Rod Nickel

(Reuters) – A possible shutdown days ahead Canadian Pacific Railway Ltd. (NYSE) Railway Ltd. Due to unresolved contractual talks, manufacturers are rushing for autos and chemicals, and preparing to slow down production. Grain handlers request that farmers hold off on crop delivery.

CP Canada, Canada’s 2nd-largest railroad, informed the Teamsters Canada Rail Conference that it would lock out 3,000 conductors, engineers and yard workers on Sunday. This is in spite of any bargaining.

CP claims that the major issue is union demand for greater pension caps. Teamsters, however, have concerns over pay and benefits.

The shippers claim there is no workaround in this vast country, which depends on only two railroads for freight hauling and has an existing shortage of truckers.

Vancouver is Canada’s most important port and the vessel fleet there has grown by 20% since last year’s severe British Columbia flooding.

Russia’s conflict with Ukraine has increased demand for fertilizer and grain, which are two main commodities in CP.

Hemmes declared that the circumstances for railway work stopspage are “far more dire than they have ever been.” I could not imagine a more difficult time.”

The manufacturing sector, still recovering from U.S. border crossing shutdowns by protests, is desperately trying to find alternative ways to move everything from cars to chemicals and machinery for the oil and gas sector before any rail shutdown starts, said Dennis Darby, chief executive of the Canadian Manufacturers & Exporters industry group.

Darby indicated that food processors and manufacturers will be likely to reduce production if CP is shut down next week as they have very little stock.

In 2019, the last significant railway disruption resulted in an eight-day strike by Canadian National Railways (TSX:) Co. According to the Western Canadian Wheat Growers Association, 12 railway stoppages have occurred in 12 years. These were caused by poor weather conditions, labor problems, or blockades.

Wade Sobkowich is the executive director of Western Grain Elevator Association. He said that grain handlers slow down farmer deliveries to storage areas because they fear there won’t be enough trains to transport them.

Sobkowich stated that trucks are best for shorter distances and only for those who need them. He said that there is not much opportunity to use CN Rail as its grain transport has fallen behind over the past months.

When asked if CP employees could run some trains, a spokesperson for the company said that they would not.