Canada Rail Strike Contingencies

At 12:01am on Aug 22, Canadian National (CN) and Canadian Pacific Kansas City (CPKC) locked out employees represented by the Teamsters Canada Rail Conference (TCRC), and rail operations ceased across Canada.

Later that day, the Canadian Ministry of Labour directed the Canada Industrial Relations Board (CIRB) to assist in negotiations between CN, CPKC railways and the TCRC, by imposing final binding arbitration.

CN has been served with a 72-hour strike as of Aug 23rd notice by the Teamsters Canada Rail Conference (TCRC). The Teamsters intend to strike as of 10:00 AM ET on Monday, August 26, 2024.

Please see latest updates from CN here.

The lockout and picket lines remain in effect at CPKC, meaning that the work stoppage at CPKC is ongoing. CPKC remains prepared to resume service as soon as it is ordered to do so by the CIRB.

Please see latest updates from CPKC here.

Please see below for the latest status updates, noting the situation is very fluid and details are subject to change.

Rail update:

The information below has been communicated directly to Maersk by the Rail Providers. Please note the situation is very fluid at the moment, and this information is subject to change by the hour.

CN

Import units arrived at CN inland rail destinations before the work stoppage are readily available for pickup as usual.

CPKC

• Export cargo will be accepted at inland terminals; however, these units will not move until the rail network is operational again. This allowance may become restricted if space becomes an issue.
• Export units in-gated at CPKC terminals will not be able to be out-gated until further notice from CPKC.
• Import units arrived at CPKC inland rail destinations before the work stoppage are readily available for pickup as usual.

Ocean terminals:

• On the West Coast, vessel operations are underway for the MSC Domna at Vancouver Centerm and the GSL Effie at Prince Rupert Fairview.
• On the East Coast, vessel operations are underway for the Arica Express at Montral Racine Terminal.
• Montreal Racine terminal is not accepting empty containers at this time.

Detention

Export Empty Containers

Detention freetime clock was paused on August 22, unless specific restrictions were in place sooner, and will remain paused where operations have not resumed.

Import Empty Containers

Detention will be applicable where empty return depots remain available.

Storage and Demurrage

Inland rails

• Import Rail Cargo that has arrived at the inland rail destination will be subject to rail storage and container demurrage, as gates will remain open for import cargo pickup.
• Export Rail Cargo gated in at the origin rail ramp that is unable to move due to work stoppage and recovery delay will not be subject to storage, and demurrage at inland rails is not applicable for exports.

Ocean terminals

• Vancouver, Prince Rupert and Fraser-Surrey
  Any charges assessed by the ocean terminal during work stoppage should be settled directly by the cargo owner with the terminal.
• Montreal, Newark & Philadelphia
  Storage for rail cargo will be invoiced by Maersk on behalf of the terminal.

We encourage customers to arrange delivery of all available import cargo to minimize congestion at the ports and rail ramps.

We recognize the fluid nature of the current labour situation and understand the impact on supply chains and especially our customers. We remain committed to closely monitoring the situation and providing updates as they become available.

If you have any specific questions or concerns about your shipments, please do not hesitate to contact your Maersk representative. We are here to assist you and provide guidance during these times.

As we navigate the current situation affecting Canadian rail services, we are actively monitoring the evolving circumstances. Our team is communicating with our rail partners and evaluating contingency strategies as the situation develops.

Please be advised that this remains a dynamic situation, subject to daily fluctuations. We are committed to informing you with timely updates as the situation progresses.

As of today, we can share the following details:

Booking Acceptance: we are still accepting bookings from/to origins and destinations serviced by rail via Canadian ports.

Vessel Updates

West Coast

*ETA is subject to change

**Plan is subject to change

East Coast

*ETA is subject to change

**Plan is subject to change

IMPORT

Cargo already available at inland rail destination: Gates at both CN and CPKC will remain open, and customers are expected to pick up import cargo, as usual. Both Storage and Demurrage will be applicable.

Cargo discharged at ocean terminal prior to work stoppage: Rail cargo that did not depart prior to work stoppage will remain at the discharge port until rail operations resume.

Cargo discharged at ocean terminal during rail work stoppage: This cargo will remain at the discharge port until rail operations resume.

Cargo discharging at US ports in Newark and Philadelphia – In order to maintain supply chain fluidity, Maersk is currently assessing the option to utilize off dock depots in Newark for cargo discharging in Newark or Philadelphia. Dwelling units are being prioritized and impacted customers will be contacted. Related transportation costs and storage fees will be assessed to the cargo owner.

EXPORT

Cargo gated-in at origin rail ramp – will be held until rail operations resume.

Cargo not yet gated-in at origin rail ramp - If containers cannot be gated in at the origin rail ramp, containers will be rolled to future vessels.

Detention, Demurrage and Storage

Detention

Export Empty Containers

• Detention will not be applicable for export containers that cannot be gated in due to work stoppage.

Import Empty Containers

• Detention will be applicable, as empty return depots remain available.

Storage and Demurrage at Inland rails

• Import Rail Cargo that has arrived at the inland rail destination will be subject to rail storage and container demurrage, as gates will remain open for import cargo pickup.
• Export Rail Cargo gated in at the origin rail ramp that is unable to move due to work stoppage will not be subject to storage, and demurrage at inland rails is not applicable for exports.

Storage at Ocean Terminals during work stoppage

• Vancouver, Prince Rupert and Fraser-Surrey will suspend the storage clock until the rail work stoppage is over.
• Montreal – will not suspend storage during the work stoppage.
• Newark, Philadelphia - will not suspend demurrage* during the work stoppage.
  *For U.S. ports, storage and demurrage are combined.

As we receive updates, we will provide further details.

If you have any specific questions or concerns about your shipments, please do not hesitate to contact your Maersk representative. We are here to assist you and provide guidance during these times.

As we earlier informed you, on August 18, 2024, the Teamsters Canada Rail Conference served a strike notice to Canadian Pacific Kansas City, stating its estimated 3,300 union-represented workers employed by the railroad will withdraw services effective 12:01 a.m. ET Thursday, August 22, 2024, unless they receive a new contract. In response, CPKC said it would lock out all union employees beginning Thursday.

Concurrently, the Canadian National Railway informed the union of its intent to lock out the roughly 6,000 represented workers employed by railroad on Thursday unless the parties agreed on a new labor deal or the union agreed to binding arbitration.

We are now writing to give you an update.

We can confirm that we continue to accept bookings to and from Canada, including ocean, rail, truck and air. As the situation remains ongoing and developing, we are in close contact with local officials and authorities as well as partners on the ground and continue the situation. We endeavor to keep you informed of developments that may occur that impact your supply chain with Maersk.

Considering concerns for our customers’ supply chains, Maersk has been reviewing contingency actions. We expect to share more information on this shortly.

For further information regarding the embargo schedule from CN can be found here, as well as here. For your ease, we suggest you bookmark this page, as it will assist in understanding when the embargo impacts your cargo.

If you have any further questions, please contact your local Maersk office or Maersk representative. They are standing by to help.

Thank you for your understanding during this time. We remain committed to supporting you and your business with your supply chain needs.

On 10 May, Canada's Labor Minister Seamus O'Regan referred a potential strike action by members of Teamsters Canada Rail Conference (TCRC) on the CN and CPKC rail companies to the Canada Industrial Relations Board (CIRB). The CIRB has been asked to review whether the railroads must continue to transport certain goods during the strike “to prevent an immediate and serious danger to the safety or health of the public.”

The CIRB has not set a timeline for its decision but has invited affected groups or organizations to file submissions on the matter to aid in its decision making. Under Canada's labor laws, a strike cannot start until the board issues a decision. This move likely delays any strike activity, which could have started as early as 22 May following a 72-hour notification. Meanwhile, both the railroads and union continue to meet with the assistance of the Federal Mediation and Conciliation Services (FMCS).

In light of concerns for our customers’ supply chains, Maersk has been reviewing contingency actions. For example, as referenced in our prior advisory, we continue to explore limited truck options for West/East – East/West intra-Canadian transport in the event of a work stoppage.

On the ocean side, we have re-evaluated inducements to Tacoma, WA, on our TP1 service due to recent developments. Two vessels will induce Tacoma to accommodate U.S. import/export rail cargo, including:

• Maria Y – voyages 419N 422S, arriving in Tacoma 30 May
• Santa Barbara – voyages 420N 423S, arriving in Tacoma 5 June

However, the inducements of the following vessels are now under review. Unless otherwise communicated, these vessels will resume their standard scheduled callings:

• MSC Domna X – voyages 421N 424S
• GSL Effie – voyages 422N 425S

There are no changes to our CAE or MCX scheduled sailings calling East Coast Canada at this time.

All contingency sailings have been updated on our online platforms. Visit Maersk.com for schedule details or contact your account representative for additional information on contingency routing options.

We will share updates as needed or should the situation develop further.

On 1 May, the Teamsters Canada Rail Conference (TCRC), a union representing more than 9,000 employees at Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC) announced that their membership voted in favor of a strike. The parties have begun a mandatory 21-day “cooling off” period but have scheduled additional meetings with the assistance of the Federal Mediation and Conciliation Services (FMCS) in an effort to negotiate a contract. A work stoppage could occur as early as 22 May. A 72-hour notice must be given prior to any work stoppage action.

The contract between the rail lines and the union workers expired on 21 December 2023. If the parties fail to reach a new agreement, rail service across the entirety of Canada will be effectively shut down for both freight and commuter services, which are run by the affected conductors, locomotive engineers, yard workers and rail traffic controllers.

Out of concern for our customers’ supply chains, Maersk has taken the following steps to mitigate the impact of a potential work stoppage:

• Working closely with CN, CPKC and terminal operator DP World to accelerate and optimize operations on the Canadian West Coast ports to reduce congestion, including diverting cargo from Centerm in Vancouver to Prince Rupert
• Inducing Tacoma, WA, on four upcoming sailings on our TP1 Service to care for U.S. import/export rail cargo should a strike take place
  • Maria Y – voyages 419N 422S
  • Santa Barbara – voyages 420N 423S
  • MSC Domna X – voyages 421N 424S
  • GSL Effie – voyages 422N 425S
• Reviewing feasible rail routings and transit times to U.S. destinations via Tacoma
• Reviewing limited truck options for West/East – East/West intra-Canadian transport

The contingency sailings have been updated in our online platforms. Visit Maersk.com for schedule details or contact your account representative for additional information on contingency routing options.

In the event of a work stoppage, customers can anticipate significant backlogs with knock-on effects and an extended recovery period should the disruption last for more than a few days.

We appreciate your trust in Maersk to assist with your supply chain needs. We will share updates as more information becomes available or should the situation develop further.