CBP Urges Importers and Exporters to Contact Ports Over Diverted Cargo

As uncertainties loom over when the work stoppage at two of Canada's major freight railways will be resolved, CBP officials told the trade community to keep communication lines open with receiving ports so that CBP staff at the port are able to handle any diverted cargo.

“Some of the ports of entry have already seen some upticks in numbers” from cargo that was diverted from Canadian ports to U.S. ports, said Susan Thomas, CBP’s executive director of cargo and conveyance security.

Thomas was on a call hosted by CBP fielding questions about the work stoppage on Canada's freight rail network, which began just after midnight on Aug. 22 when Canadian National (CN) and Canadian Pacific Kansas City (CPKC) locked out members of the Teamsters Canada Rail Conference (TCRC). Both sides have been trying to reach a new labor agreement to replace the old one that expired on Dec. 31, 2023, but the parties have been facing a negotiation impasse (see 2408190049).

“If those numbers are going to grow, and you know that based on your specific supply chain, then it is helpful to give those ports of entry a heads-up,” especially if they don’t run on a 24-hour schedule, so that they can shift personnel accordingly, Thomas said. She also said that CBP headquarters has been in touch with the five field offices at the U.S.-Canada border to ensure that CBP is prepared to clear any cargo.

Communicating with the U.S. ports over cargo originally destined for Canadian ports is also pertinent for ocean carriers that may have bills of lading where the cargo hasn’t been manifested as U.S. cargo. There are diversion regulations, and the U.S. ports need to know ahead of time if diverted cargo is coming their way so they can exercise flexibility, according to CBP staff on the call.

Even though there will be some flexibility for diverted cargo, cargo still must be compliant with U.S. regulations on imports and exports. This means submitting an ISF for imports or submitting an IE for exports if the cargo boards another vessel. It also means complying with the regulations of partner government agencies such as the FDA and USDA.

“If you have those commodities [regulated by PGAs], please feel free to reach out to them directly ... . I do know that they could be impacted, or you could be impacted by their rules as well,” Thomas said.

As of 4 p.m. EDT, it’s unclear when the work stoppage on the Canadian freight rail network will end. Both sides have been seeking to win public favor by criticizing the other side’s obstinance.

“Throughout this process, CN and CPKC have shown themselves willing to compromise rail safety and tear families apart to earn an extra buck. The railroads don’t care about farmers, small businesses, supply chains, or their own employees. Their sole focus is boosting their bottom line, even if it means jeopardizing the entire economy,” TCRC President Paul Boucher said in an Aug. 22 release. TCRC added that it has put forward multiple offers and that the “main obstacles to reaching an agreement remain the companies’ demands, not union proposals” related to rest periods and scheduling.

Said CPKC on Aug. 22: “Throughout nearly a year of negotiations, CPKC has remained committed to doing its part to avoid this work stoppage. CPKC has bargained in good faith, but despite our best efforts, it is clear that a negotiated outcome with the TCRC is not within reach. The TCRC leadership continues to make unrealistic demands that would fundamentally impair the railway’s ability to serve our customers with a reliable and cost-competitive transportation service.”

Both CPKC and CN have called for binding arbitration and for the Canadian government to intervene.

CBP officials said they have already begun to see some shift in trade flows, with vessels that intended to go to Canada now being diverted to U.S. ports, where they may be moved by truck or other modes across the border.

“We've been monitoring [the situation] for quite some time and preparing. We know that various trade stakeholders have also been preparing, especially those that import or export and need to get those critical commodities to either country,” Thomas said.

There also is “a lot of product that is in Mexico [that] needs to transit the U.S. to get to Canada as well. Those that can shift to other modes are preparing to do so or have already begun to do so, especially since we don't know how long this is going to last,” she continued.

In an Aug. 22 update, the National Customs Brokers and Forwarders Association of America (NCBFAA) warned members of heavier truck traffic at the ports while the work stoppage continues.

“NCBFAA urges its members to stay up to date on logistics challenges associated with this rail strike and the impacts on containerized imports and exports along the U.S.-Canadian border. As many trucks as possible will be pressed into service by Canada’s seaports and shippers to keep as much freight as possible moving while the trains are stopped,” the association said.