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Sunnyvale California USA
A Canadian Rail Strike Could Spur an Inventory Glut for Apparel Brands
8 July 2024

Canada - A flurry of logistics labour battles across Canada has put shippers in the country through the ringer.
 
One scuffle at the ports looks like it is set to be resolved without any disruptions in work action, though a possible rail strike is already having some implications on apparel companies.
 
As rail workers at Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) await the results of a federal review to determine whether they can officially go on strike, more than 700 union foremen at the country's West Coast ports have been given a no-go to engage in a work stoppage of their own.
 
A similar number of rail workers represented by Canada's version of the Teamsters voted for a second time to reauthorize a strike at the end of June, but that stoppage would be unlikely to take place until mid-July or later.
 
All eyes in the country are on the CIRB, which is currently reviewing whether a strike would impede the country's railroads from transporting certain essential goods.
 
Mike Chisholm, CEO and president of Canada-based logistics and transportation services provider A&A Customs Brokers, said that ports like Vancouver, Halifax, and Montreal will likely be the biggest chokepoints of any potential rail strike.
 
"That's where the rail tends to go in and out on the container side of things, so there's going to be a big logjam there. Then you'll end up with ships sitting at the port for as long as this thing goes on, and then even longer, because there's the residual effect after things get back to normal," Chisholm said.
 
In the event of a strike, Chisholm expects the impacts to stretch to intermodal transportation via both rail and truck, with rail yards getting backed up with both imports and exports, particularly since it's cheaper to ship by rail than by truck.
 
"You're also going to see a big backlog in the trucking industry, because of course, if you can't ship it by rail, the only other option is by truck. There's just not enough capacity to handle existing volumes today. Throw all that rail volume in there and customers aren't going to get their goods because somebody else is going to get priority. It's just a real domino effect," Chisholm said.
 
Glenn Taylor.

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