Amid posting a 19.3 percent year-over-year drop in net earnings, the Class I railway faces a “potentially devastating” work stoppage.
Class I railway Canadian Pacific revealed Wednesday it received a 72-hour strike notice from the Teamsters Canada Rail Conference-Train & Engine (TCRC) and the International Brotherhood of Electrical Workers (IBEW) of their plans to strike at 12:01 a.m. Eastern time Saturday if negotiated settlements are not reached.
The news comes as Canadian railways are continuing to deal with a grain backlog.
The Alberta Barley and the Alberta Wheat Commission on Wednesday sent a letter to Patricia Hajdu, Canada’s minister of employment, workforce development and labour, over concerns of a rail strike.
“With the inability to deliver grain on global contracts that were set for delivery as far back as October, some farmers are facing severe cash-flow issues as we move into the 2018 growing season,” the letter said. “A rail strike could have potentially devastating and lasting effects on our producers, domestic supply chain partners, international buyers and the national economy.”
Canadian Pacific’s net earnings for the first quarter of 2018 encountered headwinds from the rough winter, falling 19.3 percent year-over-year to $348 million Canadian (U.S. $275 million).
Revenues ticked up 3.7 percent year-over-year to C$1.66 billion, while volumes rose 6 percent.
“This was a challenging quarter, as we battled extreme weather and unprecedented demand, specifically in the northern reaches of our network,” CP President and CEO Keith Creel said. “With the extraordinary winter weather behind us, we built a tremendous amount of momentum through March, one of our best months in recent history, positioning us well for the rest of the year.”
CP was the second of the seven Class I railways to issue its first-quarter 2018 results.
CSX reported its Q1 financials Tuesday and said it nearly doubled its net earnings from last year’s first quarter and drastically decreased its operating ratio, despite revenues remaining relatively flat.
Although it’s unclear when BNSF will release its first-quarter results, Kansas City Southern is scheduled to issue its first-quarter results Friday morning, followed by Canadian National on April 23, Norfolk Southern on April 25 and Union Pacific on April 26.
Unions serve Canadian Pacific with strike notice
