10:07 AM EDT, 07/31/2024 (MT Newswires) -- Operations at Canadian Pacific Kansas City Ltd. ( CP ) will likely grind to a halt due to a strike expected in the second half of August, says CEO Keith Creel, as shippers gear up for the threat of massive rail shutdown, The Canadian Press reported overnight Tuesday.

"We're far apart," Creel said Tuesday, referring to the railway and the union representing 3,300 workers, which remain at loggerheads over a new collective agreement. "I'm just being transparent and honest. It's going to be a challenge."

A work stoppage is "most probable" toward the end of the month, Creel told analysts on a conference call.

The report noted this prediction stands in contrast to expectations spelled out by Canadian National Railway Co. ( CNI ), which also faces the prospect of a system-wide stoppage. CN said last week it does not believe the situation will escalate to a full-fledged strike or lockout.

While CPKC has baked the financial hit into its earnings forecast, the potential disruption has already dented operations and may delay some shipments for months afterward, the railway said.

Canadian Pacific and rival CN are awaiting a decision from the country's labour board on whether some shipments would be considered essential services in the event of a strike by the Teamsters Canada Rail Conference, which represents about 9,300 engineers, conductors and yard workers at the two companies.

Though no strike or lockout can take place until at least 72 hours after that decision is made -- a ruling expected by Aug. 9 == the situation has cast a cloud over rail transport in the near term, the report added.

(Market Chatter news is derived from conversations with market professionals globally, and/or from other media sources. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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