‘There is no backup’: Transportation expert on looming rail stoppage

A transportation expert says that an imminent work stoppage at Canada’s two major railways will not only disrupt the countless industries that rely on them but could also jeopardize the reputation of the Canadian supply chain.

“I think the world is getting a little upset with Canada in terms of its reliability in managing its supply chain,” John Gradek, a lecturer and coordinator at McGill University’s aviation management program, told BNN Bloomberg in a Wednesday interview.

“There’s a perceived lack of trust that Canadian infrastructure and transportation can be counted upon to meet obligations that are contracted months if not years ahead of time.”

Operations at Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. are poised to halt as of 12:01 a.m. ET on Thursday unless a last-minute deal is reached between the railways and the Teamsters Canada Rail Conference, the union that represents more than 9,000 workers.

Gradek said negotiations between both sides continue, but the tense labour dispute is “getting down to brass tacks,” with less than 24 hours for an agreement to be reached. He said he hopes that the federal government is prepared to intervene, if necessary.

Gradek added that the looming stoppage shouldn’t come as a surprise to anyone who has been following the negotiations, which have been ongoing for months.

“Organizations should have been preparing or have prepared for this eventuality,” he said.

Gradek said that companies and industries that rely on the export of Canadian commodities and raw materials will be the hardest hit by a stoppage.

“When you talk about moving grain or potash or coal, there’s not much of an option in terms of looking at moving product to export markets other than by train,” he said.

‘Why has this been allowed to happen?’

Gradek said that while there have been numerous work stoppages at CPKC and CN over the past few decades, there’s never been the threat of a complete stoppage by both at the same time.

“There is no backup. There is no alternative rail transportation available for freight in Canada … in history, we’ve never had this,” he said.

"The question is, what happened? Why has this been allowed to happen by the federal government? The railways are federally regulated and federally managed … how did we allow for these contracts to be expiring and for these strikes to be happening at exactly the same time?”

Gradek said that if a prolonged stoppage leads to buyers losing faith in Canada’s transportation system as a whole, suppliers from other countries will “gladly step in and take over the Canadian position.”

“We have got to be very careful in terms of how we manage the perception of our supply chain,” he said.

“We need some rigour, we need some discipline, and we probably need some intervention to basically make sure that the supply chain that we are very proud of in Canada as being the bread basket of the world … (has) transportation systems in place to support that reputation.”