Photography by Frederick Manfred Simon © www.steelwheels.photography
Inside This Issue
· Maple Grief: Canadian West Coast Port Workers on Strike
· Jobs Aplenty: More Signs of a Healthy U.S. Job Market
· The High C’s: Cars and Construction Boosting Railroad Fortunes
· Equity Perplexity: Rail Stocks Drop Despite Upbeat Vibes from Job Market
· Slowing Boeing: Rail Bridge Break Impacting Aircraft Supply Chain
· Remembering a Tragedy: The Lac-Mégantic Rail Disaster, 10-Years On
· Looking Back: John Garrett and the Early Days of the B&O Railroad
Track Talk
“A decade ago today, one of the worst rail disasters in Canadian history took place when a freight train carrying crude oil derailed, caught fire, and exploded in the heart of the town of Lac-Mégantic, Quebec. The tragedy took the lives of 47 people, forced hundreds of residents to evacuate, and destroyed much of the community’s downtown core. On this solemn day, we remember the precious lives that were lost and think of the people of Lac-Mégantic who, 10 years later, continue to display strength and bravery as they endure the long-lasting traumatic impacts of this catastrophe.”
-Canadian Prime Minister Justin Trudeau
The Canadian Port Strike
· It’s always something. A strike threat by America’s west coast port workers came to an end. But now Canada’s west coast port workers—most significantly at the ports of Vancouver and Prince Rupert—have walked off the job. On July 1st, the Canadian branch of the International Longshore and Warehouse Union (ILWU) began its strike, seeking a new contract that protects against outsourcing, automation, and inflation. Their prior contract expired at the end of March. “Unfortunately, the ILWU Canada Bargaining Committee has run out of options at the bargaining table because the BCMEA and their member employers have refused to negotiate on the main issues, and we feel we are left with no choice but to take the next step in the process.”
· The BCMEA refers to the British Columbia Maritime Employers Association, which represents 49 organizations including Global Container Terminals Canada, DP World Canada, Neptune Bulk Terminals, and most of the big shipping lines like Maersk and CMA CGM. BCMEA said the union’s “proposals for compensation are unreasonable.” And it insists it needs to hire non-ILWU contractors because the union “has been consistently unable to fulfill the trades work they have jurisdiction over.” On average, it claimed, “of the trades work that the ILWU Canada is exclusively entitled to supply in Vancouver, 17% of jobs went unfilled last year.”
· Canadian National, for one, in a statement on July 7th, called the impact of the strike “enormous and mounting.” The railroad added, “It is crucial that both parties and the federal government do what is necessary to avoid further disruption to Canada’s supply chains.” U.S. west coast port workers, by the way, say they won’t work to unload container ships diverted from Canada to the U.S., in solidarity with their Canadian counterparts.
· In the meantime, labor strikes at Wabtec, a locomotive maker, and Canada’s National Steel Car, a railcar maker, continue. At the same time, UPS—a major railroad customer—could be headed for a strike. In addition, east and Gulf Coast port workers in the U.S. are struggling to reach a new contract agreement. Their current contract expires in September.
The Economy
· Once a month, the U.S. Labor Department’s Bureau of Labor Statistics (BLS) publishes an update on job growth in the economy. And it just might be the most closely-watched economic report of any. On Friday, the report came out for June, showing once again that the U.S. job market is healthy and strong. The economy created another 209,000 jobs, following the addition of 306,000 in May and 217,000 in April. The May and April figures were revised down from earlier estimates, suggesting June’s figure might get a downward revision next month as well. But that doesn’t negate the central theme, that the economy continues to expand employment. In the past year, the total working-age population of the U.S. has grown by about 3m people (to roughly 267m), and the total number of people employed has also grown by about 3m people (to 161m). About 100m of those 267m are students, retirees, or otherwise not in the workforce. And this number has been flat y/y. The percentage of people looking for a job but unable to find one (the unemployment rate) is exactly where it was a year ago: a lowly 3.6%. One final fact about the workforce: Of those 3m additional people working across the U.S., 41% are immigrants, up from 38% this time last year.
· What sectors are creating the most new jobs? Health care and social work led the way, accounting for 31% of June’s total growth. Another 11% came from construction, with gains even from residential construction. Finance, professional services, leisure,
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