Canada's two largest railroads are taking steps to shut down their shipping networks as a labor dispute with the Teamsters union looms, potentially causing disruptions in cross-border trade with the U.S. Both Canadian Pacific Kansas City and Canadian National railroads have ceased accepting certain shipments of hazardous materials and refrigerated products.
If agreements are not reached, both railroads are threatening to lock out Teamsters Canada workers starting Thursday. Canadian Pacific Kansas City will halt all shipments originating in Canada and those heading to Canada from the U.S. Meanwhile, Canadian National has already stopped container imports from U.S. partner railroads.
Analysts predict that any work stoppages may last only a few days, but prolonged disruptions could have significant impacts on the supply chain. The railroads handle approximately 40,000 carloads of freight daily, valued at around $1 billion. Industries such as automotive, chemicals, forestry, and agriculture would be particularly affected, especially with the upcoming harvest season.
Despite the potential shutdown, both railroads' operations in the U.S. and Mexico will continue. Canadian Pacific Kansas City emphasized its commitment to avoiding economic damage and is taking precautions to remove dangerous goods from its network before any stoppage.
Negotiations between the railroads and the union, representing nearly 10,000 workers, are ongoing. The main issues revolve around crew scheduling, rail safety, and worker fatigue. The union has expressed concerns about the well-being of rail workers, citing demanding schedules and lack of paid sick leave.
The rail industry faced a similar situation in the U.S. two years ago, which was averted by congressional intervention. While the trucking industry may absorb some of the railroads' shipping volumes, it cannot fully replace the capacity.
