June 20 (Reuters) - Canadian transportation services
provider Ryder Systems said the trucking market should be
able to handle a jump in freight volume in the event of a rail
strike, though it signaled that the cost of shipping may
increase.
The Canadian industry is on tenterhooks as talks between the
Teamsters union, which represents more than 9,000 workers, and
the country's two largest railroads - Canadian National
and Canadian Pacific Kansas City ( CP ) - drag on over a new
contract.
Labor Minister Seamus O'Regan in May referred the dispute to
the Canadian Industrial Relations Board (CPKC) ensuring that a
possible walkout does not occur until it issues a decision on
the safety impacts of a strike.
In a statement to Reuters on Monday, Ryder said it has the
ability to tap into its dedicated transportation service
offering and contract outsourced capacity within its
transportation management group in case of a volume spike.
"Should a strike ultimately occur, the industry as a whole
should expect that there would be a capacity shift primarily to
truckload," said Kevin Clonch, group director of customer
logistics at Ryder.
Shippers remain cautious about the cost attached to a
possible shift from railroad to truckload, Ryder said, as
intermodal shipments, which are most desired by shippers because
of its cost effectiveness, could be largely impacted in the
event of a strike.
Ryder said it has discussed some alternative strategies with
its customers to still ship intermodal to nearby border
locations where appropriate to mitigate cost impact, and then
ship by truck for the last mile.
"Given concerns about service disruptions ... the
uncertainty could cause some shippers to import freight into
U.S. ports instead of Canadian ports," Stephens analyst Daniel
Imbro said.
Miami-based Ryder provides logistics services throughout the
United States, Mexico, and Canada, managing nearly 260,000
commercial vehicles and operating about 300 warehouses.