said in a release. “Ultimately, unions and everyday working-class Canadian families are not at the source of the world’s current disruptions. Attacking our rights won’t solve the crisis.”

The union said it believes the government’s responsibility is to “create the environment where workers and employers can negotiate freely, without interference, and in good faith.”

“It is wholly unacceptable for the task force to have considered ‘labour disputes’ as events requiring risk-mitigation strategies, on par with climate-related events,” Unifor national president Lana Payne said separately in a letter to Alghabra.

“Limiting worker power by curtailing the rights of workers to strike would contribute to the erosion of job quality, destabilizing the transportation supply chain further — the opposite of what the task force was set up to accomplish.”

Rather, Unifor said, “decades of industry deregulation combined with other anti-labour activities, such as contract flipping and contracting out, have contributed to the recruitment and retention issues plaguing critical parts of the sector.”

“That such a recommendation should surface through a government-appointed task force — in an advanced, pluralist, progressive democratic nation such as Canada — is incredulous,” Payne said in her letter to Alghabra.

“A stable, secure, and skilled workforce must stand atop the list of priorities for anyone looking to solidify supply chains. Sadly, job quality is noticeably absent from the list of action items in the task force’s final report.”

The last major disruptions caused by rail labour disputes in Canada were an eight-day strike by Teamsters-led conductors and yard workers at Canadian National Railway (CN) in 2019, and a three-day labour outage at Canadian Pacific Railway (CP) in March this year involving the company’s Teamsters-led engineers, conductors and train and yard workers.

CN’s signals and communications workers, led by the International Brotherhood of Electrical Workers (IBEW) System Council 11, also held a 17-day strike this summer but did not actively disrupt CN service during that time.

Among other recommendations to limit supply chain disruptions, the task force report also calls for Canada’s law enforcement agencies and judiciary to be provided with “tools and resources to pre-empt blockades and/or expeditiously remove individuals or objects intending to be used to disrupt nationally critical transportation supply chain infrastructure or operations.” — Glacier FarmMedia Network

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Biden called the deal a “big win for America” and for tens of thousands of rail workers. Thanking business and labour, the Democratic president promised more worker-company agreements in the future.

“I’m optimistic that we can do this in other fields as well,” Biden said.

“Unions and management can work together for the benefit of everyone,” Biden added.

If they accept the deal that was announced at about 5 a.m., workers whose pay had been frozen will win double-digit increases and will be allowed to seek certain types of medical care without fear of being punished, union leaders said. The agreement includes an immediate 14.1 per cent wage rise, the railroads said.

Unions, whose members bitterly rejected prior proposals, will now vote on the agreement. Even if those votes fail, a rail strike that could have happened as soon as a minute past midnight on Friday has been averted for several weeks due to the standard language included in such a deal, a person familiar with the negotiations said.

Biden’s Labor Secretary Marty Walsh hosted contract talks in Washington that ran for 20 consecutive hours between unions representing 115,000 workers and railroads including Union Pacific, BNSF, CSX, Norfolk Southern and Kansas City Southern, as well as U.S. track owned by Canadian National Railway (CN).

Officials are expected to host a news briefing later on Thursday.

Failing to reach a deal before the deadline would have cleared the way for workers to legally strike.

A rail shutdown could have frozen almost 30 per cent of U.S. cargo shipments by weight, stoked inflation, cost the U.S. economy as much as $2 billion per day and unleashed a cascade of transport woes affecting the U.S. energy, agriculture, manufacturing, healthcare and retail sectors (all figures US$).

U.S. natural gas futures dropped about nine per cent after soaring 10 per cent in the prior session; oil futures fell about four per cent to a one-week low. Diesel and gasoline futures also fell. Investors expected that a rail strike would have threatened coal supplies to power plants and boost demand for rival energy sources.

Amtrak, which runs passenger rail, said it will resume normal service on Friday after cancelling long-distance trains in anticipation of a strike.

The impact of a shutdown also would have stretched beyond U.S. borders because trains link the U.S. to Canada and Mexico and provide vital connections to massive ships that ferry goods from around the globe.

Negotiations between the companies and a dozen unions had stretched for more than two years, leading Biden to appoint an emergency board in July to help break the impasse. Biden personally called Walsh and negotiators on Wednesday evening to prod them toward a deal, telling them “once again to recognize the harm” that a shutdown would have on families, farmers and businesses, according to a person aware of the negotiations.

National Retail Federation CEO Matthew Shay thanked Biden’s administration for intervening, adding in a statement that his group is “relieved and cautiously optimistic.” Emily Skor, CEO of the biofuel trade group Growth Energy, also praised the deal and noted that much of the country’s ethanol moves by rail.

Freight railroads had halted transportation of hazardous goods, including chlorine for water purification and ammonia for fertilizer, as well as shipments of refrigerated food and other goods that use rail and at least one other mode of transport. Their goal was to prevent cargo from being stranded in unsafe locations.

Job cuts

The railroad industry slashed almost 30 per cent of its workforce over the last six years, cutting pay and other costs as they increased profits, stock buybacks and dividends for investors. Profits at billionaire Warren Buffett’s Berkshire Hathaway, which owns BNSF, rose 9.2 per cent in the most recent quarter to $1.7 billion.

The number of U.S. railway workers has dropped from over 600,000 in 1970 to about 150,000 in 2022, according to the Bureau of Labor Statistics, due technology and cost-cutting. The result is that many industry workers are on call at all hours, waiting to respond at short notice to work for days at a time.

The latest deal follows some earlier recommendations of the president’s emergency mediators. It includes a 24 per cent percent wage increase over a five-year period from 2020 through 2024 as well as $1,000 lump sum payments in each of five years.

Biden, who has called himself the most union-friendly president in history and attacked companies for raking in “excessive” profits, praised a deal he said would give workers “better pay, improved working conditions, and peace of mind around their health care costs.”

The president is not yet out of the woods when it comes to supply-chain labour issues. Some 22,000 union workers at 29 West Coast ports that handle almost 40 per cent of U.S. imports are also in high-stakes labour contract negotiations.

Administration officials wanted the disputes resolved ahead of November’s midterm elections that will determine whether Biden’s fellow Democrats retain control of Congress.

Senior congressional leaders had threatened to pass legislation imposing a resolution on the railroads and unions if the negotiations were not successful. U.S. House Speaker Nancy Pelosi praised the tentative agreement and said that Congress was “ready to act” but that “thankfully this action may not be necessary.”

— Reporting by Trevor Hunnicutt in Washington; additional reporting by Lisa Baertlein in Los Angeles, Steve Holland, David Shepardson and Susan Heavey in Washington, Stephanie Kelly in New York, and Jahnavi Nidumolu, Aishwarya Nair, Bansari Mayur Kamdar and Kannaki Deka in Bangalore.

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As of Wednesday, three unions out of the 12 representing unionized rail workers in the U.S. have yet to reach tentative agreements with the bargaining group for U.S. rail carriers. A 30-day “cooling off” period between those three unions and the railways ends at 12:01 a.m. Friday.

Just two unions out of the nine that have reached agreements have so far voted to ratify those deals. The results of six ratification votes are pending; a seventh union, the International Association of Machinists, said Wednesday its members have voted to reject the tentative deal it reached Aug. 29.

Canadian National Railway (CN), which owns a significant amount of U.S. track with employees represented by the affected unions, is a party to the U.S. railways’ organization for “multi-employer national bargaining.”

U.S. railways represented by the U.S. National Carriers’ Conference Committee (NCCC) also include BNSF, CSX, Norfolk Southern and Union Pacific — as well as Kansas City Southern, which is still in the midst of a merger with Canadian Pacific Railway (CP).

CP itself, however, is not a party to the NCCC and is not involved in those labour talks.

Thus, if talks between unions and the NCCC-represented railways end in a work stoppage, CP said Tuesday it “will continue to fully operate in Canada as well as in the U.S., subject only to any applicable embargo imposed by any of the U.S. railroads.”

CN, meanwhile, said in a separate statement Monday it had imposed embargoes effective that day on all “rail security-sensitive materials” and “time-sensitive” commodities bound from Canada to the U.S. and Mexico — or bound from origins in the U.S. and Mexico into Canada — and has set up a permit system accordingly.

CN’s intermodal shipments and its “Canada-to-Canada” carload shipments of all commodities will continue to move as usual, the company added.

However, CN said Monday, other freight customers “may also start to experience delayed or suspended service over the course of this week, as the railroads prepare for the possibility that current labour negotiations do not result in a resolution and are forced to substantially reduce operations.”

CP, in its memo to customers Tuesday, said it hasn’t yet launched any such embargoes but is “closely monitoring developments to evaluate any potential impact to shipments on CP’s network.”

However, CP added, embargoes set up by “other railroads” may hinder its ability to move equipment on its own North American network — for example, any traffic that’s interchanged to any of the involved or affected railroads, or traffic that relies on haulage handling or running rights agreements or reciprocal switch service on such railroads.

For CP’s intermodal customers, U.S.-destined traffic from the Port of Montreal and Port Saint John may be impacted, the railway said.

Apart from the lines to be acquired via its deal for Kansas City Southern, CP’s own directly-operated U.S. track reaches Kansas City, Minneapolis, Milwaukee, Chicago, Detroit, Albany and Searsport, Maine.

CN’s directly-owned U.S. track, meanwhile, reaches U.S. destinations including New Orleans, Mobile, Minneapolis, Omaha, Chicago, St. Louis, Pittsburgh and Memphis, among others. — Glacier FarmMedia Network

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The agreement puts a formal lid on the latest round of contract disputes between Calgary-based CP and its 3,000-odd unionized employees represented by the Teamsters Canada Rail Conference (TCRC).

Those disputes peaked in a two-and-a-half-day work stoppage ending March 22, when the company and union agreed to go to binding arbitration to settle sticking points left unresolved in bargaining.

The new agreement, as laid out Monday by arbitrator William Kaplan, runs through to the end of 2023.

It provides wage increases of 3.5 per cent for each of 2022 and 2023, plus increases of three and 2.4 per cent to employees’ maximum disability and annual dental benefits respectively.

Kaplan’s binding decision was announced Monday after mediation on Friday and Saturday and a two-day hearing Sunday and Monday.

The arbitrator’s decision also calls for the TCRC to enter an agreement with CP on a pension improvement account (PIA) by the end of next month; the PIA would cover a six-year period ending Jan. 1, 2024 at the earliest.

The decision also updates the amount of time employees serving as union officials or reps can book for rest after taking leave to attend to union business.

CP CEO Keith Creel said Monday the company “welcomes the conclusion of arbitration and is pleased to have completed this agreement.”

TCRC brass, in a separate memo to its CP membership on Monday, said they would review Kaplan’s decisions and provide comments to local chairpersons and the membership “in the very near future.” — Glacier FarmMedia Network

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