Secret realities about Canada's most significant rail operators as work blockage starts

Canada is seeing an extraordinary simultaneous blockage at its two primary freight rail operators that might cause billions of dollars worth of financial damage.

The two rail operators, Canadian National Railway and Canadian Pacific Kansas City, are holding different talks with the Teamsters' union, which represents more than 9,000 employees including locomotive engineers, conductors, train and backyard employees and rail traffic controllers. The companies locked out workers on Thursday after stopping working to reach a labor deal.

Here are a couple of crucial facts about the two rail operators:

HISTORICAL BACKGROUND

CN Rail's history dates back to the 1830s, however it was just formally incorporated in 1919. Headquartered in Montreal, the business was government-owned up until it was taken public in 1995. Through its acquisitions of Illinois Central Corp and Wisconsin Central in the late 1990s and early 2000s, CN expanded its rail network throughout the Great Lakes area and down to the Gulf of Mexico.

CPKC's history go back to the 1880s. Previously known as CP Rail, it was developed to connect Canada from coast-to-coast. CP Rail was once involved in numerous companies consisting of mining and hospitality, and it developed and owned iconic Canadian homes such as the Banff Springs Hotel, the Royal York in Toronto, and Château Frontenac in Quebec City.

Calgary-headquartered CP Rail spun-out its other businesses in 2001. It bought Kansas City Southern Railway in 2021, and became CPKC, forming the very first single-line rail connecting the U.S., Mexico and Canada.

RAIL NETWORKS

Although some U.S. rail operators do have small branch lines that enter Canada, CN Rail and CPKC hold a duopoly and are the two dominant freight rail operators in the nation. With coast-to-coast networks, the duo represent the vast bulk of all rail transportation industry revenues in the nation, own more than 75% of all tracks, and represent roughly three-quarters of the general tonnage carried by the rail sector in Canada.

For Canada, the 2 operators serve as crucial supply chain links to trade corridors and ports throughout the continent of North America.

CN Rail, which utilizes around 25,000 individuals, has a network that stretches from Vancouver to Halifax in Canada, and all the method down to New Orleans.

CPKC, which has approximately 20,000 employees, has a network that runs from Vancouver to Montreal. It also connects to the ports of Corpus Christi, New Orleans and Gulfport in the Gulf of Mexico, and further south it links to the ports of Tampico and Lázaro Cárdenas on the east and west coasts of Mexico.

INCOME MIX

In 2023, 25% of CN Rail's freight revenue came from grain, fertilizers and coal; metals, minerals and forest items were 24% of its profits mix; and petroleum products, chemicals, vehicles and intermodal container freights represented the rest.

In 2023, 35% of CPKC's freight profits originated from shipments of coal, grain, potash and fertilizers. Forest items, energy, chemicals, metals and automobiles represented 45% of its profits mix, with the rest originating from intermodal container cargo.

PRIOR WORK BLOCKAGES In 2019, about 3,200 unionized employees of CN Rail, consisting of conductors and yardmen, went on an eight-day strike in Canada. That strike led to heating fuel shortages, big backlogs and a. slowdown in commercial output from plants making items ranging. from chemicals to canola oil. In 2018, a day-long strike ended after the Teamsters and CP Rail. struck a four-year agreement. And in 2015, CP Rail and the. Teamsters agreed to look for mediated arbitration, ending another. short-term strike. In 2012, about 4,800 locomotive engineers, conductors and. yardmen of CP Rail went on over a week-long strike that just. ended after the government introduced back-to-work legislation,. at a time when the economy was still recovering from the global. financial crisis and a recession.

(source: Reuters)