Wednesday, May 23, 2012

Bulk Shippers Concerned as New Board Face Strike Which Halts All Rail Freight Movement

Shippers Eyes Watching to See How Canadian Pacific Resolves Stoppage
Shipping News Feature

CANADA – USA – Freight services have been suspended on all Canadian Pacific services after talks broke down between management and the Teamsters Union last night. As one of the principal rail carriers of bulk cargo such as coal, agricultural grains and fertilisers the strike will immediately have an impact on shippers in the region to whom it will no doubt be of some concern.

Shareholders of CP must also be concerned following the departure of CEO Fred Green and five other directors following an acrimonious row with Pershing Square Capital Management, the largest individual stockholder and a group known as an activist operation which has previously been instrumental in policy changes in other major companies such as McDonald’s, Wendy’s and J.C.Penney. Just last Thursday the financial management group effectively won a vote of no confidence in the board before the company’s AGM by garnering support for its own nominees prior to the meeting, prompting the six departures.

Cynics will say that the Teamsters are ramping up the pressure on the new board led by interim CEO Stephen Tobias but this has been strenuously denied by Doug Finnson, vice-president of the Teamsters Canada Rail Conference. The Teamsters represents around 5,000 CP workers including engineers, rail traffic control operators and staff on passenger routes and the dispute is being studied by Government officials concerned at the long term effect on Canadian business.

Lisa Raitt, Canadian Minister of Labour summoned Teamsters representatives to discuss the situation yesterday but confirmed she would not interfere directly in the dispute after which talks in Ottawa broke down. The main issues of conflict according to the union are concerns over ‘fatigue management, pension, health spending account, and work rules’. A recent statement from CP’s Executive Vice President and Chief Operations Officer Mike Franczak said:

“CP believes the offer it has presented the union is fair and reasonable. We are willing to enter into binding arbitration or negotiation period extensions should an agreement not be reached at this stage. This would ensure the continued operations of freight and commuter trains on CP’s Canadian Network for the benefit of our customers, communities we serve and the economy at large.”

Both sides in the dispute are meeting again today in an effort to resolve the situation and many in the logistics community in North America will await the results of discussions between the union and a new board looking to define the way they will direct the company with interest.