With the end of the Canadian Pacific Railway strike after the Canadian government passed a back-to-work bill on Thursday, there are two major questions shippers should be asking: How long will it take to get operations back-to-normal? And, does the recent strike signal increased union aggressiveness?
Shipments on CP's Canadian network began rolling Friday morning, but the network still must handle a backlog of nine days worth of volume. It takes roughly three to four days for every day the railroad was idled for the intermodal supply chain to return to normal, said Peter Xotta, vice president of planning and operations at Port Metro Vancouver.
Using this rule of thumb, it will take 27 to 36 days for the CP network to catch up with the backlogged intermodal shipments.
In response to the second question, the recent walkout of 4,800 union engineers, conductors and rail traffic controllers doesn’t appear to signal a broader ramp-up of union aggressiveness. Unlike the contract disagreements between the International Longshoremen’s Association and East and Gulf Coast waterfront management, the issue is not one of securing jobs but of protecting pensions. CP, the least profitable major railroad in North America, is attempting to trim pensions that average $73,000 annually, according to the Globe and Mail.
“CP faces a huge challenge related to the solvency of its defined benefit pension plan. We are not alone in having this challenge and like other large defined benefit plan sponsors we have taken direct action to address it,” Mike Franczak, CP's executive vice president and chief operating officer, told the Canadian Senate on Thursday.
CP's attempt to cut pensions was a “flagrant inequality” because the benefits of railroad managers have risen in the meantime, said Rex Beatty, president of the Teamsters Canada Rail Conference.
The pushback against curbing pensions was also central to recent labor unrest at Air Canada and Canada Post. That doesn’t mean there won’t be labor action in the future, but the conservative Canadian government has shown a repeated willingness to flex its muscle to end and block such labor actions.
But just because the Canadian government appears ready to hammer future strikes, the lack of a true compromise between management and the unions could fester. Although back-to-work legislation bring short-term relief, the lack of agreement can spur workers to walk out under the auspice of illness or a wildcat strike, George Smith, who teaches labor relations at Queen’s University, told The Hamilton Spectator.
“You’re mortgaging the future, and not knowing how much that mortgage is going to cost,” he said. “In spite of the appearance of labor peace, there is no such thing.”